Swiss etc.

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Bourquin, Ehmann, Woznicki Global States Leo Fabrizio Bunkers

Peter Spillmann A Nation to Keep Up With Gabi Vogt The Longest Ride…

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Roland Müller The Sandwich-Girl

Laura Horelli Current Female Presidents (3/2001)

15 Michael Hardt Altered States

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Swiss etc.

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- The fourth publication of the - etc series.

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Arthur Kroeber Creatures of the Centre

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Joël Tettamanti Qaqortoq

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Alexander Missal Paradise Frozen

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Clarissa Tossin Birth of a Nation Carlos Iglesias The Merging Frontier

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www.etc-publications.com Issues that matter

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Fulguro Referee

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Swiss [swis] 1. Condition of a global player with exceptional status. 2. Attribute of a state suspended between sovereignty and interconnectedness. 3. Term for a territorial model that is applied to e.g. Special Economic Zones.

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Maria Tackmann Talstraße

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75B Holiday

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Anton Moos Shadows of Poverty

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Angelus Eisinger The Swiss State of Spatial Affairs

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Immanuel Wallerstein States in an Age of Transition Lordy Rodriguez States Andrew Ross A Fundamental Compact between the State and Foreign Capital Michael Hermann Heiri Leuthold Political Landscape

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Fulguro Territories

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Global States An Introduction to “Swiss etc.”

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Notes

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Notes

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- ---------------------------------------------------------------------------------------------------- - 1.

The term global cities has been coined in the sociological context in order -

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to describe urban structures with fluid physical borders. See: Saskia Sas- -

-

sen’s “The Global City” (Princeton University Press, 2001).

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A Nation to Keep Up With

“Swiss etc.” looks at Switzerland as a model state that is designated by both sovereignty as well as interconnectedness. Nicolas Bourquin, Sven Ehmann and Krystian Woznicki trace this dual pattern across the -globe.

-

The label “Switzerland” is continuously being stylised as a fetish object, - from the stickers which mark all kind of products with “Swiss made” to pitching labels such as Swissôtel, which use the flag as an icon. Peter - Spillmann reconstructs the “making of”. -

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- 2.

In this context J.G. Ballard created with the fictitious business park “Eden -

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Olympia” an apt metaphor. In his novel “Super Cannes” (New York: St. Mar- -

-

-

-

tin’s, 2001), he describes it as a neo-mythical birthplace of the world, de- -

-

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-

-

-

picting it as a micro state designed with clinical precision. Geometrical -

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parks, artificial lakes and sports complexes are arranged within the confi- -

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Global capital does not simply eradicate state borders. After all, global capital depends upon states – their existence and well-being. Rather, global capital challenges the validity and the legitimacy of states. Hence, the current period of transition entails a renegotiation of the state unit. This process is mirrored last but not least in the foundation of micro states such as Special Economic Zones and satellite states such as Iraq, that foreign policy makers had conceived as the successful example for a fundamental revision of the Arabic region. In short, globalization, commonly associated with borderlessness, eventually requires borders, or well-defined territories that serve as testing grounds for the putatively biggest revolution of our times. Against this theoretical backdrop, “Swiss etc.” scrutinizes what perhaps could be called global states. Like global cities 1, global states are nodes in the flow of global capital: junctures, checkpoints, gateways. Unlike global cities, global states are incubation spaces, within which future societies are being modelled. The city-state Singapore best illustrates the difference. What appears, due to its spatial form and interconnectedness, to be a global city is, because of its organizational form, in fact a global state. Singapore pursues a so-called “effective democracy”, that is, a type of social control that can only be legitimised by the state. It is a type of social control finally that claims to foster global virtues, thereby producing the next generation of truly global citizens. By using Switzerland as an example, “Swiss etc.” explores this tale about social engineering and globality 2. Against the backdrop of its isolation, the Swiss state breeds highly adaptable citizens inside a bubble of pure will. Simultaneously, Switzerland cultivates interconnectedness – being listed among the Top 5 on the Globalization Index 3, the Swiss state presents itself as high-

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nes of a corporate environment – a myriad of grey office towers, which host -

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the world’s biggest conglomerates, while the flats and houses function as -

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“service stations”, where the selected elite sleep and ablute.

-

ly permeable in terms of personal, technological and economic connections to the outside world. Although almost all relevant global players in the country are Swiss – using even the nation’s flag as their corporate icon – their origin is subordinate to the fact that Switzerland is a projection surface and a model state for globalization. Switzerland as an artificial stage set and as an exemplary state, setting standards world wide.

Aiguilles de Baulmes, VD, 2001

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“The 2004 Globalization Index Data and Methodology” reads as follows: -

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“The A.T. Kearney/Foreign Policy Magazine Globalization Index incorpora- -

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tes 16 key indicators of global integration. The index quantifies economic -

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-

-

integration by combining data on trade, foreign direct investment (FDI) and -

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-

-

portfolio capital flows, and income payments and receipts, which include -

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-

-

compensation and non-resident employees and income earned and paid -

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-

-

on assets held abroad. It charts personal contact via levels of international -

-

-

-

travel and tourism, international telephone traffic, and cross-border trans- -

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-

-

fers, including remittances. The index also gauges technological connec- -

Photos______________________________________________________________ -

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tions by counting the number of Internet users and the Internet hosts and -

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secure servers through which they communicate. And it also assesses po- -

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litical engagement by taking stock of the number of international organi- -

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zations and U.N. Security Council missions in which each country partici- -

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pates, as well as the number of foreign embassies that each country hosts. -

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The most recent data available for the full sample of 62 countries was col- -

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lected from international organizations that include the World Bank, Inter- -

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national Monetary Fund, and International Telecommunications Union.” -

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Leo Fabrizio (1976) lives in Bottens and for the last four years has been working on “Bunkers”, a documentation of Swiss bunkers. He describes his general approach with the following words: “Switzerland is predominant in my study. Not only is it my homeland, but each element of these photographies has a relation with Switzerland. The landscape and particularly the mountain landscape is an extremely effective symbol in this country and is totally inherent to our identity. As for the bunkers, they represent a finely developed military system in Switzerland. The links one can elaborate between these two symbols are multiple and may raise interesting questions. I looked for the most spectacular bunkers, notably by their camouflage devices: true theatre scenery made with the utmost care. A quality indeed fully Swiss.” Since his graduation from the Ecole Cantonale d’Art de Lausanne (Ecal) Fabrizio’s work has been exhibited and published widely. Most recently he has been awarded at the Swiss Federal Contest of Design 2003. www.leofabrizio.com

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Grange-Neuve, VD, 1999

Gütsch, UR, 2002

The white cross on the red background is highly popular. The concept of “Swissness” does not evocate the fanatic patriotism of the Blocher-voter, who during the last vote once again made his presence felt. Rather a whole range of trends have amalgamated behind the symbol of the Swiss cross; the concepts ‘Switzerland’ or ‘Swiss’, the suggestive red-white contrast, reduced forms and essential, selected materials in graphics and design. The continuing hype of symbols and products, which together are associated and perceived as being ‘Swiss’, is not a coincidental, purely design-oriented fad. They would not function without the still real and existing state of ‘Switzerland’, somewhere in Europe. Farmer, soldiers and mountains - Switzerland does not exist! Although the Swiss cross appeared two years ago on t-shirts, caps and belts, Switzerland as a label is not an invention of the fashion scene. At the end of the 1990s and in shock over a highly politicised climate due to the world-wide media scandal of doing business with National socialist Germany, as well as the profits from secret bank accounts and insurance policies of Jewish clients of Swiss banks and insurance companies, the policy concerning information was reformed.

The new, state-financed organization is called ‘Presence Switzerland’. It has the mission to conjure into existence worldwide the coordinated integral and public presence of Switzerland. “Presence Switzerland conveys throughout the world accurate information about Switzerland, creates through the set-up of national and international networks understanding and interest for our country and supports through goal-directed activities the perception of Swiss diversity and attractiveness.” In order to reach the aimed-at goals of the Presence Switzerland’s mission statement are, among other projects in the planning, the “creation and upkeep of effective networks with current and future leaders of opinions” and the development of a “brainstormingcentre for the image of Switzerland outside of Switzerland”. Since then Presence Switzerland has been coordinating appearances at world exhibitions and is responsible for “the deliberate utilization of large events, such as the Olympic Games and World Championships”. Presence Switzerland’s declared public are “current and future leaders of opinions from the areas of politics, economy, media, culture and science - professors as well as youth and students.” The creators of culture have always played a key role in the transference of knowledge about and sympathy for Switzerland. This was already exemplarily shown in 1992 on the occasion of the World-Fair in Seville. The Swiss refrained

from the traditional show of strength and set up a staged art exhibition conceived by Harald Szeemann. The radically cultural concept set off itself vehement debates - above all in Switzerland. In many offensive attacks, conservative and right wing members of parliament tried to prevent the opening of the pavilion. The picture of Switzerland that was being shown was in their opinion elitist, insultingly one-sided and could not be understood by the public. The most discussed artwork was a painting by Ben Vautier. It showed in black writing on a white ground the handwritten sentence “la Suisse n’existe pas” - Switzerland does not exist. The work played upon the historically conceptualised concept of Switzerland, the “will-power nation” as well as a whole chain of literary statements, which had in the past repeatedly described Switzerland as an “exception” and as an “artificial” nation among the great cultures of Europe. With “la Suisse n’existe pas” Vautier brought the 150 year-old overweening doubt concerning Switzerland’s very right of existence ironically to a head and at the same time revived the long obsolete concept of state as a nation and as a homogenous place with a predominate culture. “La Suisse n’existe pas”, however, could have been interpreted in 1992 in another way, coming as it did shortly after the rejection of the admission into the EEA (European Economic Area) 1. “Switzerland does not exist” can be read as the statement

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On January 1st 1994 the agreement over the EWR (EEA), which Switzer- -

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land did not join, came into effect. On May 2nd 1992 it had been ratified -

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by the 12 member states of the European Community, today the European -

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Union, and the 7 members of the European Association of Free Trade. In -

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the vote over the plebiscite of December 6th 1992 the Swiss people rejec- -

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ted the ratification.

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- Photo______________________________________________________________ -

- Gabi Vogt (1976) - lives and works in Zurich. She received her photography diploma in 2003 at the HGKZ. Her work has appeared in several publications including NZZ Folio and was shown in ex- hibitions in Switzerland, the Netherlands and Germany. The photographs published here - are taken from the series “The Longest Ride I Ever Took Was from Fislisbach to Frick and - Back Again on the Same Evening” (2003), which she produced in various Swiss villages. www.gabivogt.net ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------

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Global States An Introduction to “Swiss etc.”

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Notes

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Notes

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- ---------------------------------------------------------------------------------------------------- - 1.

The term global cities has been coined in the sociological context in order -

-

to describe urban structures with fluid physical borders. See: Saskia Sas- -

-

sen’s “The Global City” (Princeton University Press, 2001).

-

A Nation to Keep Up With

“Swiss etc.” looks at Switzerland as a model state that is designated by both sovereignty as well as interconnectedness. Nicolas Bourquin, Sven Ehmann and Krystian Woznicki trace this dual pattern across the -globe.

-

The label “Switzerland” is continuously being stylised as a fetish object, - from the stickers which mark all kind of products with “Swiss made” to pitching labels such as Swissôtel, which use the flag as an icon. Peter - Spillmann reconstructs the “making of”. -

-

-

-

-

-

-

-

-

-

-

-

- 2.

In this context J.G. Ballard created with the fictitious business park “Eden -

-

Olympia” an apt metaphor. In his novel “Super Cannes” (New York: St. Mar- -

-

-

-

tin’s, 2001), he describes it as a neo-mythical birthplace of the world, de- -

-

-

-

-

-

picting it as a micro state designed with clinical precision. Geometrical -

-

-

-

-

-

parks, artificial lakes and sports complexes are arranged within the confi- -

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Global capital does not simply eradicate state borders. After all, global capital depends upon states – their existence and well-being. Rather, global capital challenges the validity and the legitimacy of states. Hence, the current period of transition entails a renegotiation of the state unit. This process is mirrored last but not least in the foundation of micro states such as Special Economic Zones and satellite states such as Iraq, that foreign policy makers had conceived as the successful example for a fundamental revision of the Arabic region. In short, globalization, commonly associated with borderlessness, eventually requires borders, or well-defined territories that serve as testing grounds for the putatively biggest revolution of our times. Against this theoretical backdrop, “Swiss etc.” scrutinizes what perhaps could be called global states. Like global cities 1, global states are nodes in the flow of global capital: junctures, checkpoints, gateways. Unlike global cities, global states are incubation spaces, within which future societies are being modelled. The city-state Singapore best illustrates the difference. What appears, due to its spatial form and interconnectedness, to be a global city is, because of its organizational form, in fact a global state. Singapore pursues a so-called “effective democracy”, that is, a type of social control that can only be legitimised by the state. It is a type of social control finally that claims to foster global virtues, thereby producing the next generation of truly global citizens. By using Switzerland as an example, “Swiss etc.” explores this tale about social engineering and globality 2. Against the backdrop of its isolation, the Swiss state breeds highly adaptable citizens inside a bubble of pure will. Simultaneously, Switzerland cultivates interconnectedness – being listed among the Top 5 on the Globalization Index 3, the Swiss state presents itself as high-

-

-

nes of a corporate environment – a myriad of grey office towers, which host -

-

the world’s biggest conglomerates, while the flats and houses function as -

-

“service stations”, where the selected elite sleep and ablute.

-

ly permeable in terms of personal, technological and economic connections to the outside world. Although almost all relevant global players in the country are Swiss – using even the nation’s flag as their corporate icon – their origin is subordinate to the fact that Switzerland is a projection surface and a model state for globalization. Switzerland as an artificial stage set and as an exemplary state, setting standards world wide.

Aiguilles de Baulmes, VD, 2001

-

-

-

-

-

- 3.

“The 2004 Globalization Index Data and Methodology” reads as follows: -

-

-

-

“The A.T. Kearney/Foreign Policy Magazine Globalization Index incorpora- -

-

-

-

tes 16 key indicators of global integration. The index quantifies economic -

-

-

-

integration by combining data on trade, foreign direct investment (FDI) and -

-

-

-

portfolio capital flows, and income payments and receipts, which include -

-

-

-

compensation and non-resident employees and income earned and paid -

-

-

-

on assets held abroad. It charts personal contact via levels of international -

-

-

-

travel and tourism, international telephone traffic, and cross-border trans- -

-

-

-

fers, including remittances. The index also gauges technological connec- -

Photos______________________________________________________________ -

-

-

tions by counting the number of Internet users and the Internet hosts and -

-

-

-

secure servers through which they communicate. And it also assesses po- -

-

-

-

litical engagement by taking stock of the number of international organi- -

-

-

-

zations and U.N. Security Council missions in which each country partici- -

-

-

-

pates, as well as the number of foreign embassies that each country hosts. -

-

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-

The most recent data available for the full sample of 62 countries was col- -

-

-

-

lected from international organizations that include the World Bank, Inter- -

-

-

-

national Monetary Fund, and International Telecommunications Union.” -

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Leo Fabrizio (1976) lives in Bottens and for the last four years has been working on “Bunkers”, a documentation of Swiss bunkers. He describes his general approach with the following words: “Switzerland is predominant in my study. Not only is it my homeland, but each element of these photographies has a relation with Switzerland. The landscape and particularly the mountain landscape is an extremely effective symbol in this country and is totally inherent to our identity. As for the bunkers, they represent a finely developed military system in Switzerland. The links one can elaborate between these two symbols are multiple and may raise interesting questions. I looked for the most spectacular bunkers, notably by their camouflage devices: true theatre scenery made with the utmost care. A quality indeed fully Swiss.” Since his graduation from the Ecole Cantonale d’Art de Lausanne (Ecal) Fabrizio’s work has been exhibited and published widely. Most recently he has been awarded at the Swiss Federal Contest of Design 2003. www.leofabrizio.com

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- ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -

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Grange-Neuve, VD, 1999

Gütsch, UR, 2002

The white cross on the red background is highly popular. The concept of “Swissness” does not evocate the fanatic patriotism of the Blocher-voter, who during the last vote once again made his presence felt. Rather a whole range of trends have amalgamated behind the symbol of the Swiss cross; the concepts ‘Switzerland’ or ‘Swiss’, the suggestive red-white contrast, reduced forms and essential, selected materials in graphics and design. The continuing hype of symbols and products, which together are associated and perceived as being ‘Swiss’, is not a coincidental, purely design-oriented fad. They would not function without the still real and existing state of ‘Switzerland’, somewhere in Europe. Farmer, soldiers and mountains - Switzerland does not exist! Although the Swiss cross appeared two years ago on t-shirts, caps and belts, Switzerland as a label is not an invention of the fashion scene. At the end of the 1990s and in shock over a highly politicised climate due to the world-wide media scandal of doing business with National socialist Germany, as well as the profits from secret bank accounts and insurance policies of Jewish clients of Swiss banks and insurance companies, the policy concerning information was reformed.

The new, state-financed organization is called ‘Presence Switzerland’. It has the mission to conjure into existence worldwide the coordinated integral and public presence of Switzerland. “Presence Switzerland conveys throughout the world accurate information about Switzerland, creates through the set-up of national and international networks understanding and interest for our country and supports through goal-directed activities the perception of Swiss diversity and attractiveness.” In order to reach the aimed-at goals of the Presence Switzerland’s mission statement are, among other projects in the planning, the “creation and upkeep of effective networks with current and future leaders of opinions” and the development of a “brainstormingcentre for the image of Switzerland outside of Switzerland”. Since then Presence Switzerland has been coordinating appearances at world exhibitions and is responsible for “the deliberate utilization of large events, such as the Olympic Games and World Championships”. Presence Switzerland’s declared public are “current and future leaders of opinions from the areas of politics, economy, media, culture and science - professors as well as youth and students.” The creators of culture have always played a key role in the transference of knowledge about and sympathy for Switzerland. This was already exemplarily shown in 1992 on the occasion of the World-Fair in Seville. The Swiss refrained

from the traditional show of strength and set up a staged art exhibition conceived by Harald Szeemann. The radically cultural concept set off itself vehement debates - above all in Switzerland. In many offensive attacks, conservative and right wing members of parliament tried to prevent the opening of the pavilion. The picture of Switzerland that was being shown was in their opinion elitist, insultingly one-sided and could not be understood by the public. The most discussed artwork was a painting by Ben Vautier. It showed in black writing on a white ground the handwritten sentence “la Suisse n’existe pas” - Switzerland does not exist. The work played upon the historically conceptualised concept of Switzerland, the “will-power nation” as well as a whole chain of literary statements, which had in the past repeatedly described Switzerland as an “exception” and as an “artificial” nation among the great cultures of Europe. With “la Suisse n’existe pas” Vautier brought the 150 year-old overweening doubt concerning Switzerland’s very right of existence ironically to a head and at the same time revived the long obsolete concept of state as a nation and as a homogenous place with a predominate culture. “La Suisse n’existe pas”, however, could have been interpreted in 1992 in another way, coming as it did shortly after the rejection of the admission into the EEA (European Economic Area) 1. “Switzerland does not exist” can be read as the statement

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- Gabi Vogt (1976) - lives and works in Zurich. She received her photography diploma in 2003 at the HGKZ. Her work has appeared in several publications including NZZ Folio and was shown in ex- hibitions in Switzerland, the Netherlands and Germany. The photographs published here - are taken from the series “The Longest Ride I Ever Took Was from Fislisbach to Frick and - Back Again on the Same Evening” (2003), which she produced in various Swiss villages. www.gabivogt.net ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------

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of the at the time deeply disappointed intellectual and cultural scene, who had hoped that with the integration of Switzerland into Europe the isolation of the native culture could be surmounted. But Switzerland doesn’t even appear. Actually, at the founding of the Swiss nation in 1848, the question came up as to how a land with four languages and not under the influence by the - at the time - dominant ideological concepts of a unified cultural identity, could even be legitimate. A national culture, which delivered pictures and myths, around which the Swiss uniqueness could be consolidated, had to be quickly created. The mountains, the farmers and the army belonged to the central motifs of this new, national culture. The mountains were validated as the symbol of the unshakable durability of the just founded confederation, whose existence was still threatened by inner conflicts. The farmer was seen as the prototype of the free, democratic citizen. The soldier embodied the unbroken will to maintain the newly won freedom and neutrality. During the search for national monuments several competitions took place, for instance for the Federal Building in Bern. Artists such as Ferdinand Hodler were commissioned to immortalize the essential idea of Switzerland in large murals in the interior of the parliament. A for its time breath-taking panorama of the world of the mountains of the Vierwaldstättersee (lake of the four forest cantons) - a view from a timeless elevation - was created. It was the untouched landscape as allegory, without a trace of people or their culture. The political myth of the Alps reached finally after World War II its zenith with the “Réduit Mythos”. 2 The idea that one could in the event of a crisis retrench back into the mountains and take shelter influenced an entire generation, and has basically influenced politics until today.

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Reduction and restrain – the brand ‘Cool Helvetia’

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“La Suisse n’existe pas” was in hindsight the starting signal for the launch of a ‘New Switzerland’. Even without the political integration into the EU, in the course of the 1990s, a radical process of assimilation followed. The restructuring took place beyond a European social perspective on a purely structural level, and was levelled at the optimisation of economic benefits. In federally organized Switzerland, where each canton and local municipality can determine how many taxes they want to collect, neoliberal paradigms can simply prevail. The tradition of direct democracy politics is participatory and every single measure is staged. It is not something that is abstract or sent from ‘above’. Most of the governing bodies are occupied by professional citizens, who out of completely pragmatic reasons set about dealing with problems in the same way that they would deal with them at home or in their businesses. Thus, the call in the 1990s for privatisation, self-optimisation and self-initiative seemed completely ‘natural’. Since then, this voluntarily and seemingly autonomous fulfilment of liberal rules and norms has brought Switzerland in the “global competition of nations” many leading positions, from the “ability to globally compete” to “the best place to start a business” to “the most expensive place in the

world”. The entrepreneurally conceived nation cannot presume, however, that its citizens voluntarily decide in its favour. Liberal motifs increasingly come into conflict with the fact that we are all being forced into a certain citizenship. The immanent forced regime is successfully being masked by formal gestures such as the introduction of ‘customer oriented’ public services and an advanced politics of image. The entrepreneurally interpreted nation has therefore, in opposition to authoritarian or bureaucratic nations, also a changed need for representation. Within the state the citizens must continually be motivated and activated as being engaged and participatory. Outside of the state, what counts is winning as much sympathy and credibility with potential customers and investors as possible. In both cases the old national ideas and systems of values prove to be completely inappropriate. At best they deliver a few motifs, which could play a roll in the creation of new labels for the state. The brand Switzerland had its first big appearance at the Expo 2000 in Hanover. The building, which was designed by Peter Zumthor, was an approximately 50 x 60 meter large structure of piled-up wood, which created a labyrinth of corridors and courtyards. 3000 cubic meters of freshly cut Scots pine and larch wood was directly imported from the Swiss mountains. Musicians moved through the passages and spaces with the assignment of transforming the pavilion with all sorts of noises and tones and now and then improvised serenades into a noise sculpture, which would capture the interest of the public. At two different bars selected culinary specialties were offered. The instrumentalization of culture as a means of image building was refined. The Swiss Pavilion should bear witness to an exclusive taste and still be natural and sensual; it should come off as modern and yet anchored in tradition; it should radiate simplicity and modesty (although the investment in the structure came to 18 million Swiss Francs). The new brand Switzerland is no longer being communicated with the same old tourist photos of mountains and folklore. The mountains have been sublimated into the aroma of larch wood. Cheese is presented as a gourmet specialty and folklore as an experimental reference of tones. The message being: Switzerland is the appreciation of reduction and restrain and of a heightened consciousness for the higher values. If a ‘New Switzerland’ was reachable... The most elaborate appearance of the brand Switzerland until now took place in 2002 within the framework of the Expo.02. The somewhat anachronistic large event of a national exhibition is carried out by Switzerland every 30 or 40 years. Through the large intervals of time each regional exhibition retrospectively receives a specific meaning and so becomes in every epoch the central event of reflection, and at the same time, of the renewal of an ever-changing national consciousness. Practically all of the trends and themes of the 1990s were called upon in the altogether 59 large and small exhibition projects of the Expo.02. The large arrangement of the “Arteplage” for instance Jean Nouvel’s cube in the Murtensee and Dillier + Scofidio’s cloud - created a kind of metanarrative. The federal

government itself participated with four of its own projects. The “new understanding of the state” is evident in the selection of themes. Instead of historical monuments and national arguments, the exhibition “Palace of Equilibrium” (“Palais d’équilibre”) reflect over the “endurance of the nation’s own political and economic transactions”. “The Dock” (“Die Werft”) conveyed the central monopoly for security for the neoliberal state. Architecture reminiscent of a shipbuilding yard with cranes, which could be moved towards one another, symbolized “the construction site of national security”. In a kind of kinetic sculpture, gripping pictures of “global risk-factors” as well as symbolic tools to control the risks, created around the visitors steadily changing constellations of meaning. It was the politics of security as children’s playing-blocks. Rather more unintentionally staged was the central problem which politics, reduced to risk management, raises: the reduction of complex societal connections and effects to dangerous clichés. To the pictures for current threats belonged, for instance, globes with statistical facts concerning the streams of migration and the x-ray of a freight with the schematic human shapes of “illegals”. Finally, in the exhibition “New DestiNation” (“Nouvelle DestiNation”) was staged the “customer friendly” state. The pavilion, an inflatable white tent, had the shape of a lung and pulsed almost undetectably in minute-time. The interior had the look of a sports arena with gymnastics equipment, basketball-hoops and the special floor covering of indoor sports halls. Equipped with radio earphones a “personally experienced sportive course” guided one through different inductive zones of hearing and the new public services of the modern state to the goal of a self-optimised citizenship. During the Expo.02 much was surmised about whether this was the definitive coming-out of a self-confident and self-reflective Switzerland. Many journalists were openly astonished that visitors thankfully took on the “challenging” offering of interactive experiences and enthusiastically participated in the experiences. For a moment it seemed as if a ‘New Switzerland’ was reachable: culturally significant, creative, tolerant and open. Today, not even those who in the 1990s were active in the culture and club scene in Zurich, who gave the city a high profile and contributed not insufficiently to the Swissness-hype, are convinced of this. The fact is that since the Expo.02 the asylum law has newly been tightened up, the legalisation of marijuana did not go through and Blocher was elected into the Federal Council. The functional liberalization of society, which has been forcefully pushed forth in the last 10 years in Switzerland - including the reorganization of governing and administrative bodies - is not imperatively dependent on liberal values. Until now, it seemed more opportune to frame the ongoing changes in progressive and culturalised images and to communicate these changes as a new openness. The “new relationship between the citizens and the state”, for instance the retreat of the state from social and societal responsibilities, can obviously be effectively legitimated with conservative values and heightened severity. A more exact observation of the exhibition “New DestiNation” would have made clear that in the high-tech sports-ambient of the pavilion it was not so much the game which was in the

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For the World Economic Forum (WEF), Davos offers quite a glamorous stage to global players. Everything ‘important’ however happens behind the scenes, in the hotel suites, the bars and the gourmet delis. Roland Müller observes the hustle and bustle from the window of his hotel apartment and notices one protagonist, - who tries to intrude into this obscure network: a young women, who confronts the powerbrokers of global- - ization, behind the backdrop of the big stage.

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foreground but rather personal fitness as preparation for a more difficult altercation - a game, where the state merely concerns itself with the enforcement of the rules. And so, the new label Switzerland seems at once rejecting, aloof and anonymous. In order to reach the intended audience, i.e. the financial and business elite of the world, it does not need, after the successful introduction of the new corporate identity, the culture-scene anymore. A short time ago, for the Swiss contribution to the world exhibition of 2005 in Japan, Presence Switzerland introduced a concept with the title “The Mountain”: “The alpine world of the mountains will be central and evocative for the overall theme of ‘The Wisdom of Nature’. The visitors will be positively engaged through the modelling of the facade as an artificial rock formation”. In addition to the exhibition concept, the accompanying cultural program of Pro Helvetia (69 KB) and the information about the planned investment seminar (204 KB) can be downloaded on the homepage of Presence Switzerland. Peter Spillmann (1961) works as artist and exhibition organizer in Zurich and Berlin. Changing projects and integrative connections with such themes as the economy, self-organized cultural customs, urbanism and the cultural construction of landscapes, for example “never look back” (2001), “Be Creative! Der kreative Imperativ” (2003). Cofounder of several self-organized projects (for example “Labor k3000”). Between 2000-2002 he was the artistic director of the exhibition “Route Agricole / Expoagricole” in the context of the Expo.02.

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It had snowed all day and still kept snowing when the Sandwich-girl appeared on the Talstraße. The snow didn’t fall so thickly that the military helicopters above had problems in steering into their destinations in Davos. But the snow was wet and heavy and all of a sudden a load of it came down from the roof and hit a pedestrian, who happened to look up, right in the face. It was around 8.15 p.m, exactly the time when the big shots among the participants of the World Economic Forum, after having relaxed a bit in their luxurious hotel suites, have their chauffeurs drive them to dinner with friends. The Sandwich-girl was cold in her sneakers, a jeans-jacket over an Espritsweatshirt and with soaked hair, which was held by a clip with light-emitting diodes left and right that sent out permanently red signals. But this was not the real message of the Sandwich-girl. “If a sparrow cannot fall from heaven without God knowing it, how can an empire raise without its help?” Benjamin Franklin once asked, a bit dramatically. A good question though, and one which WEF-head Klaus Schwab has read as well: on the back of the last Christmas card by the US Vice president. How was this meant? Schwab questioned Dick Cheney after his ‘special address’ to the WEF participants on January 24th. His wife looked up the quote, he responded, then pondered shortly and added: “It shouldn’t be taken as an indication that the United States sees itself as an empire.” The Talstraße runs parallel to a boulevard a few hundred metres above – the elegant, glittery strip of Davos. Both are one-way roads. On the promenade the traffic from Davos-village at the convention centre comes towards Davos-square. On the Talstraße traffic comes in the opposite direction. Yet, sometimes traffic rules are suspended due to exceptional conditions. That is when the WEF takes place and the convention centre cuts itself off. There is no getting through then, it is just for the WEF people. Police and heavily armed military constantly seek out protestors. But tonight there are none on the streets. The only protestor is the Sandwich-girl down at the Talstraße.

Representatives of Halliburton had already shown up in Baghdad on April 20th, eleven days before the war on Iraq was officially declared to be over. They see themselves as ‘forces multipliers’. “Every time, when soldiers thank you for a clean uniform or a warm meal, it is like a little success-story”, explains the web page of the all-round enterprise. “To make our troups in a dangerous environment feel a little closer to home”, is one of the stated objectives. By the way: Mr. Bremer, currently a resident of Baghdad, had to renounce his participation to this year’s WEF on short notice. The Sandwich-girl, about 17-18 years old, disrupts the ordered procedure of the limousine-procession: she runs out on the street and stops traffic. She tries to communicate with the big shots. Yet, this is difficult, because they are sitting in the back of the cars, sandwiched in by two bodyguards. Nevertheless, communication happens. With only a few exceptions, the windows in all limousines are let down. Some drivers and bodyguards react aggressively. Some look at the pretty girl and think of something completely different than ‘dignity’. The Sandwich-girl takes advantage of this. She leans into the car and conveys to the passengers her message of human dignity and peace. A butterfly beating his wings in Europe can cause an earthquake in China – and the Sandwichgirl seems to know it.

Hans Castorp, the hero of Thomas Mann’s “Magic Mountain”, might have been led by the ‘white transcendence’ of Davos in winter to unknown spaces of consciousness. Sadly, this did not prevent him from saying good-bye to the ‘Berghof’ beneath the mountain Seehorn and to follow the call of war. Thomas Mann describes one of his experiences during the First World War as the following: “The product of a perverted science, laden with death, slopes earthward thirty paces in front of him and buries its nose in the ground; explodes inside there, with hideous expense of power, and raises up a fountain high as a house, of mud, fire, iron, molten metal, scattered fragments of humanity”. 1 A procession of limousines crawls along the Talstraße. An Audi behind a Jaguar behind a Mercedes behind a BMW behind a Bentley crawls along the gradually freezing snow slush. Camouflage-coloured military vehicles and white police cars contribute a colourful change to the all-black procession. Some people are on the streets as well: tourists that head for the pizza place Padrino, young ravers and snowboarders that make for the ‘Bolgen’ in order not to miss the beginning of the party, and everywhere constantly patrolling soldiers and police in groups of two or three. The message which the Sandwich-girl carries on her body consists of two lines. The first line reads ‘dignity’. The second ‘human rights’.

Roland Müller (1946) lives as a writer in Switzerland and Italy. He is also a member of the artist group TOI (www.toi.ch) and is currently working on the interactive narration “20 Nanjing Road” (www.shanghai-story.net). His last publication is “Babylon 1.7 – a declaration of love to the media” (2001). Davos is his personal cross-country skiing paradise, that he visits every year. - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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of the at the time deeply disappointed intellectual and cultural scene, who had hoped that with the integration of Switzerland into Europe the isolation of the native culture could be surmounted. But Switzerland doesn’t even appear. Actually, at the founding of the Swiss nation in 1848, the question came up as to how a land with four languages and not under the influence by the - at the time - dominant ideological concepts of a unified cultural identity, could even be legitimate. A national culture, which delivered pictures and myths, around which the Swiss uniqueness could be consolidated, had to be quickly created. The mountains, the farmers and the army belonged to the central motifs of this new, national culture. The mountains were validated as the symbol of the unshakable durability of the just founded confederation, whose existence was still threatened by inner conflicts. The farmer was seen as the prototype of the free, democratic citizen. The soldier embodied the unbroken will to maintain the newly won freedom and neutrality. During the search for national monuments several competitions took place, for instance for the Federal Building in Bern. Artists such as Ferdinand Hodler were commissioned to immortalize the essential idea of Switzerland in large murals in the interior of the parliament. A for its time breath-taking panorama of the world of the mountains of the Vierwaldstättersee (lake of the four forest cantons) - a view from a timeless elevation - was created. It was the untouched landscape as allegory, without a trace of people or their culture. The political myth of the Alps reached finally after World War II its zenith with the “Réduit Mythos”. 2 The idea that one could in the event of a crisis retrench back into the mountains and take shelter influenced an entire generation, and has basically influenced politics until today.

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“La Suisse n’existe pas” was in hindsight the starting signal for the launch of a ‘New Switzerland’. Even without the political integration into the EU, in the course of the 1990s, a radical process of assimilation followed. The restructuring took place beyond a European social perspective on a purely structural level, and was levelled at the optimisation of economic benefits. In federally organized Switzerland, where each canton and local municipality can determine how many taxes they want to collect, neoliberal paradigms can simply prevail. The tradition of direct democracy politics is participatory and every single measure is staged. It is not something that is abstract or sent from ‘above’. Most of the governing bodies are occupied by professional citizens, who out of completely pragmatic reasons set about dealing with problems in the same way that they would deal with them at home or in their businesses. Thus, the call in the 1990s for privatisation, self-optimisation and self-initiative seemed completely ‘natural’. Since then, this voluntarily and seemingly autonomous fulfilment of liberal rules and norms has brought Switzerland in the “global competition of nations” many leading positions, from the “ability to globally compete” to “the best place to start a business” to “the most expensive place in the

world”. The entrepreneurally conceived nation cannot presume, however, that its citizens voluntarily decide in its favour. Liberal motifs increasingly come into conflict with the fact that we are all being forced into a certain citizenship. The immanent forced regime is successfully being masked by formal gestures such as the introduction of ‘customer oriented’ public services and an advanced politics of image. The entrepreneurally interpreted nation has therefore, in opposition to authoritarian or bureaucratic nations, also a changed need for representation. Within the state the citizens must continually be motivated and activated as being engaged and participatory. Outside of the state, what counts is winning as much sympathy and credibility with potential customers and investors as possible. In both cases the old national ideas and systems of values prove to be completely inappropriate. At best they deliver a few motifs, which could play a roll in the creation of new labels for the state. The brand Switzerland had its first big appearance at the Expo 2000 in Hanover. The building, which was designed by Peter Zumthor, was an approximately 50 x 60 meter large structure of piled-up wood, which created a labyrinth of corridors and courtyards. 3000 cubic meters of freshly cut Scots pine and larch wood was directly imported from the Swiss mountains. Musicians moved through the passages and spaces with the assignment of transforming the pavilion with all sorts of noises and tones and now and then improvised serenades into a noise sculpture, which would capture the interest of the public. At two different bars selected culinary specialties were offered. The instrumentalization of culture as a means of image building was refined. The Swiss Pavilion should bear witness to an exclusive taste and still be natural and sensual; it should come off as modern and yet anchored in tradition; it should radiate simplicity and modesty (although the investment in the structure came to 18 million Swiss Francs). The new brand Switzerland is no longer being communicated with the same old tourist photos of mountains and folklore. The mountains have been sublimated into the aroma of larch wood. Cheese is presented as a gourmet specialty and folklore as an experimental reference of tones. The message being: Switzerland is the appreciation of reduction and restrain and of a heightened consciousness for the higher values. If a ‘New Switzerland’ was reachable... The most elaborate appearance of the brand Switzerland until now took place in 2002 within the framework of the Expo.02. The somewhat anachronistic large event of a national exhibition is carried out by Switzerland every 30 or 40 years. Through the large intervals of time each regional exhibition retrospectively receives a specific meaning and so becomes in every epoch the central event of reflection, and at the same time, of the renewal of an ever-changing national consciousness. Practically all of the trends and themes of the 1990s were called upon in the altogether 59 large and small exhibition projects of the Expo.02. The large arrangement of the “Arteplage” for instance Jean Nouvel’s cube in the Murtensee and Dillier + Scofidio’s cloud - created a kind of metanarrative. The federal

government itself participated with four of its own projects. The “new understanding of the state” is evident in the selection of themes. Instead of historical monuments and national arguments, the exhibition “Palace of Equilibrium” (“Palais d’équilibre”) reflect over the “endurance of the nation’s own political and economic transactions”. “The Dock” (“Die Werft”) conveyed the central monopoly for security for the neoliberal state. Architecture reminiscent of a shipbuilding yard with cranes, which could be moved towards one another, symbolized “the construction site of national security”. In a kind of kinetic sculpture, gripping pictures of “global risk-factors” as well as symbolic tools to control the risks, created around the visitors steadily changing constellations of meaning. It was the politics of security as children’s playing-blocks. Rather more unintentionally staged was the central problem which politics, reduced to risk management, raises: the reduction of complex societal connections and effects to dangerous clichés. To the pictures for current threats belonged, for instance, globes with statistical facts concerning the streams of migration and the x-ray of a freight with the schematic human shapes of “illegals”. Finally, in the exhibition “New DestiNation” (“Nouvelle DestiNation”) was staged the “customer friendly” state. The pavilion, an inflatable white tent, had the shape of a lung and pulsed almost undetectably in minute-time. The interior had the look of a sports arena with gymnastics equipment, basketball-hoops and the special floor covering of indoor sports halls. Equipped with radio earphones a “personally experienced sportive course” guided one through different inductive zones of hearing and the new public services of the modern state to the goal of a self-optimised citizenship. During the Expo.02 much was surmised about whether this was the definitive coming-out of a self-confident and self-reflective Switzerland. Many journalists were openly astonished that visitors thankfully took on the “challenging” offering of interactive experiences and enthusiastically participated in the experiences. For a moment it seemed as if a ‘New Switzerland’ was reachable: culturally significant, creative, tolerant and open. Today, not even those who in the 1990s were active in the culture and club scene in Zurich, who gave the city a high profile and contributed not insufficiently to the Swissness-hype, are convinced of this. The fact is that since the Expo.02 the asylum law has newly been tightened up, the legalisation of marijuana did not go through and Blocher was elected into the Federal Council. The functional liberalization of society, which has been forcefully pushed forth in the last 10 years in Switzerland - including the reorganization of governing and administrative bodies - is not imperatively dependent on liberal values. Until now, it seemed more opportune to frame the ongoing changes in progressive and culturalised images and to communicate these changes as a new openness. The “new relationship between the citizens and the state”, for instance the retreat of the state from social and societal responsibilities, can obviously be effectively legitimated with conservative values and heightened severity. A more exact observation of the exhibition “New DestiNation” would have made clear that in the high-tech sports-ambient of the pavilion it was not so much the game which was in the

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For the World Economic Forum (WEF), Davos offers quite a glamorous stage to global players. Everything ‘important’ however happens behind the scenes, in the hotel suites, the bars and the gourmet delis. Roland Müller observes the hustle and bustle from the window of his hotel apartment and notices one protagonist, - who tries to intrude into this obscure network: a young women, who confronts the powerbrokers of global- - ization, behind the backdrop of the big stage.

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foreground but rather personal fitness as preparation for a more difficult altercation - a game, where the state merely concerns itself with the enforcement of the rules. And so, the new label Switzerland seems at once rejecting, aloof and anonymous. In order to reach the intended audience, i.e. the financial and business elite of the world, it does not need, after the successful introduction of the new corporate identity, the culture-scene anymore. A short time ago, for the Swiss contribution to the world exhibition of 2005 in Japan, Presence Switzerland introduced a concept with the title “The Mountain”: “The alpine world of the mountains will be central and evocative for the overall theme of ‘The Wisdom of Nature’. The visitors will be positively engaged through the modelling of the facade as an artificial rock formation”. In addition to the exhibition concept, the accompanying cultural program of Pro Helvetia (69 KB) and the information about the planned investment seminar (204 KB) can be downloaded on the homepage of Presence Switzerland. Peter Spillmann (1961) works as artist and exhibition organizer in Zurich and Berlin. Changing projects and integrative connections with such themes as the economy, self-organized cultural customs, urbanism and the cultural construction of landscapes, for example “never look back” (2001), “Be Creative! Der kreative Imperativ” (2003). Cofounder of several self-organized projects (for example “Labor k3000”). Between 2000-2002 he was the artistic director of the exhibition “Route Agricole / Expoagricole” in the context of the Expo.02.

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It had snowed all day and still kept snowing when the Sandwich-girl appeared on the Talstraße. The snow didn’t fall so thickly that the military helicopters above had problems in steering into their destinations in Davos. But the snow was wet and heavy and all of a sudden a load of it came down from the roof and hit a pedestrian, who happened to look up, right in the face. It was around 8.15 p.m, exactly the time when the big shots among the participants of the World Economic Forum, after having relaxed a bit in their luxurious hotel suites, have their chauffeurs drive them to dinner with friends. The Sandwich-girl was cold in her sneakers, a jeans-jacket over an Espritsweatshirt and with soaked hair, which was held by a clip with light-emitting diodes left and right that sent out permanently red signals. But this was not the real message of the Sandwich-girl. “If a sparrow cannot fall from heaven without God knowing it, how can an empire raise without its help?” Benjamin Franklin once asked, a bit dramatically. A good question though, and one which WEF-head Klaus Schwab has read as well: on the back of the last Christmas card by the US Vice president. How was this meant? Schwab questioned Dick Cheney after his ‘special address’ to the WEF participants on January 24th. His wife looked up the quote, he responded, then pondered shortly and added: “It shouldn’t be taken as an indication that the United States sees itself as an empire.” The Talstraße runs parallel to a boulevard a few hundred metres above – the elegant, glittery strip of Davos. Both are one-way roads. On the promenade the traffic from Davos-village at the convention centre comes towards Davos-square. On the Talstraße traffic comes in the opposite direction. Yet, sometimes traffic rules are suspended due to exceptional conditions. That is when the WEF takes place and the convention centre cuts itself off. There is no getting through then, it is just for the WEF people. Police and heavily armed military constantly seek out protestors. But tonight there are none on the streets. The only protestor is the Sandwich-girl down at the Talstraße.

Representatives of Halliburton had already shown up in Baghdad on April 20th, eleven days before the war on Iraq was officially declared to be over. They see themselves as ‘forces multipliers’. “Every time, when soldiers thank you for a clean uniform or a warm meal, it is like a little success-story”, explains the web page of the all-round enterprise. “To make our troups in a dangerous environment feel a little closer to home”, is one of the stated objectives. By the way: Mr. Bremer, currently a resident of Baghdad, had to renounce his participation to this year’s WEF on short notice. The Sandwich-girl, about 17-18 years old, disrupts the ordered procedure of the limousine-procession: she runs out on the street and stops traffic. She tries to communicate with the big shots. Yet, this is difficult, because they are sitting in the back of the cars, sandwiched in by two bodyguards. Nevertheless, communication happens. With only a few exceptions, the windows in all limousines are let down. Some drivers and bodyguards react aggressively. Some look at the pretty girl and think of something completely different than ‘dignity’. The Sandwich-girl takes advantage of this. She leans into the car and conveys to the passengers her message of human dignity and peace. A butterfly beating his wings in Europe can cause an earthquake in China – and the Sandwichgirl seems to know it.

Hans Castorp, the hero of Thomas Mann’s “Magic Mountain”, might have been led by the ‘white transcendence’ of Davos in winter to unknown spaces of consciousness. Sadly, this did not prevent him from saying good-bye to the ‘Berghof’ beneath the mountain Seehorn and to follow the call of war. Thomas Mann describes one of his experiences during the First World War as the following: “The product of a perverted science, laden with death, slopes earthward thirty paces in front of him and buries its nose in the ground; explodes inside there, with hideous expense of power, and raises up a fountain high as a house, of mud, fire, iron, molten metal, scattered fragments of humanity”. 1 A procession of limousines crawls along the Talstraße. An Audi behind a Jaguar behind a Mercedes behind a BMW behind a Bentley crawls along the gradually freezing snow slush. Camouflage-coloured military vehicles and white police cars contribute a colourful change to the all-black procession. Some people are on the streets as well: tourists that head for the pizza place Padrino, young ravers and snowboarders that make for the ‘Bolgen’ in order not to miss the beginning of the party, and everywhere constantly patrolling soldiers and police in groups of two or three. The message which the Sandwich-girl carries on her body consists of two lines. The first line reads ‘dignity’. The second ‘human rights’.

Roland Müller (1946) lives as a writer in Switzerland and Italy. He is also a member of the artist group TOI (www.toi.ch) and is currently working on the interactive narration “20 Nanjing Road” (www.shanghai-story.net). His last publication is “Babylon 1.7 – a declaration of love to the media” (2001). Davos is his personal cross-country skiing paradise, that he visits every year. - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Thomas Mann “The Magic Mountain” (Random House Vintage Classics, -

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- Illustration__________________________________________________________ - Maria Tackmann (1982) - lives in Biel/Bienne, Switzerland; she is working as a graphic designer and has also cofounded the artist group 'neyelon'. Some of her works are published in "Flut", a project - by the graphic network 'Revolver', www.revolover.ch - ----------------------------------------------------------------------------------------------------

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Anton Moos (1947) lives in Horgen (Lake Zurich). He is the father of three and a staff consultant in a region- al employment centre in Zurich. Before this he worked in the job centre of Swissair and published, after the grounding of the airline, “Black Box Swissair” (Limmat Verlag, 2003) -

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In the Alpine confederation no one ever imagined that their favourite - trade mark – the 1931 founded Swissair – could go bankrupt. However, the unimaginable happened at the beginning of the 21st century. An- ton Moos looks back and detects shadowy signs of poverty in a society - marked by wealth.

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- ---------------------------------------------------------------------------------------------------- In his project “Show your flags/Show your colours” (“Flagge zeigen/Farbe bekennen”) Olivier Houmard creates new flag colours by mixing the different - colours of existing flags in the percentage in which they appear. The mixture of - colours for “No.162“ was calculated from the percentage of the different colours - of the Swiss flag. In a federal resolution from December 12th, 1889, Switzerland defined the percentage of the colours for the Swiss flag. The colours are only - described as white and red (red as blood). - Houmard’s project was a part of the Swiss etc. installation at the exhibition “So - wie die Dinge liegen” (May 1st - July 4th, 2004) at the PhoenixHalle in Dortmund, Germany. -

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- RAL 3001 Red: - RAL 9010 White:

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As a consultant in the Regional Employment Centre I counseled hundreds of laid-off employees of the bankrupt Swissair, from unskilled labourers to members of the executive board. While politicians, economic leaders and unions blamed each other, and while the media gleefully exploited this spectacle of lies, I was confronted with people who had lost from one day to the next their job, their salary and their pride. Many realized now what they had instinctively sensed before – that they were only a cue ball in the fight for market shares. The president of the staff commission boiled it down to a point when he said: “Certain groups in the economy did not even have the slightest interest in the survival of Swissair”. And that is exactly what happened: the two major banks decided, together with the government, the end of the 70-year old national airline. The thing only they forgot to say, was that this is quite a normal process in a capitalistic economy and hardly worth mentioning. An insightful clerk made another point: “You can’t rely on today’s managers anymore. Only one thing counts for them: their ‘self-realisation’”. In doing so, the managers, however, forgot that they had to take responsibility. There was just relentless expansion. By all means, they wanted to become Europe’s biggest and best airline. These top managers with their skyrocketing salaries and their ‘power’ attitude strained the company

more than they served it. The many cadres and the well paid specialized employees (technicians, flight captains, computer scientists) didn’t renounce anything and indeed even increased the expansion of costs on the shoulders of the small employees. This was possible because hardly anybody was organized in unions and on the part of the unions. And other organisations nothing, or almost nothing was done for the protection of the fellow employees. The ones who suffered were especially women, foreigners and ‘lower-level employees’. “No superior had talked to me before the lay-off. And the same day when I left the company as a permanent employee, new temporary work forces were hired”, says, for example, a Turkish assembly-line worker, who was employed by ‘Gate Gourmet’, a company for airline food that used to be part of Swissair but was outsourced as an independent company in the late 1990s. An Asian colleague utters in a silent voice, her hands in front of her face, what no one here says aloud: “In most businesses nowadays the aspect of humanity is neglected, just because the economic result counts. Everyone here comes as a labour force but not as a human being to work. We foreigners can give a lot to this country, but matters always revolve around the material aspect. If it is not ‘in demand’ to reveal openly your feelings, thoughts and knowledge, then people become more and

more lonely”. “The top people in the economy behave like race drivers and they only want to have the quickest, youngest and fittest employees in their business”, another laid-off woman told me. I will also never forget the surprising and sudden encounter with a former colleague from the Philippines. I had just taken a stroll near the Parade Square in Zurich, where behind elegant office facades the vaults of the two major banks UBS and Credit Suisse are located. „Hello Mister Moos, poor fellow, I pray for you. I go back now to my home country. I will be poor there, but I will be happier. Here, just where we are standing now, underneath, is all the bloody money from all over the world. It does not belong to you, and it makes you cold and hard in your heart. For me, it’s too cold here, I go back. Poor fellow, you have to stay here with all that money. I pray for you.” Then he disappeared behind the next corner and left me standing, flabbergasted, in the richest country in the world.

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75B consists of Robert Beckand (1972), Pieter Vos (1971) and Rens Muis (1974). They met at the Academy of Arts in Rotterdam and continued working together after graduating in 1997 in a studio at the van Oldenbarneveltstraat in Rotterdam. Next to working for clients, they develop their own projects. The above graphic is taken from "Kleur!", a series of six coloring books, which they spread for free at schools, hospitals, shopping centres etc. People could send in their results; the best ones were published seperately. Finally the contributions were exhibited at the Artotheek Schiedam. The show was opened by childrens' television-celebrity 'Tampie'. www.75b.nl

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Which analogy or metaphor could describe the spatial construction that Switzerland, in regard to its national frontiers, has projected and – perhaps in contradiction to the spatial construction – actually cultivated in the twentieth century? The following, slightly exaggerated analogy would fit best. Until today Switzerland has understood itself as a union of largely small, autonomous states in a confederation with narrowly limited, central authorities. This understanding has been and is still well secured by a respective political distribution of power. The still prevailing ignorance of the role of urban centres and the concentration instead on rural and peripheral areas can be seen as a consequence. And yet the paradox of this development is that the efficiency of these regional promotions triggered a transformation process that dissolved what one actually wanted to maintain, which was the rural dimension in many of these regions.

Your observation that contemporary Switzerland presents a multi-core, condensed space of different agglomerations suggests the conclusion that the Swiss confederation might be perceived as a decentralized but nevertheless homogenous construct. A construct, which you describe with the neologism ‘urbanscape’. How would you sort this term into the history of state models? ‘Urbanscape’ Switzerland is foremost an expression of a profound irritation over the fact that in approximately the last six decades of societal change, cultural connotations of ‘city’ and ‘country’ – signifying differences that had been applied to all areas of life for centuries – have vanished. Today, the reference to ‘city’ or ‘country’ can hardly shed light on anything anymore. This process, however, is not limited to Switzerland alone. The Swiss debate was essentially triggered by the edge-city discourse of Thomas Sieverts, who launched it in Germany in the 1990s. In order to understand the origin and change of today’s spatial realities a close look is required, by which neither the new is rashly transformed into the old nor unproven congruities between seemingly similar processes are claimed. The neologism ‚urbanscape’ expresses thus a turn towards the specifications of the spatial change in Switzerland, having a lot to do with the and the historical background. There is, for instance, no domineering big city in Switzerland, as in the case of Paris in France, London in Great Britain or Vienna in Austria. The spatial compartmentalization has had the effect that a great amount of the investments into cultural and educational institutions as well as in the population has concentrated within the triangle of the cities Bern, Basel and Zurich since the Second World War. Therefore, not an accumulation process in one centre is to be noted, but rather a diffusion process that has successively inscribed urban markers on the country. Taking these assumptions into consideration, the term ‘urbanscape’ cannot be understood as a direct contribution to the history of state models. It is rather an indicator for the subversive moment that is inherent to modern and post-modern spatial change: state entities are less and less capable of depicting and directing daily society and thus face growing problems of legitimisation. Could Switzerland be considered as a city-state? The metaphor ‘city’ as a means to describe spatial realities has had in Switzerland a long tradition, which dates back to Jean-Jacques Rousseau.[2] Pivotal for today’s spatial concept and the political formation of the state is still the dictum of the ‘decentralised, big city Switzerland’, first devised by the architect and urban planner Armin Meili in 1933. The basic design of this idea still tangibly reverberates in current

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To the outside, Switzerland presents itself as a spatially compact struc- ture, for example by keeping a closer eye on its borders than other European states. Yet on the inside a process has taken place that is frag- menting the nation in the Alps, hence placing its external frontiers into - question. Angelus Eisinger, who coined the term ‘Stadtland’ (‘urbanscape’) 1 in regard to this territorial faculty, reflects in the following in- terview upon the spatial structure of the Swiss state model. Intrinsic spatial mechanisms often underlie the foundation of states. Could you sketch the particular relation between state and space in the case of the foundation of Switzerland? The foundation of the Swiss Federal State in 1848 – the birth of modern Switzerland so to say – belongs to the first wave of nation foundations that emerged in this century of nationalism. All of Europe was encompassed into a ‘nation building’, which basically consisted of a construction process that attempted to provide new identities and to settle their spatial extension. The recourse to history and the mythologizing of historical events played a key role, as particularly the German, Italian as well as the unsuccessful Czech example shows. Of course, such reformulations of history happened in Switzerland as well. Yet, in contrast to other European nations the constructive moment was quite transparent – it was even mythically exaggerated. Until today, Switzerland comprehends itself as a ‘nation of will’. In this self-description it becomes quite evident that consciously drawn, even rational decisions were at play at the origin of modern Switzerland. The fact that national states are always inventions also played a very prominent role in the Swiss founding myth. Switzerland once composed itself of a merger of already existing, politically small entities that possessed a high degree of autonomy. The federal state of 1848 expressed that the mutual acknowledgement of differences and the right of local self-determination constituted the vantage point for a common identity and the claimed space. The national political development since then has to be seen under these preconditions. Many of today’s problems in Switzerland, such as its attitude towards Europe, can only be comprehended considering this background.

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discussions of ‘Netzstadt Schweiz’ (‘net city Switzerland’) or ‘Metropole Schweiz’ (‘metropolis Switzerland’). And yet: the idea of ‘Stadt Schweiz’ (‘Switzerland city’) misses, in my opinion, the current discussion entirely. The traditional understanding of a city-state implies a spatial unity with clear frontiers to the outside and, reciprocatingly, frontiers to the inside. However, even the Swiss official annual statistics have long been designating the functional space for Basel, Geneva and Southern Switzerland across borderlines. Therefore, the identity of spatial order, which has gone lost in the course of last decades, cannot be re-established by a rhetorical trick. The word ‘city’ would only introduce a term suggesting homogeneity for a basically still obscure concept of the new. The search for an adequate design has to assume that the dynamics of society happen in different conurbations, which are entangled in various ways with their adjoining states. One has to create institutional conditions for this region that enable a further development beyond borderlines while simultaneously maintaining the cohesion of Switzerland. Not a city-state but a state of urbanised, trans-border regions is the adequate description for Switzerland. Which are the political tasks that the current Swiss spatial construct demands of the state? Switzerland today is basically the result of a compromise that has determined the direction of its politics since the 1940s. This compromise bases essentially on the idea of a regional balance, with which regional identities should be maintained. The interplay of infrastructure, traffic, agrarian and fiscal policies and regional promotion enable the wide spatial dispersion of modernization benefits that fundamentally differentiate Switzerland from many other European states. However, the unintended costs and side effects of this strategy are becoming more and more noticeable. The loss of natural spaces as well as the fact that the tight state budgets have increasing difficulties in financing the obsolete compromise adds to the problem. Many political fields such as agricultural or regulatory policies are prefigured on an international level and therefore steadily place the ‘pillars’ of the present system in doubt. Nor does the national political structure of Switzerland know any institutional facilities for the greater regions, whose faculties will decisively influence the further development of society. Moreover, the federally conditioned competition between the cantons leads to a questionable (fiscal) contest that endangers the supply of education and infrastructure in the greater regions that encompass several cantons.

What sort of climate does the current spatial construct of Switzerland offer to the global economy? In regard to the so-called soft as well as hard locational factors, Switzerland still holds advantages that express themselves in an innovative and versatile service and industry location. In addition, there are the traditional factors such as domestic stability, security and quality of infrastructure as well as a high educational level. Other advantages can surely be seen in the small space status and the resulting proximity to natural and recreational resources. This aspect will possibly influence the location choice of global players, such as the recent decision by Google to move to Zurich reveals: one can easily reach Paris and Milan from Zurich within a few hours by train and Zurich airport offers good intercontinental connections. At the same time there are the Alps and the lake right in front of the door of a manageable city with a metropolitan atmosphere. However, this statement of positive moments is opposed to critical indicators for faltering reforms that threaten to erode the locational advantages. For instance: the federal structure continues to lead to an inefficient handling of scant resources. On the one hand, this structure multiplies public supply in questionable ways. On the other hand, the same mechanism triggers unsatisfying goods and services in the centres of Basel and Zurich, because the adjoining cantons can profit as free-loaders from the centrally located services. Here, a call for action is needed. A call for action, which is likely to fail because of the shortsighted resistance of the cantons. Finally, the question of the relationship to Europe divides contemporary Switzerland into two camps. There are currently some indications that the European Union increasingly treats Switzerland as the external border of Europe. The way Swiss politics reacts to this situation, whether by walling-off or a new approach, will be decisive for the future of this nation.

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Angelus Eisinger (1964) is a lecturer at the ETH Zurich and other Swiss universities. In his research, teaching and publications he deals with questions of architectural, regional and urban development in the 20th century. Freelance collaboration with various architects’ offices on urban development and planning questions. His most recent publication is „Städtebautheorie und Stadtentwicklung in der Schweiz 1940-1970. Eine Archäologie der Moderne. Habilitation D-GESS ETH Zurich“ (GTA-Verlag, 2004).

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Photo______________________________________________________________ Katja Gretzinger (1972) is based in Berlin and Zurich. She works as art director and designer on typographic and graphic projects. The picture shown here was part of a work about summer for the Rote Fabrik Zeitung in Zurich. She has recently been working on the editorial design of the new german cultural magazine “Metropol”. www.mikati.net

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In the Alpine confederation no one ever imagined that their favourite - trade mark – the 1931 founded Swissair – could go bankrupt. However, the unimaginable happened at the beginning of the 21st century. An- ton Moos looks back and detects shadowy signs of poverty in a society - marked by wealth.

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Anton Moos (1947) lives in Horgen (Lake Zurich). He is the father of three and a staff consultant in a region- al employment centre in Zurich. Before this he worked in the job centre of Swissair and published, after the grounding of the airline, “Black Box Swissair” (Limmat Verlag, 2003) -

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No. 162 Switzerland

- RAL 3001 Red: - RAL 9010 White:

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77,33 % 22,66 %

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As a consultant in the Regional Employment Centre I counseled hundreds of laid-off employees of the bankrupt Swissair, from unskilled labourers to members of the executive board. While politicians, economic leaders and unions blamed each other, and while the media gleefully exploited this spectacle of lies, I was confronted with people who had lost from one day to the next their job, their salary and their pride. Many realized now what they had instinctively sensed before – that they were only a cue ball in the fight for market shares. The president of the staff commission boiled it down to a point when he said: “Certain groups in the economy did not even have the slightest interest in the survival of Swissair”. And that is exactly what happened: the two major banks decided, together with the government, the end of the 70-year old national airline. The thing only they forgot to say, was that this is quite a normal process in a capitalistic economy and hardly worth mentioning. An insightful clerk made another point: “You can’t rely on today’s managers anymore. Only one thing counts for them: their ‘self-realisation’”. In doing so, the managers, however, forgot that they had to take responsibility. There was just relentless expansion. By all means, they wanted to become Europe’s biggest and best airline. These top managers with their skyrocketing salaries and their ‘power’ attitude strained the company

more than they served it. The many cadres and the well paid specialized employees (technicians, flight captains, computer scientists) didn’t renounce anything and indeed even increased the expansion of costs on the shoulders of the small employees. This was possible because hardly anybody was organized in unions and on the part of the unions. And other organisations nothing, or almost nothing was done for the protection of the fellow employees. The ones who suffered were especially women, foreigners and ‘lower-level employees’. “No superior had talked to me before the lay-off. And the same day when I left the company as a permanent employee, new temporary work forces were hired”, says, for example, a Turkish assembly-line worker, who was employed by ‘Gate Gourmet’, a company for airline food that used to be part of Swissair but was outsourced as an independent company in the late 1990s. An Asian colleague utters in a silent voice, her hands in front of her face, what no one here says aloud: “In most businesses nowadays the aspect of humanity is neglected, just because the economic result counts. Everyone here comes as a labour force but not as a human being to work. We foreigners can give a lot to this country, but matters always revolve around the material aspect. If it is not ‘in demand’ to reveal openly your feelings, thoughts and knowledge, then people become more and

more lonely”. “The top people in the economy behave like race drivers and they only want to have the quickest, youngest and fittest employees in their business”, another laid-off woman told me. I will also never forget the surprising and sudden encounter with a former colleague from the Philippines. I had just taken a stroll near the Parade Square in Zurich, where behind elegant office facades the vaults of the two major banks UBS and Credit Suisse are located. „Hello Mister Moos, poor fellow, I pray for you. I go back now to my home country. I will be poor there, but I will be happier. Here, just where we are standing now, underneath, is all the bloody money from all over the world. It does not belong to you, and it makes you cold and hard in your heart. For me, it’s too cold here, I go back. Poor fellow, you have to stay here with all that money. I pray for you.” Then he disappeared behind the next corner and left me standing, flabbergasted, in the richest country in the world.

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75B consists of Robert Beckand (1972), Pieter Vos (1971) and Rens Muis (1974). They met at the Academy of Arts in Rotterdam and continued working together after graduating in 1997 in a studio at the van Oldenbarneveltstraat in Rotterdam. Next to working for clients, they develop their own projects. The above graphic is taken from "Kleur!", a series of six coloring books, which they spread for free at schools, hospitals, shopping centres etc. People could send in their results; the best ones were published seperately. Finally the contributions were exhibited at the Artotheek Schiedam. The show was opened by childrens' television-celebrity 'Tampie'. www.75b.nl

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Which analogy or metaphor could describe the spatial construction that Switzerland, in regard to its national frontiers, has projected and – perhaps in contradiction to the spatial construction – actually cultivated in the twentieth century? The following, slightly exaggerated analogy would fit best. Until today Switzerland has understood itself as a union of largely small, autonomous states in a confederation with narrowly limited, central authorities. This understanding has been and is still well secured by a respective political distribution of power. The still prevailing ignorance of the role of urban centres and the concentration instead on rural and peripheral areas can be seen as a consequence. And yet the paradox of this development is that the efficiency of these regional promotions triggered a transformation process that dissolved what one actually wanted to maintain, which was the rural dimension in many of these regions.

Your observation that contemporary Switzerland presents a multi-core, condensed space of different agglomerations suggests the conclusion that the Swiss confederation might be perceived as a decentralized but nevertheless homogenous construct. A construct, which you describe with the neologism ‘urbanscape’. How would you sort this term into the history of state models? ‘Urbanscape’ Switzerland is foremost an expression of a profound irritation over the fact that in approximately the last six decades of societal change, cultural connotations of ‘city’ and ‘country’ – signifying differences that had been applied to all areas of life for centuries – have vanished. Today, the reference to ‘city’ or ‘country’ can hardly shed light on anything anymore. This process, however, is not limited to Switzerland alone. The Swiss debate was essentially triggered by the edge-city discourse of Thomas Sieverts, who launched it in Germany in the 1990s. In order to understand the origin and change of today’s spatial realities a close look is required, by which neither the new is rashly transformed into the old nor unproven congruities between seemingly similar processes are claimed. The neologism ‚urbanscape’ expresses thus a turn towards the specifications of the spatial change in Switzerland, having a lot to do with the and the historical background. There is, for instance, no domineering big city in Switzerland, as in the case of Paris in France, London in Great Britain or Vienna in Austria. The spatial compartmentalization has had the effect that a great amount of the investments into cultural and educational institutions as well as in the population has concentrated within the triangle of the cities Bern, Basel and Zurich since the Second World War. Therefore, not an accumulation process in one centre is to be noted, but rather a diffusion process that has successively inscribed urban markers on the country. Taking these assumptions into consideration, the term ‘urbanscape’ cannot be understood as a direct contribution to the history of state models. It is rather an indicator for the subversive moment that is inherent to modern and post-modern spatial change: state entities are less and less capable of depicting and directing daily society and thus face growing problems of legitimisation. Could Switzerland be considered as a city-state? The metaphor ‘city’ as a means to describe spatial realities has had in Switzerland a long tradition, which dates back to Jean-Jacques Rousseau.[2] Pivotal for today’s spatial concept and the political formation of the state is still the dictum of the ‘decentralised, big city Switzerland’, first devised by the architect and urban planner Armin Meili in 1933. The basic design of this idea still tangibly reverberates in current

-

To the outside, Switzerland presents itself as a spatially compact struc- ture, for example by keeping a closer eye on its borders than other European states. Yet on the inside a process has taken place that is frag- menting the nation in the Alps, hence placing its external frontiers into - question. Angelus Eisinger, who coined the term ‘Stadtland’ (‘urbanscape’) 1 in regard to this territorial faculty, reflects in the following in- terview upon the spatial structure of the Swiss state model. Intrinsic spatial mechanisms often underlie the foundation of states. Could you sketch the particular relation between state and space in the case of the foundation of Switzerland? The foundation of the Swiss Federal State in 1848 – the birth of modern Switzerland so to say – belongs to the first wave of nation foundations that emerged in this century of nationalism. All of Europe was encompassed into a ‘nation building’, which basically consisted of a construction process that attempted to provide new identities and to settle their spatial extension. The recourse to history and the mythologizing of historical events played a key role, as particularly the German, Italian as well as the unsuccessful Czech example shows. Of course, such reformulations of history happened in Switzerland as well. Yet, in contrast to other European nations the constructive moment was quite transparent – it was even mythically exaggerated. Until today, Switzerland comprehends itself as a ‘nation of will’. In this self-description it becomes quite evident that consciously drawn, even rational decisions were at play at the origin of modern Switzerland. The fact that national states are always inventions also played a very prominent role in the Swiss founding myth. Switzerland once composed itself of a merger of already existing, politically small entities that possessed a high degree of autonomy. The federal state of 1848 expressed that the mutual acknowledgement of differences and the right of local self-determination constituted the vantage point for a common identity and the claimed space. The national political development since then has to be seen under these preconditions. Many of today’s problems in Switzerland, such as its attitude towards Europe, can only be comprehended considering this background.

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discussions of ‘Netzstadt Schweiz’ (‘net city Switzerland’) or ‘Metropole Schweiz’ (‘metropolis Switzerland’). And yet: the idea of ‘Stadt Schweiz’ (‘Switzerland city’) misses, in my opinion, the current discussion entirely. The traditional understanding of a city-state implies a spatial unity with clear frontiers to the outside and, reciprocatingly, frontiers to the inside. However, even the Swiss official annual statistics have long been designating the functional space for Basel, Geneva and Southern Switzerland across borderlines. Therefore, the identity of spatial order, which has gone lost in the course of last decades, cannot be re-established by a rhetorical trick. The word ‘city’ would only introduce a term suggesting homogeneity for a basically still obscure concept of the new. The search for an adequate design has to assume that the dynamics of society happen in different conurbations, which are entangled in various ways with their adjoining states. One has to create institutional conditions for this region that enable a further development beyond borderlines while simultaneously maintaining the cohesion of Switzerland. Not a city-state but a state of urbanised, trans-border regions is the adequate description for Switzerland. Which are the political tasks that the current Swiss spatial construct demands of the state? Switzerland today is basically the result of a compromise that has determined the direction of its politics since the 1940s. This compromise bases essentially on the idea of a regional balance, with which regional identities should be maintained. The interplay of infrastructure, traffic, agrarian and fiscal policies and regional promotion enable the wide spatial dispersion of modernization benefits that fundamentally differentiate Switzerland from many other European states. However, the unintended costs and side effects of this strategy are becoming more and more noticeable. The loss of natural spaces as well as the fact that the tight state budgets have increasing difficulties in financing the obsolete compromise adds to the problem. Many political fields such as agricultural or regulatory policies are prefigured on an international level and therefore steadily place the ‘pillars’ of the present system in doubt. Nor does the national political structure of Switzerland know any institutional facilities for the greater regions, whose faculties will decisively influence the further development of society. Moreover, the federally conditioned competition between the cantons leads to a questionable (fiscal) contest that endangers the supply of education and infrastructure in the greater regions that encompass several cantons.

What sort of climate does the current spatial construct of Switzerland offer to the global economy? In regard to the so-called soft as well as hard locational factors, Switzerland still holds advantages that express themselves in an innovative and versatile service and industry location. In addition, there are the traditional factors such as domestic stability, security and quality of infrastructure as well as a high educational level. Other advantages can surely be seen in the small space status and the resulting proximity to natural and recreational resources. This aspect will possibly influence the location choice of global players, such as the recent decision by Google to move to Zurich reveals: one can easily reach Paris and Milan from Zurich within a few hours by train and Zurich airport offers good intercontinental connections. At the same time there are the Alps and the lake right in front of the door of a manageable city with a metropolitan atmosphere. However, this statement of positive moments is opposed to critical indicators for faltering reforms that threaten to erode the locational advantages. For instance: the federal structure continues to lead to an inefficient handling of scant resources. On the one hand, this structure multiplies public supply in questionable ways. On the other hand, the same mechanism triggers unsatisfying goods and services in the centres of Basel and Zurich, because the adjoining cantons can profit as free-loaders from the centrally located services. Here, a call for action is needed. A call for action, which is likely to fail because of the shortsighted resistance of the cantons. Finally, the question of the relationship to Europe divides contemporary Switzerland into two camps. There are currently some indications that the European Union increasingly treats Switzerland as the external border of Europe. The way Swiss politics reacts to this situation, whether by walling-off or a new approach, will be decisive for the future of this nation.

-

Angelus Eisinger (1964) is a lecturer at the ETH Zurich and other Swiss universities. In his research, teaching and publications he deals with questions of architectural, regional and urban development in the 20th century. Freelance collaboration with various architects’ offices on urban development and planning questions. His most recent publication is „Städtebautheorie und Stadtentwicklung in der Schweiz 1940-1970. Eine Archäologie der Moderne. Habilitation D-GESS ETH Zurich“ (GTA-Verlag, 2004).

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Photo______________________________________________________________ Katja Gretzinger (1972) is based in Berlin and Zurich. She works as art director and designer on typographic and graphic projects. The picture shown here was part of a work about summer for the Rote Fabrik Zeitung in Zurich. She has recently been working on the editorial design of the new german cultural magazine “Metropol”. www.mikati.net

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- Chandrika Kumaratunga, Sri Lanka 1994 – Mary McAleese, Irland 1997 – - Vaira Vike-Freiberga, Latvia 1999 – - Mireya Moscoso, Panama 1999 – - Tarja Halonen, Finland 2000 – Gloria Macapagal-Arroyo, Phillippines 2001 – -

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The sovereignty of states is presently being questioned as never before. - Immanuel Wallerstein argues that this is not because of a transformation of the world-economic structures but because of a transformation - of the geoculture: the cultural framework within which the world-sys- tem operates.

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Current Female Presidents

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"Martin Torrijos, the son of a former dictator, won Panama's first presidential - elections since the handover of the Panama Canal and withdrawal of U.S. troops - in December 1999, electoral authorities said Sunday. Torrijos - son of the late - dictator Gen. Omar Torrijos, who ruled Panama from 1968 until his death in 1981 - was exalted, but took care to avoid the ghosts of the past in his cam- paign.[...] Despite his authoritarian rule, some have fond memories of Torrijos' - father. He was liked for his folksy style, land reform and public works, and for - signing the treaty that resulted in the handover of the formerly U.S.-run canal to Panama. Now that Panama runs the canal, its biggest challenge is how to fi- nance an expansion of the waterway to handle wider ships.[...] Campaign offi- cials said the U.S.-educated Torrijos would focus on tax and spending reform, - negotiating a free trade agreement with United States, and improving the canal." -

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- Laura Horelli (1976) - lives and works in Berlin. Her research-intensive work deals with representational, social and gender issues in the context of globalization. For the project "Current Female Presi- dents (3/2001)" she investigated the careers of various female presidents after Tarja Halo- nen was elected president in Finland in March 2000.

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Altered States

Some glorify the state, while others say that it is the last remaining en- tity of the Middle-ages, and that one can now witness the state in its decline. Yet, what are the contemporary transformations taking place - across the globe that are causing this controversy? Michael Hardt is - equipped the position to answer this question.

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The Group of 22 is a group of countries opposing the current laws on agri- -

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culture and consists of Egypt, Chile, Colombia, Mexico, Costa Rica, the -

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Mr. Hardt, there are claims that the state will disappear; others talk about the endurance of the state. What is your point of view? It is right to point out the continuing force and relevance of the nation-state. It would be a mistake, however, to assume that through the nation-state one could understand political situations or even economic regulations. While states, and the dominant states in particular, remain extremely important, there are many aspects of political regulation today that have to be also understood beyond the abilities of single states. Yet, my conclusion is not that nation-states are no longer important, but rather that the sovereignty of nationstates is now tending towards a form, in which it figures in supra-national sovereignty. And this is what Toni Negri and I call ‘Empire’: an entity that one could describe as a network-form, including the powers of nation-states, in a differential and hierarchical way along with the major capitalist corporations, supra-national institutions (like IMF and the World Bank) as well as other local, national and perhaps international powers. In other words: the concept of Empire is an effort to figure a renegotiation of the structures of national power within a new framework. Could you elaborate further on the relationship between the state and the world economy? There are two ways of approaching this. One is in the form of the tests that one has to take in school. They ask you: A is to B as C is to D. Here A to B can be thought of as the relation between national capital and the nation-state. And that’s what Marx says about the relationship of state and capital. Individual capitalists do conflict with capital, but in the long term the nation-state does guarantee the collective long-term interests of capital. Now, if there is such a thing

today as global capital that goes beyond the traditional bounds of national capital, then there is a role of some form of sovereign power beyond the nation-state. In other words, some form of sovereign power must be able to do for global capital what the nation-state was able to do for national capital. This is another way of posing the hypothesis of Empire: In so far as capital in some of its forms today does exceed national boundaries and cannot be adequately regulated by the nation-state, there has to be a larger form of sovereignty that is able to guarantee the collective interest of global capital in the same way that the nation-state guaranteed the collective interest of national capital. So, as my ABCD goes, the nation-state is to national capital as ‘Empire’ is to global capital. The idea being that, yes, of course nation states are still necessary to guarantee all kinds of interests of capital, but that the nation states on their own are not capable of effectively regulating increasingly large segments of capital, which exceed national boundaries and require a larger framework. There are some ways in which nationstates in collaboration with the global, economic institutions like the WTO and the World Bank, manage to provide the necessary regulation for global capital. That’s one way of answering the question. The other way is an answer that Saskia Sassen would probably give. That is, we should not draw a strict division between national economic functionaries and the global economic sphere – i.e. the sphere of global economic regulation – because, in many cases, the national economic bureaucracy has a kind of dual function in so far as it has to aim towards a guarantee of national capital, while simultaneously obeying the interests of global capital. And this is not exactly a choice between either the national or the global. Even at the level of the anthropology of these actual economic bureaucrats, one

can observe that many of them function in a dual role of simultaneously taking care of national and global interests. So there is a middle terrain, or say a terrain of transition between national economic regulation in the interest of national capital and global economic regulation in the interest of global capital. This is what Saskia Sassen calls denationalisation. What role does the state, first as an organisational form to gain independence and second as a framework to define the rules, play in your and Toni Negri’s conception of the ‘multitude’ – this global network of non-governmental actors that is supposed to be a counterforce to ‘Empire’? If one uses the notion of the state in a general way, say, as the possibility of the construction of society, respectively, the construction of government as such, then one could say that the concept of the multitude is a means of constructing a democratic organisation. Yet, the way I actually understand the state is in line with a certain tradition, in which the state is an apparatus that stands above society as an instrument of class domination. If one conceives the state in that way, then it is a fundamentally anti-democratic institution. And then the former concept of the state has no place in our conception of the multitude. However, it does not mean that one could not propose alliances with a group of states like the Group of 22 1 in their effort to transform the economic order. So, I do not mean categorically that “one will never participate” in any state as such. But the state, at least in our way of thinking, cannot function as a construct of democracy. Michael Hardt (1960) is Associate Professor in the Literature Program at Duke University. Together with Antonio Negri he wrote “Empire” (Harvard University Press, 2001), a book on the new political order of globalisation that has become a bestseller. “Multitude: War and Democracy in the Age of Empire” (Penguin Books, 2004) is a sequel to this publication.

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The modern state is a peculiar creature, since these states are socalled sovereign states within an interstate system. I contend that the political structures that existed in non-capitalist systems did not operate in the same way, and that they constituted qualitatively a different kind of institution. What then are the peculiarities of the modern state? First and foremost, that it claims sovereignty. Sovereignty, as it has been defined since the sixteenth century, is a claim not about the state but about the interstate system. It is a double claim, looking both inward and outward. Sovereignty of the state, inward-looking, is the assertion that within its boundaries (which therefore must necessarily be clearly defined and legitimated within the interstate system) the state may pursue whatever policies it deems wise, decree whatever laws it deems necessary, and that it may do this without any individual, group, or sub-state structure inside the state having the right to refuse to obey the laws. Sovereignty of the state, outward-looking, is the argument that no other state in the system has the right to exercise any authority, directly or indirectly, within the boundaries of the given state, since such an attempt would constitute a breach by the given state’s sovereignty. No doubt, earlier state forms also claimed authority within their realms, but ‘sovereignty’ involves in addition the mutual recognition of these claims of the states within an interstate system. That is, sovereignty in the modern world is a reciprocal concept. However, as soon as we put these claims on paper, we see immediately how far they are from a description of how the modern world really works. No modern state has ever been truly inwardly sovereign de facto, since there has always been internal resistance to its authority. Indeed, in most states this resistance has led to institutionalising legal limitations on internal sovereignty in the form, among others, of constitutional law. Nor has any state been truly sovereign on the outward, since interference by one state in the affairs of another is common currency, and because the entire corpus of international law represents a series of limitations on outward sovereignty. In any case, strong states notoriously do not reciprocate fully recognition of sovereignty to weak states. Within the framework of the capitalist world-economy, there has been a slow but steady linear increase, of the internal power of states and of the authority of institutions in the interstate system. Still, we should not exaggerate, because these structures went from a very low point on the scale to somewhere further up the scale, but at no point have they approached anything that might be called absolute power. Furthermore, at all points in time, some states (those we call strong) had greater internal and greater external power than most other states. The political system of sovereign states within an interstate system suited perfectly the needs of capitalist entrepreneurs. The question is, what do persons whose goal is the endless accumulation of capital need in order to realize their objectives? Or, why isn’t the free market sufficient for their purposes? Could they really do better in a world in which no political authority existed at all? There are three major ways in which entrepreneurs can lose accumulated capital outside market operations. Capital can be stolen; it can be confiscated; it can be taxed. Theft in one form or another is a persistent problem. Outside the modern worldsystem, the basic defence against serious theft had always been to invest in private security systems. This was even true of the capitalist world-economy in its early days. However, there is an alternative, which is to transfer the role of providing anti-theft security to the states; generically this is called the police function. The economic advantages of shifting the security role from private to public hands is admirably laid out in Frederic Lane’s “Profits from Power”, in which he invents the term ‘protection rent’ to describe the increased profits that result from this historic shift, a benefit from which some entrepreneurs (those in

strong states) drew far greater advantage than others. For the truly rich, however, theft has historically been probably a smaller problem than confiscation. Confiscation always was a major political and economic weapon in the hands of rulers, especially of powerful rulers, in non-capitalist systems. This is why institutionalising the illegitimacy of confiscation via the establishment not only of property rights but of the ‘rule of law’ has been a necessary condition of constructing a capitalist historical system. Confiscation was a widespread means in the early days of the modern world-system, if not directly then indirectly via state bankruptcies (see the four successive ones of the Spanish Hapsburgs), and confiscation via socialization as a phenomenon of the twentieth century. Nonetheless, the remarkable thing is not how much but how little confiscation there has been. There has been no comparable level of security for capitalists in any other world-system, and this security against confiscation has actually grown with time. Even the socialization processes have been frequently effectuated ‘with compensation’ and furthermore, they have often been reversed and therefore, from a systemic point of view, have been only temporary. In any case, the pervasiveness of the rule of law has tended to make future levels of income more predictable, which allows capitalists to make more rational investments and therefore ultimately more profit. As for taxation, no one wants to be taxed, of course; but capitalists as a class have never been opposed to what they think of as reasonable taxation. From their point of view, reasonable taxation is the purchase of services from the state. As with all other purchases, capitalists prefer to pay the lowest rates available, but they do not expect to get these services for free. In addition, as we know, taxes on paper are not the same as taxes really paid. Still, it is fair to say that the rate of real taxation has grown over the centuries in the capitalist world-economy, but this is because the services have grown. It is not at all sure that it would be less costly for capitalists to assume the costs of these necessary services directly. Indeed, I would argue that relatively high rates of taxation are a plus for large capitalists, since much, even most, of the money is recycled to them in one way or another, which means that state taxation tends to be a way of shifting surplusvalue from small enterprises and the working classes to the large capitalists. Why capitalism needs the state The first and greatest service the capitalists require from the state is protection against the free market. The free market is the mortal enemy of capital accumulation. The hypothetical free market, so dear to the elucubrations of economists, one with multiple buyers and sellers, all of whom share perfect information, would of course be a capitalist disaster. Who could make any money in it? The capitalist would be reduced to the income of the hypothetical proletarian of the nineteenth century, living off what might be called ‘the iron law of profits in a free market’. We know that this is not how it works, because the real existing market is by no means free. The states have three major mechanisms that transform the economic transactions on the market. The most obvious one is legal constraint. The states can decree or forbid monopolies, or create quotas. The most utilized methods are import/export prohibitions and, even more important, patents. By relabeling such monopolies “intellectual property”, the hope is that no one will notice how incompatible this notion is with the concept of a free market, or perhaps it lets us see how incompatible the concept of property is with that of a free market. Prohibitions are important for entrepreneurs but they do seem to violate much of the rhetoric. This is why there is some political hesitation to use them too frequently. The state has other tools in the creation of monopolies that are somewhat less vis-

ible and hence, probably more important. The state can distort the market very easily. Since the market presumably favours the most efficient, the state can quite simply assume part of the cost of the entrepreneur. They assume part of the costs whenever the state subsidizes the entrepreneur in any way. The state can do this directly for a given product. Moreover, the state can do this on behalf of multiple entrepreneurs simultaneously in two ways: through providing him with an infrastructure or exempting him from paying the costs of repairing the damage they do to what is not their property (e.g. ecological pollution). Real profit, the kind that permits a serious endless accumulation of capital, is only possible with relative monopolies, i.e. for however long they last. And such monopolies are not possible without the states. Furthermore, the system of multiple states within an interstate system offers the entrepreneurs great assistance in making sure that the states restrict themselves to helping them and do not overstep their bounds and harm them. The curious interstate system permits entrepreneurs, particularly large ones, to circumvent states that become too big for their britches, by seeking the patronage of other states or using one state mechanism to curb another. This brings us to the third way in which states can prevent the free market from functioning freely. The states are major purchasers in their national markets and large states command an impressive proportion of purchases in the world market. They are frequently monopsonists, or near-monopsonists, for certain very expensive goods as nowadays for armaments or superconductors. They could, of course, use this power to lower prices for themselves as purchasers, but instead they seem to use this power to permit the producers to monopolize a roughly equal share of the market and to raise their prices scandalously. Of course, monopoly is not the only advantage capitalists obtain from the state. The other main advantage, regularly noted, is the maintenance of order. Order within the state means first of all order against insurgency by the working classes. This is more than the police function against theft; it is the state’s role in reducing the efficacy of class struggle by workers. The way this is done is by a combination of force, deception, and concessions. The liberal state is one in which the amount of force is reduced and the amount of deception and concessions increased. This concept works better, but it is not always possible, especially in peripheral zones of the world-economy, where there is too little surplus available to permit the state to allocate much of it to concessions. Even in the most liberal state, however, there are serious legal constrictions on the modes of action by the working classes and generally, these constrictions are greater, usually far greater, than those reciprocally imposed on employers. What legitimates the state Surely it is not the fairness of the distribution of the surplus value or even of the application of the laws that legitimates a state within the capitalist world-economy. If one says it is the myth that every state uses about its history, origins, or special virtues one still needs to ask why people buy into these myths. It is not self-evident that they will. And in any case we know that popular insurrections occur repeatedly, some of which even involve cultural revolutionary processes that call into question these basic myths. So, legitimacy needs explaining. The Weberian typology allows us to understand the different fashions in which people legitimate their states. What Weber calls rational-legal legitimisation is, of course, the form that liberal ideology preaches. In much of the modern world this form has come to prevail, if not all of the time, at least for a good deal of the time. But why does it prevail? I insist not only on the importance of this question but also on the fact that an answer is far from self-evident. We live in a highly unequal world. We live in a world, in which polarization is constantly increasing, and in which even the middle strata are not keeping up proportionately with the upper strata despite any and all improvements in their absolute situation. So why do so many people tolerate this situation, even embrace it? There seem to be two kinds of answers. One is relative deprivation. We may be badly off, or at least not well off enough, but others are really badly off. So let us not rock the boat, and above all let us prevent them from rocking the boat. That this kind of collective psychology plays a major role seems to me to be very widely accepted, whether one applauds it by talking of a sizeable middle class as the basis of democratic stability or deplores it by talking of a labour aristocracy having false consciousness, and whether one thinks of it as operating primarily within states or within the world-system as a whole. This explanation is a structural one. That is to say, it is an argument that a certain collective psychology derives from the very structure of the capitalist world-economy. If this aspect of the structure remains intact, that is, if we continue to have a hierarchical structure that has many positions on the ladder, then the degree of legitimisation resulting from this structure should remain constant. At the moment, the reality of a hierarchical ladder of positions does seem to have remained intact, and therefore the structural explanation cannot explain any variation in legitimisation. However, there is a very important second factor that accounts for continuing legitimisation of state structures. This factor is more conjectural and can or has indeed varied. The degree of legitimisation of the capitalist world-economy before the nineteenth century was undoubtedly quite low, and it has remained low in most of the peripheral zones right into the late

twentieth century. The continuous commodification of productive transactions seemed to bring changes, many or even most of which were negative from the point of view of the direct producers. Still, after the French Revolution, the situation began to change. It is not that the impact of commodification became less negative, at least for the large majority. It is that their restiveness took the form of insisting on sovereignty being discussed merely as a definition of authority and lawful power. One had to ask the question, who exercised this power? Who was the sovereign? If the answer was not to be the absolute monarch, what alternative was there? As we know, the new answer that began to be widely accepted was “the people.” To say that the people are sovereign is not to say anything very precisely, for one has to decide who are the people and by what means can they collectively exercise this authority. But just suggesting that there was such an entity as ‘the people’ and that they might exercise sovereign power had very radical implications for those exercising de facto authority. The result has been the great politico-cultural turmoil of the nineteenth and twentieth centuries surrounding the question of how to interpret and tame people’s exercise of its sovereignty. The story of taming the exercise of popular sovereignty is the story of liberal ideology - its invention, its triumphal ascendancy in the nineteenth century as the geoculture of the capitalist world-economy and its ability to transform the two competitor ideologies (conservatism on the one hand and radicalism/socialism on the other) into avatars of liberalism. Liberalism presented itself as a centrist doctrine. The liberals preached that progress was desirable and inevitable and could best be achieved if a process of rational reform were instituted; a process controlled by specialists, who could, on the basis of an informed analysis, implement the necessary reforms throughout the historical system, using the authority of the states as their basic political lever. Faced with the impetuous demands of the “dangerous classes” of the nineteenth century - the urban proletariat of Western Europe and North America - the liberals offered a three-pronged program of reforms: the suffrage, the beginnings of a welfare state, and a politically-integrating racist nationalism. This three-pronged program worked exceptionally well and by 1914 the original dangerous classes were no longer dangerous. Just then, however, the liberals found them confronted with a new set of “dangerous classes” - the popular forces in the rest of the world. In the twentieth century, liberals sought to apply a similar reform program at the interstate level. The self-determination of nations served as the functional equivalent of universal suffrage. The economic development of underdeveloped nations was offered as the equivalent of the national welfare state. Yet, the third prong was unavailable, because by trying to include the entire world, there was no outside group against whom one could construct an integrating, racist nationalism.

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The flaws of liberalism

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To understand why this is so devastating to the system, we have to understand what it was that liberalism had offered and why therefore it had successfully stabilized the system politically for a long while. The three-pronged program that the liberals had used to tame the dangerous classes did not offer the dangerous classes what they wanted and had initially demanded - easily enough summarized in the classic slogan of the French Revolution: liberty, equality, fraternity. If these demands had been met, there would no longer have been a capitalist world-economy, since it would have been impossible to ensure the endless accumulation of capital. What the liberals offered, therefore, was half a pie, or more exactly about one-seventh of a pie: a reasonable standard of living for a minority of the world’s population (those famed middle strata). Now this small pie was doubtless a lot more than this one-seventh had had before, but it was far less than an equal share of the pie, and it was almost nothing at all for the other six-sevenths. Giving this much did not significantly diminish the possibilities of accumulating capital for the large capitalists, but it did accomplish the political objective of pulling the plug on revolutionary ferment over the middle run. The one-seventh who benefited materially was for the most part quite grateful, all the more so when they saw the conditions of those they left behind. Liberalism offered the opiate of hope and it was swallowed whole. Moreover, it was swallowed by the leaders of the world’s anti-systemic movements, who mobilized on the promise of hope. They claimed that they would achieve the good society by revolution – but in fact meant by reform, which they as substitute specialists for those offered by the current authorities would administer once they gained control of the levers of state power. I suppose that if you are drowning and someone offers hope it is not irrational to grab hold of whatever is extended as a lifesaver. One cannot retrospectively reprimand the popular masses of the world for offering their support and their moral energy to the multiple anti-systemic movements who voiced their grievances. Those in authority, faced with voluble, vigorous, and denunciatory anti-systemic movements could react in one of two ways. If they were frightened, and they often were, they could try to cut off the heads of what they saw as vipers. But since the beasts were in fact hydra-headed, the more sophisticated defenders of the status quo realized that they needed more subtle responses. They came to see that the anti-systemic movements actually served in a perverse way the interests of the system. Mobilizing

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States in an Age of Transition

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- Chandrika Kumaratunga, Sri Lanka 1994 – Mary McAleese, Irland 1997 – - Vaira Vike-Freiberga, Latvia 1999 – - Mireya Moscoso, Panama 1999 – - Tarja Halonen, Finland 2000 – Gloria Macapagal-Arroyo, Phillippines 2001 – -

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The sovereignty of states is presently being questioned as never before. - Immanuel Wallerstein argues that this is not because of a transformation of the world-economic structures but because of a transformation - of the geoculture: the cultural framework within which the world-sys- tem operates.

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Current Female Presidents

Dictator's son wins Panama poll

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"Martin Torrijos, the son of a former dictator, won Panama's first presidential - elections since the handover of the Panama Canal and withdrawal of U.S. troops - in December 1999, electoral authorities said Sunday. Torrijos - son of the late - dictator Gen. Omar Torrijos, who ruled Panama from 1968 until his death in 1981 - was exalted, but took care to avoid the ghosts of the past in his cam- paign.[...] Despite his authoritarian rule, some have fond memories of Torrijos' - father. He was liked for his folksy style, land reform and public works, and for - signing the treaty that resulted in the handover of the formerly U.S.-run canal to Panama. Now that Panama runs the canal, its biggest challenge is how to fi- nance an expansion of the waterway to handle wider ships.[...] Campaign offi- cials said the U.S.-educated Torrijos would focus on tax and spending reform, - negotiating a free trade agreement with United States, and improving the canal." -

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Altered States

Some glorify the state, while others say that it is the last remaining en- tity of the Middle-ages, and that one can now witness the state in its decline. Yet, what are the contemporary transformations taking place - across the globe that are causing this controversy? Michael Hardt is - equipped the position to answer this question.

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The Group of 22 is a group of countries opposing the current laws on agri- -

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culture and consists of Egypt, Chile, Colombia, Mexico, Costa Rica, the -

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Mr. Hardt, there are claims that the state will disappear; others talk about the endurance of the state. What is your point of view? It is right to point out the continuing force and relevance of the nation-state. It would be a mistake, however, to assume that through the nation-state one could understand political situations or even economic regulations. While states, and the dominant states in particular, remain extremely important, there are many aspects of political regulation today that have to be also understood beyond the abilities of single states. Yet, my conclusion is not that nation-states are no longer important, but rather that the sovereignty of nationstates is now tending towards a form, in which it figures in supra-national sovereignty. And this is what Toni Negri and I call ‘Empire’: an entity that one could describe as a network-form, including the powers of nation-states, in a differential and hierarchical way along with the major capitalist corporations, supra-national institutions (like IMF and the World Bank) as well as other local, national and perhaps international powers. In other words: the concept of Empire is an effort to figure a renegotiation of the structures of national power within a new framework. Could you elaborate further on the relationship between the state and the world economy? There are two ways of approaching this. One is in the form of the tests that one has to take in school. They ask you: A is to B as C is to D. Here A to B can be thought of as the relation between national capital and the nation-state. And that’s what Marx says about the relationship of state and capital. Individual capitalists do conflict with capital, but in the long term the nation-state does guarantee the collective long-term interests of capital. Now, if there is such a thing

today as global capital that goes beyond the traditional bounds of national capital, then there is a role of some form of sovereign power beyond the nation-state. In other words, some form of sovereign power must be able to do for global capital what the nation-state was able to do for national capital. This is another way of posing the hypothesis of Empire: In so far as capital in some of its forms today does exceed national boundaries and cannot be adequately regulated by the nation-state, there has to be a larger form of sovereignty that is able to guarantee the collective interest of global capital in the same way that the nation-state guaranteed the collective interest of national capital. So, as my ABCD goes, the nation-state is to national capital as ‘Empire’ is to global capital. The idea being that, yes, of course nation states are still necessary to guarantee all kinds of interests of capital, but that the nation states on their own are not capable of effectively regulating increasingly large segments of capital, which exceed national boundaries and require a larger framework. There are some ways in which nationstates in collaboration with the global, economic institutions like the WTO and the World Bank, manage to provide the necessary regulation for global capital. That’s one way of answering the question. The other way is an answer that Saskia Sassen would probably give. That is, we should not draw a strict division between national economic functionaries and the global economic sphere – i.e. the sphere of global economic regulation – because, in many cases, the national economic bureaucracy has a kind of dual function in so far as it has to aim towards a guarantee of national capital, while simultaneously obeying the interests of global capital. And this is not exactly a choice between either the national or the global. Even at the level of the anthropology of these actual economic bureaucrats, one

can observe that many of them function in a dual role of simultaneously taking care of national and global interests. So there is a middle terrain, or say a terrain of transition between national economic regulation in the interest of national capital and global economic regulation in the interest of global capital. This is what Saskia Sassen calls denationalisation. What role does the state, first as an organisational form to gain independence and second as a framework to define the rules, play in your and Toni Negri’s conception of the ‘multitude’ – this global network of non-governmental actors that is supposed to be a counterforce to ‘Empire’? If one uses the notion of the state in a general way, say, as the possibility of the construction of society, respectively, the construction of government as such, then one could say that the concept of the multitude is a means of constructing a democratic organisation. Yet, the way I actually understand the state is in line with a certain tradition, in which the state is an apparatus that stands above society as an instrument of class domination. If one conceives the state in that way, then it is a fundamentally anti-democratic institution. And then the former concept of the state has no place in our conception of the multitude. However, it does not mean that one could not propose alliances with a group of states like the Group of 22 1 in their effort to transform the economic order. So, I do not mean categorically that “one will never participate” in any state as such. But the state, at least in our way of thinking, cannot function as a construct of democracy. Michael Hardt (1960) is Associate Professor in the Literature Program at Duke University. Together with Antonio Negri he wrote “Empire” (Harvard University Press, 2001), a book on the new political order of globalisation that has become a bestseller. “Multitude: War and Democracy in the Age of Empire” (Penguin Books, 2004) is a sequel to this publication.

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The modern state is a peculiar creature, since these states are socalled sovereign states within an interstate system. I contend that the political structures that existed in non-capitalist systems did not operate in the same way, and that they constituted qualitatively a different kind of institution. What then are the peculiarities of the modern state? First and foremost, that it claims sovereignty. Sovereignty, as it has been defined since the sixteenth century, is a claim not about the state but about the interstate system. It is a double claim, looking both inward and outward. Sovereignty of the state, inward-looking, is the assertion that within its boundaries (which therefore must necessarily be clearly defined and legitimated within the interstate system) the state may pursue whatever policies it deems wise, decree whatever laws it deems necessary, and that it may do this without any individual, group, or sub-state structure inside the state having the right to refuse to obey the laws. Sovereignty of the state, outward-looking, is the argument that no other state in the system has the right to exercise any authority, directly or indirectly, within the boundaries of the given state, since such an attempt would constitute a breach by the given state’s sovereignty. No doubt, earlier state forms also claimed authority within their realms, but ‘sovereignty’ involves in addition the mutual recognition of these claims of the states within an interstate system. That is, sovereignty in the modern world is a reciprocal concept. However, as soon as we put these claims on paper, we see immediately how far they are from a description of how the modern world really works. No modern state has ever been truly inwardly sovereign de facto, since there has always been internal resistance to its authority. Indeed, in most states this resistance has led to institutionalising legal limitations on internal sovereignty in the form, among others, of constitutional law. Nor has any state been truly sovereign on the outward, since interference by one state in the affairs of another is common currency, and because the entire corpus of international law represents a series of limitations on outward sovereignty. In any case, strong states notoriously do not reciprocate fully recognition of sovereignty to weak states. Within the framework of the capitalist world-economy, there has been a slow but steady linear increase, of the internal power of states and of the authority of institutions in the interstate system. Still, we should not exaggerate, because these structures went from a very low point on the scale to somewhere further up the scale, but at no point have they approached anything that might be called absolute power. Furthermore, at all points in time, some states (those we call strong) had greater internal and greater external power than most other states. The political system of sovereign states within an interstate system suited perfectly the needs of capitalist entrepreneurs. The question is, what do persons whose goal is the endless accumulation of capital need in order to realize their objectives? Or, why isn’t the free market sufficient for their purposes? Could they really do better in a world in which no political authority existed at all? There are three major ways in which entrepreneurs can lose accumulated capital outside market operations. Capital can be stolen; it can be confiscated; it can be taxed. Theft in one form or another is a persistent problem. Outside the modern worldsystem, the basic defence against serious theft had always been to invest in private security systems. This was even true of the capitalist world-economy in its early days. However, there is an alternative, which is to transfer the role of providing anti-theft security to the states; generically this is called the police function. The economic advantages of shifting the security role from private to public hands is admirably laid out in Frederic Lane’s “Profits from Power”, in which he invents the term ‘protection rent’ to describe the increased profits that result from this historic shift, a benefit from which some entrepreneurs (those in

strong states) drew far greater advantage than others. For the truly rich, however, theft has historically been probably a smaller problem than confiscation. Confiscation always was a major political and economic weapon in the hands of rulers, especially of powerful rulers, in non-capitalist systems. This is why institutionalising the illegitimacy of confiscation via the establishment not only of property rights but of the ‘rule of law’ has been a necessary condition of constructing a capitalist historical system. Confiscation was a widespread means in the early days of the modern world-system, if not directly then indirectly via state bankruptcies (see the four successive ones of the Spanish Hapsburgs), and confiscation via socialization as a phenomenon of the twentieth century. Nonetheless, the remarkable thing is not how much but how little confiscation there has been. There has been no comparable level of security for capitalists in any other world-system, and this security against confiscation has actually grown with time. Even the socialization processes have been frequently effectuated ‘with compensation’ and furthermore, they have often been reversed and therefore, from a systemic point of view, have been only temporary. In any case, the pervasiveness of the rule of law has tended to make future levels of income more predictable, which allows capitalists to make more rational investments and therefore ultimately more profit. As for taxation, no one wants to be taxed, of course; but capitalists as a class have never been opposed to what they think of as reasonable taxation. From their point of view, reasonable taxation is the purchase of services from the state. As with all other purchases, capitalists prefer to pay the lowest rates available, but they do not expect to get these services for free. In addition, as we know, taxes on paper are not the same as taxes really paid. Still, it is fair to say that the rate of real taxation has grown over the centuries in the capitalist world-economy, but this is because the services have grown. It is not at all sure that it would be less costly for capitalists to assume the costs of these necessary services directly. Indeed, I would argue that relatively high rates of taxation are a plus for large capitalists, since much, even most, of the money is recycled to them in one way or another, which means that state taxation tends to be a way of shifting surplusvalue from small enterprises and the working classes to the large capitalists. Why capitalism needs the state The first and greatest service the capitalists require from the state is protection against the free market. The free market is the mortal enemy of capital accumulation. The hypothetical free market, so dear to the elucubrations of economists, one with multiple buyers and sellers, all of whom share perfect information, would of course be a capitalist disaster. Who could make any money in it? The capitalist would be reduced to the income of the hypothetical proletarian of the nineteenth century, living off what might be called ‘the iron law of profits in a free market’. We know that this is not how it works, because the real existing market is by no means free. The states have three major mechanisms that transform the economic transactions on the market. The most obvious one is legal constraint. The states can decree or forbid monopolies, or create quotas. The most utilized methods are import/export prohibitions and, even more important, patents. By relabeling such monopolies “intellectual property”, the hope is that no one will notice how incompatible this notion is with the concept of a free market, or perhaps it lets us see how incompatible the concept of property is with that of a free market. Prohibitions are important for entrepreneurs but they do seem to violate much of the rhetoric. This is why there is some political hesitation to use them too frequently. The state has other tools in the creation of monopolies that are somewhat less vis-

ible and hence, probably more important. The state can distort the market very easily. Since the market presumably favours the most efficient, the state can quite simply assume part of the cost of the entrepreneur. They assume part of the costs whenever the state subsidizes the entrepreneur in any way. The state can do this directly for a given product. Moreover, the state can do this on behalf of multiple entrepreneurs simultaneously in two ways: through providing him with an infrastructure or exempting him from paying the costs of repairing the damage they do to what is not their property (e.g. ecological pollution). Real profit, the kind that permits a serious endless accumulation of capital, is only possible with relative monopolies, i.e. for however long they last. And such monopolies are not possible without the states. Furthermore, the system of multiple states within an interstate system offers the entrepreneurs great assistance in making sure that the states restrict themselves to helping them and do not overstep their bounds and harm them. The curious interstate system permits entrepreneurs, particularly large ones, to circumvent states that become too big for their britches, by seeking the patronage of other states or using one state mechanism to curb another. This brings us to the third way in which states can prevent the free market from functioning freely. The states are major purchasers in their national markets and large states command an impressive proportion of purchases in the world market. They are frequently monopsonists, or near-monopsonists, for certain very expensive goods as nowadays for armaments or superconductors. They could, of course, use this power to lower prices for themselves as purchasers, but instead they seem to use this power to permit the producers to monopolize a roughly equal share of the market and to raise their prices scandalously. Of course, monopoly is not the only advantage capitalists obtain from the state. The other main advantage, regularly noted, is the maintenance of order. Order within the state means first of all order against insurgency by the working classes. This is more than the police function against theft; it is the state’s role in reducing the efficacy of class struggle by workers. The way this is done is by a combination of force, deception, and concessions. The liberal state is one in which the amount of force is reduced and the amount of deception and concessions increased. This concept works better, but it is not always possible, especially in peripheral zones of the world-economy, where there is too little surplus available to permit the state to allocate much of it to concessions. Even in the most liberal state, however, there are serious legal constrictions on the modes of action by the working classes and generally, these constrictions are greater, usually far greater, than those reciprocally imposed on employers. What legitimates the state Surely it is not the fairness of the distribution of the surplus value or even of the application of the laws that legitimates a state within the capitalist world-economy. If one says it is the myth that every state uses about its history, origins, or special virtues one still needs to ask why people buy into these myths. It is not self-evident that they will. And in any case we know that popular insurrections occur repeatedly, some of which even involve cultural revolutionary processes that call into question these basic myths. So, legitimacy needs explaining. The Weberian typology allows us to understand the different fashions in which people legitimate their states. What Weber calls rational-legal legitimisation is, of course, the form that liberal ideology preaches. In much of the modern world this form has come to prevail, if not all of the time, at least for a good deal of the time. But why does it prevail? I insist not only on the importance of this question but also on the fact that an answer is far from self-evident. We live in a highly unequal world. We live in a world, in which polarization is constantly increasing, and in which even the middle strata are not keeping up proportionately with the upper strata despite any and all improvements in their absolute situation. So why do so many people tolerate this situation, even embrace it? There seem to be two kinds of answers. One is relative deprivation. We may be badly off, or at least not well off enough, but others are really badly off. So let us not rock the boat, and above all let us prevent them from rocking the boat. That this kind of collective psychology plays a major role seems to me to be very widely accepted, whether one applauds it by talking of a sizeable middle class as the basis of democratic stability or deplores it by talking of a labour aristocracy having false consciousness, and whether one thinks of it as operating primarily within states or within the world-system as a whole. This explanation is a structural one. That is to say, it is an argument that a certain collective psychology derives from the very structure of the capitalist world-economy. If this aspect of the structure remains intact, that is, if we continue to have a hierarchical structure that has many positions on the ladder, then the degree of legitimisation resulting from this structure should remain constant. At the moment, the reality of a hierarchical ladder of positions does seem to have remained intact, and therefore the structural explanation cannot explain any variation in legitimisation. However, there is a very important second factor that accounts for continuing legitimisation of state structures. This factor is more conjectural and can or has indeed varied. The degree of legitimisation of the capitalist world-economy before the nineteenth century was undoubtedly quite low, and it has remained low in most of the peripheral zones right into the late

twentieth century. The continuous commodification of productive transactions seemed to bring changes, many or even most of which were negative from the point of view of the direct producers. Still, after the French Revolution, the situation began to change. It is not that the impact of commodification became less negative, at least for the large majority. It is that their restiveness took the form of insisting on sovereignty being discussed merely as a definition of authority and lawful power. One had to ask the question, who exercised this power? Who was the sovereign? If the answer was not to be the absolute monarch, what alternative was there? As we know, the new answer that began to be widely accepted was “the people.” To say that the people are sovereign is not to say anything very precisely, for one has to decide who are the people and by what means can they collectively exercise this authority. But just suggesting that there was such an entity as ‘the people’ and that they might exercise sovereign power had very radical implications for those exercising de facto authority. The result has been the great politico-cultural turmoil of the nineteenth and twentieth centuries surrounding the question of how to interpret and tame people’s exercise of its sovereignty. The story of taming the exercise of popular sovereignty is the story of liberal ideology - its invention, its triumphal ascendancy in the nineteenth century as the geoculture of the capitalist world-economy and its ability to transform the two competitor ideologies (conservatism on the one hand and radicalism/socialism on the other) into avatars of liberalism. Liberalism presented itself as a centrist doctrine. The liberals preached that progress was desirable and inevitable and could best be achieved if a process of rational reform were instituted; a process controlled by specialists, who could, on the basis of an informed analysis, implement the necessary reforms throughout the historical system, using the authority of the states as their basic political lever. Faced with the impetuous demands of the “dangerous classes” of the nineteenth century - the urban proletariat of Western Europe and North America - the liberals offered a three-pronged program of reforms: the suffrage, the beginnings of a welfare state, and a politically-integrating racist nationalism. This three-pronged program worked exceptionally well and by 1914 the original dangerous classes were no longer dangerous. Just then, however, the liberals found them confronted with a new set of “dangerous classes” - the popular forces in the rest of the world. In the twentieth century, liberals sought to apply a similar reform program at the interstate level. The self-determination of nations served as the functional equivalent of universal suffrage. The economic development of underdeveloped nations was offered as the equivalent of the national welfare state. Yet, the third prong was unavailable, because by trying to include the entire world, there was no outside group against whom one could construct an integrating, racist nationalism.

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The flaws of liberalism

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To understand why this is so devastating to the system, we have to understand what it was that liberalism had offered and why therefore it had successfully stabilized the system politically for a long while. The three-pronged program that the liberals had used to tame the dangerous classes did not offer the dangerous classes what they wanted and had initially demanded - easily enough summarized in the classic slogan of the French Revolution: liberty, equality, fraternity. If these demands had been met, there would no longer have been a capitalist world-economy, since it would have been impossible to ensure the endless accumulation of capital. What the liberals offered, therefore, was half a pie, or more exactly about one-seventh of a pie: a reasonable standard of living for a minority of the world’s population (those famed middle strata). Now this small pie was doubtless a lot more than this one-seventh had had before, but it was far less than an equal share of the pie, and it was almost nothing at all for the other six-sevenths. Giving this much did not significantly diminish the possibilities of accumulating capital for the large capitalists, but it did accomplish the political objective of pulling the plug on revolutionary ferment over the middle run. The one-seventh who benefited materially was for the most part quite grateful, all the more so when they saw the conditions of those they left behind. Liberalism offered the opiate of hope and it was swallowed whole. Moreover, it was swallowed by the leaders of the world’s anti-systemic movements, who mobilized on the promise of hope. They claimed that they would achieve the good society by revolution – but in fact meant by reform, which they as substitute specialists for those offered by the current authorities would administer once they gained control of the levers of state power. I suppose that if you are drowning and someone offers hope it is not irrational to grab hold of whatever is extended as a lifesaver. One cannot retrospectively reprimand the popular masses of the world for offering their support and their moral energy to the multiple anti-systemic movements who voiced their grievances. Those in authority, faced with voluble, vigorous, and denunciatory anti-systemic movements could react in one of two ways. If they were frightened, and they often were, they could try to cut off the heads of what they saw as vipers. But since the beasts were in fact hydra-headed, the more sophisticated defenders of the status quo realized that they needed more subtle responses. They came to see that the anti-systemic movements actually served in a perverse way the interests of the system. Mobilizing

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the masses meant channelling the masses, and state power for the leaders had very conservatory effects. Furthermore, once such movements were in power, they moved themselves against the impetuous demands of their followers, and tended to do so with as much, even more, severity than their predecessors. Furthermore, the sedative of hope was even more efficacious when the peddler was a certified revolutionary leader. If the future was theirs, the popular masses reasoned that they could afford to wait a while, especially if they had a progressive state. Their children, at least, would inherit the earth. The shock of 1968 was more than momentary. The shock of 1968 was the realization that the whole geoculture of liberalism, and especially the construction of historical optimism by the anti-systemic movements, was tainted, nay fraudulent, and that their children were not scheduled to inherit the earth. Indeed, their children might be even worse off than they were. And so these popular masses began to abandon the anti-systemic movements and liberal reformism; thus, they abandoned the state structures as vehicles of their collective betterment. To abandon a well-worn path of hope is not done with lightness of heart. For, it does not follow that the six-sevenths of humanity were ready to accept quietly their fate as oppressed and unfulfilled human beings. Quite the contrary. When one abandons the accepted promises of hope one searches for other paths. The problem is that they are not so easy to find. But there is worse. The states may not have offered long-term betterment for the majority of the world population, but they did offer a certain amount of short-term security against violence. If, however, the populations no longer legitimate the states, they tend neither to obey its policemen nor to pay its tax collectors. And thereupon the states are less able to offer short-term security against violence. In this case, individuals (and firms) have to return to the ancient solution, that of providing their own security. As soon as private security becomes once again an important social ingredient, confidence in the rule of law tends to break down, and hence civil (or civic) consciousness. Closed groups emerge (or re-emerge) as the only safe haven, tending to be intolerant, violent, and inclined toward zoned purifications. As intergroup violence rises, leadership tends to become more and more Mafioso in character - Mafioso in the sense of combining muscular insistence on unquestioning intragroup obedience and venal profiteering. We see this all around us now, and we shall see much more of it in the decades to come. Hostility to the state is fashionable now, and spreading. The anti-state themes common to conservatism, liberalism, and radicalism/socialism, which had been ignored in practice for over 150 years, are now finding deep resonance in political behaviour in all camps. Should not the capitalist strata be happy? It seems doubtful that they are, for they need the state, the strong state, far more than their official rhetoric has ever admitted. No doubt they don’t want peripheral states to interfere with the transactions flows of the world-economy, and now that the anti-systemic movements are in deep trouble, the big capitalists are currently able to use the IMF and other institutions to enforce this preference. It is one thing for the Russian state not to keep out foreign investors any longer; however, it is quite another thing for the Russian state to be unable to guarantee the personal safety of the entrepreneurs who visit Moscow. In a recent issue of CEPAL Review, Juan Carlos Lerda makes a very cautious assessment of the loss of autonomy of state au-

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thorities in the face of globalization. He does however stress what he believes to be a bright side in the increased vigour of world market forces: “The globalization phenomenon effectively restricts national governments’ freedom of movement. However, the disciplining force of international competition, which underlies at least a large part of the process, may have considerable beneficial effects on the future course of public policy in the countries of the region. Thus, when talking about “loss of autonomy”, care must be taken to check whether it is not rather a matter of a welcome “reduction in the level of arbitrariness” with which public policy is sometimes applied.” 1 Here we see what one might call the official line. The market is objective and therefore “disciplining.” What it disciplines, it seems, is everyone’s perverse instincts to make social decisions on any basis other than the maximization of profits. When states make social decisions on such grounds, they are being arbitrary. But let the states try not to be “arbitrary” when important capitalist interests are at stake, and you will hear the shouting. When in 1990, major U.S. financial institutions were in danger of bankruptcy, Henry Kaufman wrote an op-ed piece in the N.Y. Times in which he said: ”Financial institutions are the holders, and therefore, the guardians of Americans’ savings and temporary funds, a unique public responsibility. Truly letting the marketplace discipline the financial system would mean acquiescing in an avalanche of potential failures....” 2 So there we have it, clearly outlined. It is welcome for the market to discipline the states when they are arbitrary, but irresponsible if the states allow the same market to discipline the banks. Social decisions to retain social welfare is irresponsible, but a social decision to save banks is not.

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riously declines, capitalism is untenable as a system. I agree that it is in decline today, for the first time in the history of the modern world-system. This is the primary sign of the acute crisis of capitalism as an historical system. The essential dilemma of capitalists, singly and as a class, is whether to take full short-run advantage of the weakening of the states, or to try short-run repair to restore the legitimacy of the state structures, or to spend their energy trying to construct an alternative system. Behind the rhetoric, intelligent defenders of the status quo are aware of this critical situation. While they are trying to get the rest of us to talk about the pseudo-issues of globalization, some of them at least are trying to figure out what a replacement system could be like, and how to move things in that direction. If we don’t want to live in the future with the inegalitarian solution that they will promote, we should be asking the same question. Let me thus resume my position. A capitalist world-economy requires a structure in which there are sovereign states linked in an interstate system. Such states play crucial roles to sustain entrepreneurs. The principal ones are the assumption of part of the costs of production, the guarantee of quasi-monopolies to increase profit ratios, and their efforts both to restrain the capacity of the working classes to defend their interests and to soften discontent by partial redistributions of surplus-value. However, this historical system, like any other, has its contradictions, and when these contradictions reach a certain point (otherwise put, when the trajectory has moved far from equilibrium), then the normal functioning of the system becomes impossible. The system reaches a point of bifurcation. There are many signs that, today, we have reached this point. Deruralization, ecological exhaustion, and democratization, each in different ways, reduce the ability to accumulate capital. So does the fact that the states are, for the first time in 500 years, declining in strength - not at all because of the rising strength of the transnational corporations as is often asserted, but because of the declining legitimacy accorded to the states by their populations, the result of having lost faith in the prospects of gradual amelioration. The state still matters - to the entrepreneurs above all. And because of the declining strength of the states, the transnationals find themselves in acute difficulty, faced as they are with a long-term profits squeeze for the first time and with states that are no longer in a position to bail them out. We have entered a time of troubles. The outcome is uncertain. We cannot be sure what kind of historical system will replace the one in which we find ourselves. What we can know with certainty is that the very peculiar system in which we live, and in which the states have played a crucial role in supporting the processes of the endless accumulation of capital, can no longer continue to function.

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A Fundamental Compact between the State and Foreign Capital

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After the crash of the New Economy and the terrorist attacks on September 11th there has been a resurgence of the state: global cities like New York as well as transnational companies have been falling back into the - territorial confines of the nation-state. Against this backdrop Andrew - Ross talks about the relationship between the state and the economy in China. -

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- RAL 3001 Red: - RAL 9010 White: RAL 5002 Blue: - RAL 6018 Green: - RAL 1021 Yellow: - RAL 5015 Skyblue: RAL 9005 Black: - RAL 6029 Mint: - RAL 2000 Yellow-orange: - RAL 4004 Violett: RAL 1016 Sulfur: - RAL 4005 Lila: - RAL 1004 Gold:

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- ---------------------------------------------------------------------------------------------------- Olivier Houmard calculated this mixture of colours from the percentage of the different colours of all flags of the world. The mixture of the ‘world colour’ is - based on assumptions and comparison. Very few countries have defined the - colours of their flag precisely. The Italian flag for example exists in at least five - different versions of green/white/red, all used at official public events.

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mestic authorities’ autonomy (by tightening the restrictions on govern- -

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in the future (such as the accumulation of large exchange rate slippages -

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which give rise to financial traumas with considerable negative effects in -

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the real sphere of the economy when devaluation inevitably occurs)”.

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national Herald Tribune, Feb. 24-25, 1990 (reprinted from N.Y.Times)

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Nation-Building

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The latest series of work by Berlin artist Bettina Allamoda displays cross-refer- ences between (post-)colonialism, fashion, art and architecture. Taking the Insti- tute du Monde Arabe that was built by the star architect Jean Nouvel as a center - for "Arabic culture" in Paris, Allamoda investigates strategies of representation, disguise and decoration: How does considering/dealing with Islam effect percep- tion? Do dresscodes and fashion of the recent past function as a form of "Nation- Building"? In search of a link between aestethics and society, Allamoda's sculp- tures, drawings and tableaus question how international tensions can be represented architecturally and visually. -

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The crisis of the state We must always keep clearly in mind not only that one man’s monopoly (or arbitrary decision) is another man’s poison, but that capitalists depend on the intervention of the states in such a multitude of ways that any true weakening of state authority is disastrous. The case we have been arguing here is that globalization is not in fact significantly affecting the ability of the states to function, nor is it the intention of large capitalists that it do so. The states are however, for the first time in 500 years, on a downward slide in terms of their sovereignty, inward and outward. This is not because of a transformation of the worldeconomic structures but because of a transformation of the geoculture, and first of all, because of the loss of hope by the popular masses in liberal reformism and its avatars on the left. Of course, the change in the geoculture is the consequence of transformations in the world-economy, primarily the fact that many of the internal contradictions of the system have reached points where it is no longer possible to make adjustments that will resolve once again the issue such that one sees a cyclical renewal of the capitalist process. These critical dilemmas of the system include among others the deruralization of the world, the reaching of limits of ecological decay, and the fiscal crises of the states brought on by the democratization of the political arena and the consequent rise in the levels of minimum demand for education and health services. The sovereignty of the states - their inward and outward sovereignty within the framework of an interstate system - is a fundamental pillar of the capitalist world-economy. If it falls, or se-

Immanuel Wallerstein (1930) did his PhD at Columbia University in 1959 and taught there until 1971. From 1955 to 1970 he mainly researched Africa’s colonial history and in 1976 he founded the “Fernand Braudel Center for the Study of Economies, Historical Systems, and Civilizations”. His many publications on the historical and sociological dimensions of the world-economy include “The End of the World As We Know It: Social Science for the Twenty-first Century” (UMP, 1999), of which we publish an abridged version of the fourth chapter. Wallerstein is currently a Senior Research Scholar at Yale University and works in three main areas: the historical development of the modern world-system; the contemporary structural crisis of the capitalist world-economy; and the transformations in the structures of knowledge.

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“With the “democratization” of nationalism... the relative simplicity of the con- cept “raison d’etat” was eroded, and the state itself came to be seen as composed - of different interests. In the era of liberal democracy, “l’état, c’est moi” was no - longer an acceptable answer to the question of sorveign legitimacy. The national interest came to reflect a weighting of various diverse interests... as different - groups within the policy competed to claim it as a legitimizing symbol for their - interests and aspirations, which might by no means be shared by many of their - compatriots.”

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States A cartographical body of work by Lordy Rodriguez Since the first days of Columbus, the US-American continent has been a space that was imprinted by land-taking, immigration and cultivation – a process still underway today. Under president Polk (1845-1849) the U.S. experienced an incredible Westward expansion, doubling in its size three times; by 1853, the United States reached the continental expansion they have today. When the Frontier of the West was officially declared closed in 1893, the United States sought for new spaces and acquired some colonies, including the Phillipines (1898), the home country of Lordy Rodriguez , whose multi-year project “States” reinvents the U.S. Based on a multitude of highly personalized decisions, Rodriguez is altering the layout of the U.S. by re-arranging the states, establishing new landforms and borders, misplacing cities. The resulting hand-drawn maps provoke a sense of “what if…?” – how would it be if Miami was the capital of Kansas, or South Carolina shared a border with Arizona? Rodriguez’s system for re-mapping the USA is governed by an extensive set of quirky rules. For example, all states have access to ports, because the artist has only lived in major port cities (Houston, New York, Baton Rouge). The West coast of Rodriguez’s America was colonized by Asia, and the East coast was colonized by Europe. This dual colonization is reflective of the artist’s own ethnic heritage (Chinese/Filipino/Spanish/French). One remarkable example is Minnesota, which Rodriguez placed on the southern part of the West coast. As the artist himself comments: “Minnesota is no longer the cold northern city that we know but now a highly populated southern state that enjoys wonderful weather and beautiful coastlines and mountains. This changes the identity of the state that we know to a highly idealized place, much like the ideal that an immigrant would imagine before coming to America.” In addition, Rodriguez has added five states to the U.S. (Territory State—which includes parts of the Philippines, Samoa, and Puerto Rico; Disney, Hollywood, The Internet, and Monopoly) to bring the total to 55, the national speed limit in America at the start of the project. Referencing the speed limit is essential, given that urban planning in America frequently revolves around car culture.

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Professor Ross, you have been living in China for a year now, what insights have you gained on the particular role the Chinese state represents within the context of the global economy? There’s no real question that China’s rulers have considerable control over the engines of the world economy. Whatever happens in the free-trade zones here affects workers in every single part of the world. If they do not provide the lowest wage floor, then the other advantages that come with the business environment make it unbeatable for the “runaway shops” (I prefer the old-fashioned term to the current euphemism of “offshore sites”), that every corporation of any size has moved here. But China is not simply the “world’s factory.” There is a determined effort now being made to move the economy up the value chain. A highly skilled workforce is emerging that will make it possible to host the most highvalue jobs here; microchip design and manufacturing, for example, is flooding into the Yangtze region. Lastly, since Shanghai is rapidly being made as Asia’s new financial centre, the urban white-collar economy has the aspiration to become “the world’s office”. All in all, then, there are few people anywhere, in almost any occupation, that can feel safe about retaining their jobs. The joke here in Shanghai is that “very soon, lawyers will be the only people left with jobs in America”. The degree to which the central government has the power and the authority to initiate and shape these developments is still enormous, at least by the standards of G-7 countries. But all of this growth has also been dependent on foreign investment. So we are talking about a fundamental compact between the state and foreign capital. It is by far the most colossal example of how capital can live and thrive under an authoritarian government, which guarantees good returns, dirt-cheap land, tax holidays, and an inexhaustible supply of inexpensive labour. How does the state fashion itself in the course of this development? The domestic projection is a delicate balancing act, and it is played out every day in the huge, and very diverse range of media that broadcasts news and opinion. Though all of that media is either produced or vetted by government authorities, people pick and choose the sources they feel are most objective. GDP growth is, of course, the central story. There is a seemingly endless production of statistics and reports on increased trade volume and foreign direct investment levels. In many ways, this information stream has become the primary raison d’être of the state. Ever since Deng Xiaoping offered a New Deal to the Chinese people in 1978 – you can have economic freedom, but not any other kind of freedom – the nominally communist state stands or falls by how well it has raised their standard of living. As long as the figures continue to rise – and for the most important sector of the population, they have risen quite dramatically –the Chinese Communist Party (CPC) will continue to enjoy popular consent. It is also important that the beneficiaries of the boom perceive that the state is addressing China’s massive problems – the economic gulf between urbanites and peasants, the human rights of migrant workers, the environmental impact of development, are being addressed. In Western countries there is currently a tendency for states to dress like a company: the president as CEO, etc. Is there a comparable trend to be observed in China? 5,000 years of imperial bureaucracy isn’t quite so easy to slough off. It’s only recently – under Jiang Zhemin’s Three Represents theory – that the state has defined itself as even capable of representing the entrepreneurial sector. In fact, there was a huge debate about the acceptance of the concept of the “red capitalist.” Despite the incursions of private capital, almost half the economy is still state-owned and state-led, and so you don’t have anything like the same cosy relationship with the boardroom mentality. In the U.S. the state is entirely almost subservient to the needs of capital, and so it is natural for businesspeople to occupy leading cabinet positions and the like. In China, there is still the perception that the state is taking advantage of corporations for the purpose of nation-building. On the other hand, it’s easy to see the pervasive reach of enterprise culture within the CPC. Just to cite one recent example, the Central History Publishing Office issued a four-volume set of business management tips based on Mao’s teachings. The books drew on Mao’s writings about philosophy, politics, and military

strategy to offer advice on managing projects, making deals, motivating employees, and business formation. So what does foster greater identification in China today – the state or companies? In my interviews with employees, I usually ask if they love China – everyone says yes automatically. Then I ask if they feel if China loves them. The responses, as you can imagine, are much more varied. Partly because of a century of humiliations at the hands of foreigners, Chinese are more nationalistic than most peoples, and the pride extends to Greater China – probably the most powerful diaspora in the world. But companies are also deeply revered. In Shanghai, where money is almost the only topic of conversation, the bookstores are chock-a-block with management and business literature. In fact, I would say that the dominant face of Western culture here is not so much music and film as business literature – everyone from teenagers on up reads the stuff. Everyone wants to be a CEO or start their own company. In your most recent book “Low Pay, High Profile” you revisit a recurring theme of your research agenda: labour issues. How would you describe the role of the common worker towards the state and the company from a comparative vantage point? Largely as a result of the anti-sweatshop movement, Westerners have an image of China as a massive sweatshop where desperate workers lack basic rights, and are routinely denied overtime and backpay. This image and the movement have had some impact. Every foreign manager will say that the embarrassing exposes of conditions have helped to change human resources practices in their companies. Indeed, you will find very few workers these days, who would not prefer to work for a European or American company that brings its own code of human resources practices with it. From there on down, the order of preference is usually Japanese, Korean, Hong Kongese, and, last of all, the Taiwanese, who are most feared for their often brutal management practices. But you don’t have to be on the payroll of a foreign company to be working for them in a sense, since their supplier chains are long, and delve deep into the local economy. It’s in the shops of contractors, especially in the most labour-intensive industries like garments and toys that the worst conditions thrive, as they do in other parts of the world. On paper, and if you leave aside the absence of the right to form independent unions, China actually has a pretty decent Labour Law. The problem is that it is simply not enforced. In fact, some of the more progressive labour scholars here argue that its provisions should be weakened so that some workplaces actually come close to meeting its criteria. Currently, few do. Most depressing of all, perhaps, is the fact that the unions that do exist in Chinese workplaces are almost universally perceived as toothless because they are a creation of the boss. As a result, the idea of a union carries no positive connotations, at least not in the experience of the mass of Chinese workers. Especially, since the Labour Federation of Unions has done so little to ease the pain of the tens of millions of workers who have been laid off from state-owned enterprises in the last decade.

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version of a socialist market economy is the most original, and certainly the largest effort to bear such a title. There is nothing, nor has there ever been anything, like it. Sceptics are likely to roll their eyes at the official position that the national economy is still in a transitional-socialist phase, and that communism is its ultimate destination. If its path of modernization has been unique, they surmise, the end result might not be so. Yet China continues to defy easy predictions. Andrew Ross (1956) is an anti-sweatshop-activist from the first hour and Professor of American Studies at New York University. He is the author of several books, including “Low Pay, High Profile: The Global Push for Fair Labour”(New Press, 2004), “No-Collar: The Humane Workplace and its Hidden Costs”(Basic Books, 2002), and “The Celebration Chronicles: Life, Liberty and the Pursuit of Property Value in Disney’s New Town” (Ballantine, 1999). He has also edited several books, including “No Sweat: Fashion, Free Trade, and the Rights of Garment Workers” (Verso, 1997), and, most recently, “Anti-Americanism” (New York University Press, 2004). Currently, he is on sabbatical in Shanghai, researching a book about highskill workers in the East China economy.

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No. 194 World

28,3 % 17,3 % 14,1 % 11,3 % 8,6 % 6,4 % 5,7 % 4,4 % 1,3 % 1,3 % 0,5 % 0,4 % 0,4 %

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Finally, if you look at China from a historical point of view – to which degree does China’ s state model differ from others? Most informed analysts will agree that China’s path of modernization has been quite unique. Even in the period of semi-colonization, when the Western powers enjoyed extraterritorial privileges in the treat ports, the patterns of industrialization differed from those in other parts of the colonized world. After liberation, when nation-building benefited from several decades of state-led industrialization and protectionism aimed at import-substitution, there was a determined effort to avoid the coastal cities and bring industry to the interior, even into the rural communes. Mao’s model of socialist development was quite distinct from the Soviet technocracy. His appetite for grassroots populism, his zeal for continuous revolution from below, and his promotion of “organic experts” arising from the ingenuity of peasant life were a stark departure from the Soviet reliance on progress as directed by avant-garde technical elites. When China finally opened up to foreign investment and trade liberalization, it did not do so because of debt-indebtedness. Unlike other developing countries, which came under the jurisdiction of the IMF and the World Bank, China has not had to do the bidding of bankers and bureaucrats representing the Washington Consensus. So, too, the CPC’s

Show your flags/Show your colours

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“The state is a territorial organization exercising legitimate control over its own territory, undisturbed by internal power competition or external intervention.”

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International or interstate relations? “Using ‘state’ and ‘nation’ interchangeably is a major obstacle [...]. Despite their convergence in the modern nation-state, any theory that claims generality beyond a world populated by such units cannot treat the two concepts as identical. This point is not easily recognized, given the common habit of referring to the national interest, international relations, and transnational relations, when the references really are to state interests, interstate relations, and transtate relations”.

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GeoSim GeoSim is an agent-based computational environment that simulates geopolitical processes. Initially developed in Pascal to support Prof. Cederman’s dissertation research (see: “Emergent Actors in World Politics”), the current version of the systems is implemented in RePast, a Java-based package. This framework has been used to explore complex issues in world politics, such as the influence of polarity configurations, the evolution of democracy in the international system, nationalist transformations, and the reconstruction of war-size and statesize distributions.

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the masses meant channelling the masses, and state power for the leaders had very conservatory effects. Furthermore, once such movements were in power, they moved themselves against the impetuous demands of their followers, and tended to do so with as much, even more, severity than their predecessors. Furthermore, the sedative of hope was even more efficacious when the peddler was a certified revolutionary leader. If the future was theirs, the popular masses reasoned that they could afford to wait a while, especially if they had a progressive state. Their children, at least, would inherit the earth. The shock of 1968 was more than momentary. The shock of 1968 was the realization that the whole geoculture of liberalism, and especially the construction of historical optimism by the anti-systemic movements, was tainted, nay fraudulent, and that their children were not scheduled to inherit the earth. Indeed, their children might be even worse off than they were. And so these popular masses began to abandon the anti-systemic movements and liberal reformism; thus, they abandoned the state structures as vehicles of their collective betterment. To abandon a well-worn path of hope is not done with lightness of heart. For, it does not follow that the six-sevenths of humanity were ready to accept quietly their fate as oppressed and unfulfilled human beings. Quite the contrary. When one abandons the accepted promises of hope one searches for other paths. The problem is that they are not so easy to find. But there is worse. The states may not have offered long-term betterment for the majority of the world population, but they did offer a certain amount of short-term security against violence. If, however, the populations no longer legitimate the states, they tend neither to obey its policemen nor to pay its tax collectors. And thereupon the states are less able to offer short-term security against violence. In this case, individuals (and firms) have to return to the ancient solution, that of providing their own security. As soon as private security becomes once again an important social ingredient, confidence in the rule of law tends to break down, and hence civil (or civic) consciousness. Closed groups emerge (or re-emerge) as the only safe haven, tending to be intolerant, violent, and inclined toward zoned purifications. As intergroup violence rises, leadership tends to become more and more Mafioso in character - Mafioso in the sense of combining muscular insistence on unquestioning intragroup obedience and venal profiteering. We see this all around us now, and we shall see much more of it in the decades to come. Hostility to the state is fashionable now, and spreading. The anti-state themes common to conservatism, liberalism, and radicalism/socialism, which had been ignored in practice for over 150 years, are now finding deep resonance in political behaviour in all camps. Should not the capitalist strata be happy? It seems doubtful that they are, for they need the state, the strong state, far more than their official rhetoric has ever admitted. No doubt they don’t want peripheral states to interfere with the transactions flows of the world-economy, and now that the anti-systemic movements are in deep trouble, the big capitalists are currently able to use the IMF and other institutions to enforce this preference. It is one thing for the Russian state not to keep out foreign investors any longer; however, it is quite another thing for the Russian state to be unable to guarantee the personal safety of the entrepreneurs who visit Moscow. In a recent issue of CEPAL Review, Juan Carlos Lerda makes a very cautious assessment of the loss of autonomy of state au-

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thorities in the face of globalization. He does however stress what he believes to be a bright side in the increased vigour of world market forces: “The globalization phenomenon effectively restricts national governments’ freedom of movement. However, the disciplining force of international competition, which underlies at least a large part of the process, may have considerable beneficial effects on the future course of public policy in the countries of the region. Thus, when talking about “loss of autonomy”, care must be taken to check whether it is not rather a matter of a welcome “reduction in the level of arbitrariness” with which public policy is sometimes applied.” 1 Here we see what one might call the official line. The market is objective and therefore “disciplining.” What it disciplines, it seems, is everyone’s perverse instincts to make social decisions on any basis other than the maximization of profits. When states make social decisions on such grounds, they are being arbitrary. But let the states try not to be “arbitrary” when important capitalist interests are at stake, and you will hear the shouting. When in 1990, major U.S. financial institutions were in danger of bankruptcy, Henry Kaufman wrote an op-ed piece in the N.Y. Times in which he said: ”Financial institutions are the holders, and therefore, the guardians of Americans’ savings and temporary funds, a unique public responsibility. Truly letting the marketplace discipline the financial system would mean acquiescing in an avalanche of potential failures....” 2 So there we have it, clearly outlined. It is welcome for the market to discipline the states when they are arbitrary, but irresponsible if the states allow the same market to discipline the banks. Social decisions to retain social welfare is irresponsible, but a social decision to save banks is not.

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riously declines, capitalism is untenable as a system. I agree that it is in decline today, for the first time in the history of the modern world-system. This is the primary sign of the acute crisis of capitalism as an historical system. The essential dilemma of capitalists, singly and as a class, is whether to take full short-run advantage of the weakening of the states, or to try short-run repair to restore the legitimacy of the state structures, or to spend their energy trying to construct an alternative system. Behind the rhetoric, intelligent defenders of the status quo are aware of this critical situation. While they are trying to get the rest of us to talk about the pseudo-issues of globalization, some of them at least are trying to figure out what a replacement system could be like, and how to move things in that direction. If we don’t want to live in the future with the inegalitarian solution that they will promote, we should be asking the same question. Let me thus resume my position. A capitalist world-economy requires a structure in which there are sovereign states linked in an interstate system. Such states play crucial roles to sustain entrepreneurs. The principal ones are the assumption of part of the costs of production, the guarantee of quasi-monopolies to increase profit ratios, and their efforts both to restrain the capacity of the working classes to defend their interests and to soften discontent by partial redistributions of surplus-value. However, this historical system, like any other, has its contradictions, and when these contradictions reach a certain point (otherwise put, when the trajectory has moved far from equilibrium), then the normal functioning of the system becomes impossible. The system reaches a point of bifurcation. There are many signs that, today, we have reached this point. Deruralization, ecological exhaustion, and democratization, each in different ways, reduce the ability to accumulate capital. So does the fact that the states are, for the first time in 500 years, declining in strength - not at all because of the rising strength of the transnational corporations as is often asserted, but because of the declining legitimacy accorded to the states by their populations, the result of having lost faith in the prospects of gradual amelioration. The state still matters - to the entrepreneurs above all. And because of the declining strength of the states, the transnationals find themselves in acute difficulty, faced as they are with a long-term profits squeeze for the first time and with states that are no longer in a position to bail them out. We have entered a time of troubles. The outcome is uncertain. We cannot be sure what kind of historical system will replace the one in which we find ourselves. What we can know with certainty is that the very peculiar system in which we live, and in which the states have played a crucial role in supporting the processes of the endless accumulation of capital, can no longer continue to function.

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After the crash of the New Economy and the terrorist attacks on September 11th there has been a resurgence of the state: global cities like New York as well as transnational companies have been falling back into the - territorial confines of the nation-state. Against this backdrop Andrew - Ross talks about the relationship between the state and the economy in China. -

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- RAL 3001 Red: - RAL 9010 White: RAL 5002 Blue: - RAL 6018 Green: - RAL 1021 Yellow: - RAL 5015 Skyblue: RAL 9005 Black: - RAL 6029 Mint: - RAL 2000 Yellow-orange: - RAL 4004 Violett: RAL 1016 Sulfur: - RAL 4005 Lila: - RAL 1004 Gold:

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- ---------------------------------------------------------------------------------------------------- Olivier Houmard calculated this mixture of colours from the percentage of the different colours of all flags of the world. The mixture of the ‘world colour’ is - based on assumptions and comparison. Very few countries have defined the - colours of their flag precisely. The Italian flag for example exists in at least five - different versions of green/white/red, all used at official public events.

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Juan Carlos Lerda, “Globalization and the Loss of Autonomy by the Fiscal, -

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Banking and Monetary Authorities,” CEPAL Review, No. 58, April 1996, 76- -

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77. The text goes on: “It is worth asking, for example, whether the interna- -

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tional financial markets’ growing intolerance - of arbitrary manipulation -

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of the exchange rate, or of sustained high public deficits - really affects do- -

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mestic authorities’ autonomy (by tightening the restrictions on govern- -

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ments) or if it is not rather a force for good which will prevent greater evils -

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in the future (such as the accumulation of large exchange rate slippages -

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the real sphere of the economy when devaluation inevitably occurs)”.

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Henry Kaufman, “After Drexel, Wall Street is Headed for Darker Days,” Inter- -

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The latest series of work by Berlin artist Bettina Allamoda displays cross-refer- ences between (post-)colonialism, fashion, art and architecture. Taking the Insti- tute du Monde Arabe that was built by the star architect Jean Nouvel as a center - for "Arabic culture" in Paris, Allamoda investigates strategies of representation, disguise and decoration: How does considering/dealing with Islam effect percep- tion? Do dresscodes and fashion of the recent past function as a form of "Nation- Building"? In search of a link between aestethics and society, Allamoda's sculp- tures, drawings and tableaus question how international tensions can be represented architecturally and visually. -

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The crisis of the state We must always keep clearly in mind not only that one man’s monopoly (or arbitrary decision) is another man’s poison, but that capitalists depend on the intervention of the states in such a multitude of ways that any true weakening of state authority is disastrous. The case we have been arguing here is that globalization is not in fact significantly affecting the ability of the states to function, nor is it the intention of large capitalists that it do so. The states are however, for the first time in 500 years, on a downward slide in terms of their sovereignty, inward and outward. This is not because of a transformation of the worldeconomic structures but because of a transformation of the geoculture, and first of all, because of the loss of hope by the popular masses in liberal reformism and its avatars on the left. Of course, the change in the geoculture is the consequence of transformations in the world-economy, primarily the fact that many of the internal contradictions of the system have reached points where it is no longer possible to make adjustments that will resolve once again the issue such that one sees a cyclical renewal of the capitalist process. These critical dilemmas of the system include among others the deruralization of the world, the reaching of limits of ecological decay, and the fiscal crises of the states brought on by the democratization of the political arena and the consequent rise in the levels of minimum demand for education and health services. The sovereignty of the states - their inward and outward sovereignty within the framework of an interstate system - is a fundamental pillar of the capitalist world-economy. If it falls, or se-

Immanuel Wallerstein (1930) did his PhD at Columbia University in 1959 and taught there until 1971. From 1955 to 1970 he mainly researched Africa’s colonial history and in 1976 he founded the “Fernand Braudel Center for the Study of Economies, Historical Systems, and Civilizations”. His many publications on the historical and sociological dimensions of the world-economy include “The End of the World As We Know It: Social Science for the Twenty-first Century” (UMP, 1999), of which we publish an abridged version of the fourth chapter. Wallerstein is currently a Senior Research Scholar at Yale University and works in three main areas: the historical development of the modern world-system; the contemporary structural crisis of the capitalist world-economy; and the transformations in the structures of knowledge.

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“With the “democratization” of nationalism... the relative simplicity of the con- cept “raison d’etat” was eroded, and the state itself came to be seen as composed - of different interests. In the era of liberal democracy, “l’état, c’est moi” was no - longer an acceptable answer to the question of sorveign legitimacy. The national interest came to reflect a weighting of various diverse interests... as different - groups within the policy competed to claim it as a legitimizing symbol for their - interests and aspirations, which might by no means be shared by many of their - compatriots.”

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States A cartographical body of work by Lordy Rodriguez Since the first days of Columbus, the US-American continent has been a space that was imprinted by land-taking, immigration and cultivation – a process still underway today. Under president Polk (1845-1849) the U.S. experienced an incredible Westward expansion, doubling in its size three times; by 1853, the United States reached the continental expansion they have today. When the Frontier of the West was officially declared closed in 1893, the United States sought for new spaces and acquired some colonies, including the Phillipines (1898), the home country of Lordy Rodriguez , whose multi-year project “States” reinvents the U.S. Based on a multitude of highly personalized decisions, Rodriguez is altering the layout of the U.S. by re-arranging the states, establishing new landforms and borders, misplacing cities. The resulting hand-drawn maps provoke a sense of “what if…?” – how would it be if Miami was the capital of Kansas, or South Carolina shared a border with Arizona? Rodriguez’s system for re-mapping the USA is governed by an extensive set of quirky rules. For example, all states have access to ports, because the artist has only lived in major port cities (Houston, New York, Baton Rouge). The West coast of Rodriguez’s America was colonized by Asia, and the East coast was colonized by Europe. This dual colonization is reflective of the artist’s own ethnic heritage (Chinese/Filipino/Spanish/French). One remarkable example is Minnesota, which Rodriguez placed on the southern part of the West coast. As the artist himself comments: “Minnesota is no longer the cold northern city that we know but now a highly populated southern state that enjoys wonderful weather and beautiful coastlines and mountains. This changes the identity of the state that we know to a highly idealized place, much like the ideal that an immigrant would imagine before coming to America.” In addition, Rodriguez has added five states to the U.S. (Territory State—which includes parts of the Philippines, Samoa, and Puerto Rico; Disney, Hollywood, The Internet, and Monopoly) to bring the total to 55, the national speed limit in America at the start of the project. Referencing the speed limit is essential, given that urban planning in America frequently revolves around car culture.

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Professor Ross, you have been living in China for a year now, what insights have you gained on the particular role the Chinese state represents within the context of the global economy? There’s no real question that China’s rulers have considerable control over the engines of the world economy. Whatever happens in the free-trade zones here affects workers in every single part of the world. If they do not provide the lowest wage floor, then the other advantages that come with the business environment make it unbeatable for the “runaway shops” (I prefer the old-fashioned term to the current euphemism of “offshore sites”), that every corporation of any size has moved here. But China is not simply the “world’s factory.” There is a determined effort now being made to move the economy up the value chain. A highly skilled workforce is emerging that will make it possible to host the most highvalue jobs here; microchip design and manufacturing, for example, is flooding into the Yangtze region. Lastly, since Shanghai is rapidly being made as Asia’s new financial centre, the urban white-collar economy has the aspiration to become “the world’s office”. All in all, then, there are few people anywhere, in almost any occupation, that can feel safe about retaining their jobs. The joke here in Shanghai is that “very soon, lawyers will be the only people left with jobs in America”. The degree to which the central government has the power and the authority to initiate and shape these developments is still enormous, at least by the standards of G-7 countries. But all of this growth has also been dependent on foreign investment. So we are talking about a fundamental compact between the state and foreign capital. It is by far the most colossal example of how capital can live and thrive under an authoritarian government, which guarantees good returns, dirt-cheap land, tax holidays, and an inexhaustible supply of inexpensive labour. How does the state fashion itself in the course of this development? The domestic projection is a delicate balancing act, and it is played out every day in the huge, and very diverse range of media that broadcasts news and opinion. Though all of that media is either produced or vetted by government authorities, people pick and choose the sources they feel are most objective. GDP growth is, of course, the central story. There is a seemingly endless production of statistics and reports on increased trade volume and foreign direct investment levels. In many ways, this information stream has become the primary raison d’être of the state. Ever since Deng Xiaoping offered a New Deal to the Chinese people in 1978 – you can have economic freedom, but not any other kind of freedom – the nominally communist state stands or falls by how well it has raised their standard of living. As long as the figures continue to rise – and for the most important sector of the population, they have risen quite dramatically –the Chinese Communist Party (CPC) will continue to enjoy popular consent. It is also important that the beneficiaries of the boom perceive that the state is addressing China’s massive problems – the economic gulf between urbanites and peasants, the human rights of migrant workers, the environmental impact of development, are being addressed. In Western countries there is currently a tendency for states to dress like a company: the president as CEO, etc. Is there a comparable trend to be observed in China? 5,000 years of imperial bureaucracy isn’t quite so easy to slough off. It’s only recently – under Jiang Zhemin’s Three Represents theory – that the state has defined itself as even capable of representing the entrepreneurial sector. In fact, there was a huge debate about the acceptance of the concept of the “red capitalist.” Despite the incursions of private capital, almost half the economy is still state-owned and state-led, and so you don’t have anything like the same cosy relationship with the boardroom mentality. In the U.S. the state is entirely almost subservient to the needs of capital, and so it is natural for businesspeople to occupy leading cabinet positions and the like. In China, there is still the perception that the state is taking advantage of corporations for the purpose of nation-building. On the other hand, it’s easy to see the pervasive reach of enterprise culture within the CPC. Just to cite one recent example, the Central History Publishing Office issued a four-volume set of business management tips based on Mao’s teachings. The books drew on Mao’s writings about philosophy, politics, and military

strategy to offer advice on managing projects, making deals, motivating employees, and business formation. So what does foster greater identification in China today – the state or companies? In my interviews with employees, I usually ask if they love China – everyone says yes automatically. Then I ask if they feel if China loves them. The responses, as you can imagine, are much more varied. Partly because of a century of humiliations at the hands of foreigners, Chinese are more nationalistic than most peoples, and the pride extends to Greater China – probably the most powerful diaspora in the world. But companies are also deeply revered. In Shanghai, where money is almost the only topic of conversation, the bookstores are chock-a-block with management and business literature. In fact, I would say that the dominant face of Western culture here is not so much music and film as business literature – everyone from teenagers on up reads the stuff. Everyone wants to be a CEO or start their own company. In your most recent book “Low Pay, High Profile” you revisit a recurring theme of your research agenda: labour issues. How would you describe the role of the common worker towards the state and the company from a comparative vantage point? Largely as a result of the anti-sweatshop movement, Westerners have an image of China as a massive sweatshop where desperate workers lack basic rights, and are routinely denied overtime and backpay. This image and the movement have had some impact. Every foreign manager will say that the embarrassing exposes of conditions have helped to change human resources practices in their companies. Indeed, you will find very few workers these days, who would not prefer to work for a European or American company that brings its own code of human resources practices with it. From there on down, the order of preference is usually Japanese, Korean, Hong Kongese, and, last of all, the Taiwanese, who are most feared for their often brutal management practices. But you don’t have to be on the payroll of a foreign company to be working for them in a sense, since their supplier chains are long, and delve deep into the local economy. It’s in the shops of contractors, especially in the most labour-intensive industries like garments and toys that the worst conditions thrive, as they do in other parts of the world. On paper, and if you leave aside the absence of the right to form independent unions, China actually has a pretty decent Labour Law. The problem is that it is simply not enforced. In fact, some of the more progressive labour scholars here argue that its provisions should be weakened so that some workplaces actually come close to meeting its criteria. Currently, few do. Most depressing of all, perhaps, is the fact that the unions that do exist in Chinese workplaces are almost universally perceived as toothless because they are a creation of the boss. As a result, the idea of a union carries no positive connotations, at least not in the experience of the mass of Chinese workers. Especially, since the Labour Federation of Unions has done so little to ease the pain of the tens of millions of workers who have been laid off from state-owned enterprises in the last decade.

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version of a socialist market economy is the most original, and certainly the largest effort to bear such a title. There is nothing, nor has there ever been anything, like it. Sceptics are likely to roll their eyes at the official position that the national economy is still in a transitional-socialist phase, and that communism is its ultimate destination. If its path of modernization has been unique, they surmise, the end result might not be so. Yet China continues to defy easy predictions. Andrew Ross (1956) is an anti-sweatshop-activist from the first hour and Professor of American Studies at New York University. He is the author of several books, including “Low Pay, High Profile: The Global Push for Fair Labour”(New Press, 2004), “No-Collar: The Humane Workplace and its Hidden Costs”(Basic Books, 2002), and “The Celebration Chronicles: Life, Liberty and the Pursuit of Property Value in Disney’s New Town” (Ballantine, 1999). He has also edited several books, including “No Sweat: Fashion, Free Trade, and the Rights of Garment Workers” (Verso, 1997), and, most recently, “Anti-Americanism” (New York University Press, 2004). Currently, he is on sabbatical in Shanghai, researching a book about highskill workers in the East China economy.

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No. 194 World

28,3 % 17,3 % 14,1 % 11,3 % 8,6 % 6,4 % 5,7 % 4,4 % 1,3 % 1,3 % 0,5 % 0,4 % 0,4 %

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Finally, if you look at China from a historical point of view – to which degree does China’ s state model differ from others? Most informed analysts will agree that China’s path of modernization has been quite unique. Even in the period of semi-colonization, when the Western powers enjoyed extraterritorial privileges in the treat ports, the patterns of industrialization differed from those in other parts of the colonized world. After liberation, when nation-building benefited from several decades of state-led industrialization and protectionism aimed at import-substitution, there was a determined effort to avoid the coastal cities and bring industry to the interior, even into the rural communes. Mao’s model of socialist development was quite distinct from the Soviet technocracy. His appetite for grassroots populism, his zeal for continuous revolution from below, and his promotion of “organic experts” arising from the ingenuity of peasant life were a stark departure from the Soviet reliance on progress as directed by avant-garde technical elites. When China finally opened up to foreign investment and trade liberalization, it did not do so because of debt-indebtedness. Unlike other developing countries, which came under the jurisdiction of the IMF and the World Bank, China has not had to do the bidding of bankers and bureaucrats representing the Washington Consensus. So, too, the CPC’s

Show your flags/Show your colours

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“The state is a territorial organization exercising legitimate control over its own territory, undisturbed by internal power competition or external intervention.”

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International or interstate relations? “Using ‘state’ and ‘nation’ interchangeably is a major obstacle [...]. Despite their convergence in the modern nation-state, any theory that claims generality beyond a world populated by such units cannot treat the two concepts as identical. This point is not easily recognized, given the common habit of referring to the national interest, international relations, and transnational relations, when the references really are to state interests, interstate relations, and transtate relations”.

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GeoSim GeoSim is an agent-based computational environment that simulates geopolitical processes. Initially developed in Pascal to support Prof. Cederman’s dissertation research (see: “Emergent Actors in World Politics”), the current version of the systems is implemented in RePast, a Java-based package. This framework has been used to explore complex issues in world politics, such as the influence of polarity configurations, the evolution of democracy in the international system, nationalist transformations, and the reconstruction of war-size and statesize distributions.

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Michael Hermann (1971) and Heiri Leuthold (1967) - work as social geographers in Zurich. After completing their studies in geography and eco- nomics in 1999, they began to work at the Geographical Institute of the University of Zurich as scientists and lecturers. Their research group sotomo (www.sotom.geo.unizh.ch) deals with persistence and changes of regional mentality as well as value structures under - the influence of globalisation. In their current work they use the methods of computer based - cartography for the representation of political value systems and conflicts. The maps presented here are taken from the “Atlas of Political Landscaspes” (“Atlas der Politischen Landschaften”, 2003), which shows Switzerland from a new, unexpected perspective. Cities, re- gions and cantons are not arranged according to geographical criteria, but placed like - islands within a political matrix. The basis for this representation are 190 public polls which have taken place in Switzerland between 1982 and 2002 and which provide insight into values, attitudes and expectations. On this basis statistical analysis was deployed to cal- culate the political profile of all 2900 communities of the country. This allowed for a three- dimensional representation: GIS and computer based cartography provided the topographical landscape and a visible output of an invisible phenomenon. The map presented here shows two out of three dimensions of the political space of Switzerland. - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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- “Committed Swiss citizens emphasize in public appearances the “value of independence, of freedom, of people’s sovereignty (as supreme law of self-determi- nation for citizens), of peace, of an armed, universal neutrality, of the abdica- tion of power and size, of the sense for Switzerland as home, of the individual - way and of the other political values”. In doing so, they actually express their resentment about the loss of these highly held values. What feeds the outcry is an anxiety about loosing the innate national and - cultural identity as a consequence of the globalization process, and hence be- coming an insignificant part of a global culture. The national and political walling-off by Switzerland towards the European Union and other internation- al federations that aim at a united Europe demonstrate Switzerland’s position - to the endeavours of globalization. Due to the protests of Swiss citizens, contradictions emerge for the national political elites of conservative as well as of left-winged origin: on the one hand, - the political elite strives for progressiveness, international networking and cos- mopolitanism, because it advances the level of prosperity; on the other hand, the - nation-state depends for its legitimisation on the citizen to resort to it as a primary frame of identification. In Switzerland it is impossible on the one hand to draw the line between - state policy (administration of power and self-determination) and on the other - hand cosmopolitan culture, its conditions and a global economy with its foundations. The external economic orientation of Swiss enterprises and the in- evitability of globalization will unavoidably lead to an alteration of cultural - identity”.

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The Special Economic Zones (SEZs) in China do not simply mirror the country’s transformation from a loose quasi-feudal imperial system (that persisted until 1911) into a modern nation-state. Rather they are themselves to be understood as enclaves strictly accountable to the central government in Beijing, which also catalyse this epochal process – as Arthur Kroeber argues in the following interview.

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Mr. Kroeber, since the 1990’s boomtowns such as Shenzhen have caught global media attention. Could you sketch a brief history of the SEZs in China? China created four SEZs in 1980: Shenzhen, Zhuhai and Shantou in Guangdong province, and Xiamen in Fujian province (near Taiwan). Later in the 1980s Hainan Island, formerly a part of Guangdong province, was granted provincial status and became a SEZ in its entirety. The original purpose of the SEZs was to attract foreign capital for export-oriented industries and to act as laboratories of economic reform measures. Shenzhen was chosen because of its proximity to Hong Kong; Zhuhai, because it was close to Macao; Shantou, because many overseas Chinese business-houses in Southeast Asia have their family roots there; and Xiamen, because of its closeness to Taiwan, another potential source of capital. Of the five SEZs only one, Shenzhen, has completely fulfilled its function. Zhuhai, on the opposite side of the Pearl River from Shenzhen, has suffered from a lack of transportation links to Hong Kong and to the back-country and has not really taken off. Hainan first became a capital of smuggling, then one of risky realestate speculation that led to a property-market crash in 1995. Since then its economy has not really recovered. Shantou, similarly, was a major smuggling centre and its trade economy was essentially destroyed by a major smuggling crackdown in 1998-99. Xiamen, despite a similar smuggling scandal, has emerged as a modestly prosperous city with a strong record for environmental protection. Yet its exports, foreign investments as well as other links to the global economy, are negligible. Most Taiwanese investment has skipped Xiamen, which has poor transport links to the rest of China, and has gone instead to Shenzhen, Dongguan and more recently the Yangtze River Delta region around Shanghai. Shenzhen, however, has emerged as a major export powerhouse. It is the wealthiest city in China on a per capita basis (with a per capita income of nearly US$ 5000), and exports more than any other Chinese city except Shanghai. It has executed a successful transition from manufacturing mostly low-end consumer goods such as garments and toys to becoming a major centre of high-tech assembly equipment. This is mainly because of the creation of dense supplier networks, which can adapt to rapid product cycles in consumer electronics, and just as importantly because of its proximity to the highly efficient port of Hong Kong that enables Shenzhen, unlike most Chinese cities, to be an integral part of the global supply chain. Shenzhen and neighbouring towns are now home to two of the top three Chinese telecommunications equipment companies, three of the top four Chinese television companies, as well as a host of smaller companies involved in the production of large volumes of electronic appliances for the world market. What are the means by which the SEZs in China are provided with an extra-territorial status? The extra-territorial status of the SEZs is by no means as pronounced as the extra-territoriality of the former “treatyports” in pre-revolutionary China, where foreigners controlled enclaves, in which Chinese law did not apply. When the SEZs were founded they were granted lower tax rates, somewhat relaxed provisions for the importation of capital goods and for export processing, and some leeway in setting their own commercial and economic regulations, subject (as noted below) to supervision by the central government. Also, the entry by the Chinese from the rest of the country was restricted; a special permit was normally required. However, over the past 15 years the tax, tariff and trade privileges initially granted only to the SEZs have been ex-

Guangdong province

tended to a large number of “open cities” originally in the eastern coastal provinces and now in inland provinces as well. So the SEZs do not now differ significantly from other Chinese cities in terms of their business climate. Restrictions on labour movement have also been significantly relaxed and it is possible for factory workers in search of work to enter fairly easily the SEZs. So the SEZs do not really function any more as a distinguishable class of jurisdiction, but simply as more or less economically successful cities. Could you dwell upon the dominant lifestyle models in the Chinese SEZs? Taking Shenzhen as the main case, there are roughly three major lifestyles. First, the expatriate lifestyle of foreign company managers and professionals, who tend to live in secluded communities that replicate as much as possible the conditions of life in Western countries. The housing development inhabited by the Western oil company employees, for example, is almost exactly like an American suburb, and many of its residents have never been anywhere else in China. Many of the housewives in fact do their grocery shopping in Hong Kong, travelling by ferry between their development and downtown Hong Kong. Second is the local managerial lifestyle that is enjoyed by the Chinese white-collar work force, which is very large and thriving. These people have some of the highest salaries in China and live in fairly modern apartment or villa complexes (all of Shenzhen has been built within the last 20 years so the housing is all quite new and modern). Increasingly, they own cars and go on foreign trips as frequently as once or twice a year. Because such positions also exist in more culturally interesting cities such as Shanghai and Beijing, companies usually need to pay very high salaries and give generous benefits in order to attract local managers to Shenzhen. The factory worker lifestyle probably applies to the majority of Shenzhen residents. These people might earn between 100 and 200 US$ per month and generally live in dormitories provided by the factories. They are usually quite young, in their teens to mid twenties, and are disproportionately female. In most cases they have left families behind in the interior of China. Most of their days are spent either working or resting, since their objective is to save up as much money as they can and then go back to their village, where they would marry and perhaps start a small business. They spend very little of their money but rather either put it into their own savings or send a portion back to family members. Their only relief comes during the Chinese lunar new year in January-February, when they return to their villages for two to four weeks. In the better class of factories their life is tedious but quite bearable, and it is likely that after two to four years they will have saved up enough money to marry and go into business in their hometown. The middle-tolower class of factories have conditions which are more brutal. The workers may run the risk of injury and the discipline can be very harsh. In some cases they are forced to work many hours of overtime and are not paid extra. They even may be locked into their dormitories when they are not working and their wages may be paid late. You once compared Dongguan to industrial Manchester. Do you also think that the society emerging within the SEZs is on a comparable level to the societies of 19th century Europe? Strictly speaking the SEZs actually offer conditions that are on the whole better than those of 19th century European or American industrial towns. Because of the very high reliance on foreign investment, SEZs are predominantly a domicile for international firms with relatively high stan-

dards. European and American firms in particular are subject to intense media and shareholder scrutiny at home, and need to ensure that their facilities in China comply, at least to some extent, with international norms. The relatively high costs of SEZs also means that domestic firms operating within their borders are relatively sophisticated and not the low-end manufacturers trying to shave pennies from their labour costs. However, it is in the “spill over” cities such as Dongguan – which are not SEZs but develop economically because of their proximity to SEZs – where conditions are the worst. Here you find locally owned companies, or contract manufacturers controlled by Korean or Taiwanese investors, who are essentially immune to poorly-enforced local labour laws and do not face a very high level of scrutiny or accountability in their home markets. Consequently, the working conditions tend to be far worse there, with high rates of industrial accidents. Making allowances for difference in time and place, these factories are in many respects comparable to 19th century European and American factories. A key difference is that the industrial development of both Europe and America – as well as of Japan, Korea and Taiwan in more recent years – was largely controlled by domestic firms, even when (as in America) much of the financing came from abroad. In China, foreign firms control much of the industrial development process, particularly in the area of manufactured goods for export. Foreign firms accounted for less than 10 percent of all investment in China in 2003, yet produced 52 percent of all exports by value. The percentage of Chinese exports produced by foreign firms has steadily risen over the past decade. This foreign export presence is heavily concentrated in a handful of coastal cities such as Shenzhen and Shanghai. In the interior of the country there is a domestically oriented economy that relies mainly on domestic investment and is not well linked to the export economy. If you look at the myths being dispersed about the SEZs in China, do you see any parallels to the mythologies that have been constructed in correlation to an emergent nation-state? If yes, do you see parallels to the nation-state foundations in the 19th or to those in the 20th century? On the contrary, I think the chief myths about the SEZs – and about China’s industrial economy in general – are part of a narrative about globalisation and not about the emerging nation-state. According to this myth, SEZs are deracinated regions where a state selectively cedes much of its sovereignty to multinational corporations in exchange for various economic benefits – foreign exchange earnings, employment, technology transfer and so on. Conversely, SEZs and Chinese industrial areas are seen abroad as vortices that suck manufacturing employment away from high-wage developed countries to low-wage developing ones. This process is often described as a “race to the bottom”, whose driving forces are once again multinational corporations and their agents in both developed and developing-country governments. The SEZ is thus part of a myth about the destruction of (or at any rate, attack on) national sovereignty by transnational corporations. This creates an interesting tension in Chinese society, which is undergoing a long secular transformation from a feudal empire to a modern nation-state. Much government policy, both economic and political, is explicable only in terms of state-building. Yet, at the same time one of the most powerful engines of its economic growth – the very economic growth that is indispensable to state-building – is driven by forces that are arguably inimical, or at least indifferent to the concept of the nation-state. This is a situation unique in the history of the industrial world. Even in recent cases such as Japan, Korea and Taiwan, industrialisation and economic development were linked to nation-state building in a more or less one-to-one correspondence.

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- “As the song goes: “Diamonds may be a girl’s best friend”. But for the Botswana - economy total reliance on this profitable gem is considered unwise by government planners and economists. The emphasis now is to expand the country’s industrial base, which if successful would mean less reliance on imports from - neighbouring South Africa, the regional powerhouse.

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- Some foreign investment is coming from companies that see the advantage of - Botswana’s centralised location in the African subcontinent. The information company MGX plans to use its Botswana subsidiary cdp Africa to launch products and services throughout the region. - Another success can be found in the services sector. After three years of operations in the country, the South African insurance giant Metropolitan Life has gained a 22 percent market share in Botswana.” - Misanet.com/IPS, 22.03.2002

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Arthur Kroeber (1962) first visited China in 1985 and has worked there as a journalist and analyst since 1991. From 1996 to 1999 he was based in Guangzhou and made frequent trips to all of China’s Special Economic Zones, and has continued visiting Shenzhen and other cities of the Pearl River Delta every year since then. Since 2002 he has been managing editor of China Economic Quarterly (www.theceq.info), a newsletter on China’s economy and business environment. His articles have appeared in many publications including The Economist, The Far Eastern Economic Review, and Wired magazine. He is a frequent contributor to the opinion page of the Financial Times.

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Beginning from 1991 profound changes took place in the region. First of all they - were related to abolition of the Kaliningrad region status. Formerly it used to - be the closed area for foreigners where major formations of Russian army and - Navy dislocated. This event stimulated economic activity in the region, made it attractive to foreign investments. In January 1996 the region was declared the - area of the Special Economic Zone. The citizens of Kaliningrad reconstructed - their city and their region with their own effort. They built it on the ruins anew. - Today the Kaliningrad region has become not only economically self-sufficient but it represents Russia worthily in the European Community. - www.gov.kaliningrad.ru

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- “Committed Swiss citizens emphasize in public appearances the “value of independence, of freedom, of people’s sovereignty (as supreme law of self-determi- nation for citizens), of peace, of an armed, universal neutrality, of the abdica- tion of power and size, of the sense for Switzerland as home, of the individual - way and of the other political values”. In doing so, they actually express their resentment about the loss of these highly held values. What feeds the outcry is an anxiety about loosing the innate national and - cultural identity as a consequence of the globalization process, and hence be- coming an insignificant part of a global culture. The national and political walling-off by Switzerland towards the European Union and other internation- al federations that aim at a united Europe demonstrate Switzerland’s position - to the endeavours of globalization. Due to the protests of Swiss citizens, contradictions emerge for the national political elites of conservative as well as of left-winged origin: on the one hand, - the political elite strives for progressiveness, international networking and cos- mopolitanism, because it advances the level of prosperity; on the other hand, the - nation-state depends for its legitimisation on the citizen to resort to it as a primary frame of identification. In Switzerland it is impossible on the one hand to draw the line between - state policy (administration of power and self-determination) and on the other - hand cosmopolitan culture, its conditions and a global economy with its foundations. The external economic orientation of Swiss enterprises and the in- evitability of globalization will unavoidably lead to an alteration of cultural - identity”.

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The Special Economic Zones (SEZs) in China do not simply mirror the country’s transformation from a loose quasi-feudal imperial system (that persisted until 1911) into a modern nation-state. Rather they are themselves to be understood as enclaves strictly accountable to the central government in Beijing, which also catalyse this epochal process – as Arthur Kroeber argues in the following interview.

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Mr. Kroeber, since the 1990’s boomtowns such as Shenzhen have caught global media attention. Could you sketch a brief history of the SEZs in China? China created four SEZs in 1980: Shenzhen, Zhuhai and Shantou in Guangdong province, and Xiamen in Fujian province (near Taiwan). Later in the 1980s Hainan Island, formerly a part of Guangdong province, was granted provincial status and became a SEZ in its entirety. The original purpose of the SEZs was to attract foreign capital for export-oriented industries and to act as laboratories of economic reform measures. Shenzhen was chosen because of its proximity to Hong Kong; Zhuhai, because it was close to Macao; Shantou, because many overseas Chinese business-houses in Southeast Asia have their family roots there; and Xiamen, because of its closeness to Taiwan, another potential source of capital. Of the five SEZs only one, Shenzhen, has completely fulfilled its function. Zhuhai, on the opposite side of the Pearl River from Shenzhen, has suffered from a lack of transportation links to Hong Kong and to the back-country and has not really taken off. Hainan first became a capital of smuggling, then one of risky realestate speculation that led to a property-market crash in 1995. Since then its economy has not really recovered. Shantou, similarly, was a major smuggling centre and its trade economy was essentially destroyed by a major smuggling crackdown in 1998-99. Xiamen, despite a similar smuggling scandal, has emerged as a modestly prosperous city with a strong record for environmental protection. Yet its exports, foreign investments as well as other links to the global economy, are negligible. Most Taiwanese investment has skipped Xiamen, which has poor transport links to the rest of China, and has gone instead to Shenzhen, Dongguan and more recently the Yangtze River Delta region around Shanghai. Shenzhen, however, has emerged as a major export powerhouse. It is the wealthiest city in China on a per capita basis (with a per capita income of nearly US$ 5000), and exports more than any other Chinese city except Shanghai. It has executed a successful transition from manufacturing mostly low-end consumer goods such as garments and toys to becoming a major centre of high-tech assembly equipment. This is mainly because of the creation of dense supplier networks, which can adapt to rapid product cycles in consumer electronics, and just as importantly because of its proximity to the highly efficient port of Hong Kong that enables Shenzhen, unlike most Chinese cities, to be an integral part of the global supply chain. Shenzhen and neighbouring towns are now home to two of the top three Chinese telecommunications equipment companies, three of the top four Chinese television companies, as well as a host of smaller companies involved in the production of large volumes of electronic appliances for the world market. What are the means by which the SEZs in China are provided with an extra-territorial status? The extra-territorial status of the SEZs is by no means as pronounced as the extra-territoriality of the former “treatyports” in pre-revolutionary China, where foreigners controlled enclaves, in which Chinese law did not apply. When the SEZs were founded they were granted lower tax rates, somewhat relaxed provisions for the importation of capital goods and for export processing, and some leeway in setting their own commercial and economic regulations, subject (as noted below) to supervision by the central government. Also, the entry by the Chinese from the rest of the country was restricted; a special permit was normally required. However, over the past 15 years the tax, tariff and trade privileges initially granted only to the SEZs have been ex-

Guangdong province

tended to a large number of “open cities” originally in the eastern coastal provinces and now in inland provinces as well. So the SEZs do not now differ significantly from other Chinese cities in terms of their business climate. Restrictions on labour movement have also been significantly relaxed and it is possible for factory workers in search of work to enter fairly easily the SEZs. So the SEZs do not really function any more as a distinguishable class of jurisdiction, but simply as more or less economically successful cities. Could you dwell upon the dominant lifestyle models in the Chinese SEZs? Taking Shenzhen as the main case, there are roughly three major lifestyles. First, the expatriate lifestyle of foreign company managers and professionals, who tend to live in secluded communities that replicate as much as possible the conditions of life in Western countries. The housing development inhabited by the Western oil company employees, for example, is almost exactly like an American suburb, and many of its residents have never been anywhere else in China. Many of the housewives in fact do their grocery shopping in Hong Kong, travelling by ferry between their development and downtown Hong Kong. Second is the local managerial lifestyle that is enjoyed by the Chinese white-collar work force, which is very large and thriving. These people have some of the highest salaries in China and live in fairly modern apartment or villa complexes (all of Shenzhen has been built within the last 20 years so the housing is all quite new and modern). Increasingly, they own cars and go on foreign trips as frequently as once or twice a year. Because such positions also exist in more culturally interesting cities such as Shanghai and Beijing, companies usually need to pay very high salaries and give generous benefits in order to attract local managers to Shenzhen. The factory worker lifestyle probably applies to the majority of Shenzhen residents. These people might earn between 100 and 200 US$ per month and generally live in dormitories provided by the factories. They are usually quite young, in their teens to mid twenties, and are disproportionately female. In most cases they have left families behind in the interior of China. Most of their days are spent either working or resting, since their objective is to save up as much money as they can and then go back to their village, where they would marry and perhaps start a small business. They spend very little of their money but rather either put it into their own savings or send a portion back to family members. Their only relief comes during the Chinese lunar new year in January-February, when they return to their villages for two to four weeks. In the better class of factories their life is tedious but quite bearable, and it is likely that after two to four years they will have saved up enough money to marry and go into business in their hometown. The middle-tolower class of factories have conditions which are more brutal. The workers may run the risk of injury and the discipline can be very harsh. In some cases they are forced to work many hours of overtime and are not paid extra. They even may be locked into their dormitories when they are not working and their wages may be paid late. You once compared Dongguan to industrial Manchester. Do you also think that the society emerging within the SEZs is on a comparable level to the societies of 19th century Europe? Strictly speaking the SEZs actually offer conditions that are on the whole better than those of 19th century European or American industrial towns. Because of the very high reliance on foreign investment, SEZs are predominantly a domicile for international firms with relatively high stan-

dards. European and American firms in particular are subject to intense media and shareholder scrutiny at home, and need to ensure that their facilities in China comply, at least to some extent, with international norms. The relatively high costs of SEZs also means that domestic firms operating within their borders are relatively sophisticated and not the low-end manufacturers trying to shave pennies from their labour costs. However, it is in the “spill over” cities such as Dongguan – which are not SEZs but develop economically because of their proximity to SEZs – where conditions are the worst. Here you find locally owned companies, or contract manufacturers controlled by Korean or Taiwanese investors, who are essentially immune to poorly-enforced local labour laws and do not face a very high level of scrutiny or accountability in their home markets. Consequently, the working conditions tend to be far worse there, with high rates of industrial accidents. Making allowances for difference in time and place, these factories are in many respects comparable to 19th century European and American factories. A key difference is that the industrial development of both Europe and America – as well as of Japan, Korea and Taiwan in more recent years – was largely controlled by domestic firms, even when (as in America) much of the financing came from abroad. In China, foreign firms control much of the industrial development process, particularly in the area of manufactured goods for export. Foreign firms accounted for less than 10 percent of all investment in China in 2003, yet produced 52 percent of all exports by value. The percentage of Chinese exports produced by foreign firms has steadily risen over the past decade. This foreign export presence is heavily concentrated in a handful of coastal cities such as Shenzhen and Shanghai. In the interior of the country there is a domestically oriented economy that relies mainly on domestic investment and is not well linked to the export economy. If you look at the myths being dispersed about the SEZs in China, do you see any parallels to the mythologies that have been constructed in correlation to an emergent nation-state? If yes, do you see parallels to the nation-state foundations in the 19th or to those in the 20th century? On the contrary, I think the chief myths about the SEZs – and about China’s industrial economy in general – are part of a narrative about globalisation and not about the emerging nation-state. According to this myth, SEZs are deracinated regions where a state selectively cedes much of its sovereignty to multinational corporations in exchange for various economic benefits – foreign exchange earnings, employment, technology transfer and so on. Conversely, SEZs and Chinese industrial areas are seen abroad as vortices that suck manufacturing employment away from high-wage developed countries to low-wage developing ones. This process is often described as a “race to the bottom”, whose driving forces are once again multinational corporations and their agents in both developed and developing-country governments. The SEZ is thus part of a myth about the destruction of (or at any rate, attack on) national sovereignty by transnational corporations. This creates an interesting tension in Chinese society, which is undergoing a long secular transformation from a feudal empire to a modern nation-state. Much government policy, both economic and political, is explicable only in terms of state-building. Yet, at the same time one of the most powerful engines of its economic growth – the very economic growth that is indispensable to state-building – is driven by forces that are arguably inimical, or at least indifferent to the concept of the nation-state. This is a situation unique in the history of the industrial world. Even in recent cases such as Japan, Korea and Taiwan, industrialisation and economic development were linked to nation-state building in a more or less one-to-one correspondence.

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The Switzerland of Africa

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Botswana

- “As the song goes: “Diamonds may be a girl’s best friend”. But for the Botswana - economy total reliance on this profitable gem is considered unwise by government planners and economists. The emphasis now is to expand the country’s industrial base, which if successful would mean less reliance on imports from - neighbouring South Africa, the regional powerhouse.

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Even diamonds face as commodities price fluctuations, says a Central Bank of Botswana statistician, who noted that of total diamond sales 80 percent of re- venue is earned from Europe. -

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This makes Botswana less dependant on bilateral trade with South Africa than other nations of the Southern African Development Community (SADC), such - as Namibia, Mozambique, Zimbabwe and Swaziland. “Botswana does not wish - to be a satellite economy of South Africa”, says President Festus Mogae, who is pushing for economic diversification by seeking foreign direct investment in the manufacturing and information technology sectors. - For the economy of the “Switzerland of Africa”, as Botswana likes to call itself, a decade has passed since Botswana graduated from the category of “least developed countries” to being one of the middle-income earners. - At independence in 1966, Botswana had been one of the world’s poorest countries, with most of its people subsisting on rural arable and pastoral farming activities. Most workers were migrant miners in South Africa and donors, princi- pally the United Kingdom, financed a large part of the national budget. -

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The discovery and commercial exploitation of diamonds, starting in 1969, saw real per capita income grow at an average annual rate of about seven percent - for the next 30 years. “This growth would not have been possible without the - active partnership between government and the private sector, both domestic and foreign”, Mogae says. -

- Some foreign investment is coming from companies that see the advantage of - Botswana’s centralised location in the African subcontinent. The information company MGX plans to use its Botswana subsidiary cdp Africa to launch products and services throughout the region. - Another success can be found in the services sector. After three years of operations in the country, the South African insurance giant Metropolitan Life has gained a 22 percent market share in Botswana.” - Misanet.com/IPS, 22.03.2002

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Guinea

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- “Guinea is called the Switzerland of Africa, with its lofty mountains and high plateaus, plus a temperate climate. [...] One of your first pleasant surprises when visiting the Republic of Guinea is that it is uncrowded. Big in size, yet - small in population.[...] Guineans offer all the ingredients of a “Dream Vacation”, - if you long for an uncrowded, unspoiled, visitor-friendly country. In a class by itself is Guinea’s unending selection of spectacular landscapes, which unfolded around each bend, like a cinemascope movie, as we motored through the - hilly ‘Fouta Djalon’ region”.

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Muguette Goufrani, Africa Travel Magazine, 02.05.2004

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“Lake Bunyoni is situated in the mountainous region close to the Rwanda border. This part of Uganda is also called the Switzerland of Africa. A nice place to - relax for a couple of days and to enjoy the beautiful scenery.” -

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Puk Daniels, “Uganda: The Pearl of Africa”, 2004

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Arthur Kroeber (1962) first visited China in 1985 and has worked there as a journalist and analyst since 1991. From 1996 to 1999 he was based in Guangzhou and made frequent trips to all of China’s Special Economic Zones, and has continued visiting Shenzhen and other cities of the Pearl River Delta every year since then. Since 2002 he has been managing editor of China Economic Quarterly (www.theceq.info), a newsletter on China’s economy and business environment. His articles have appeared in many publications including The Economist, The Far Eastern Economic Review, and Wired magazine. He is a frequent contributor to the opinion page of the Financial Times.

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Kaliningrad

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Beginning from 1991 profound changes took place in the region. First of all they - were related to abolition of the Kaliningrad region status. Formerly it used to - be the closed area for foreigners where major formations of Russian army and - Navy dislocated. This event stimulated economic activity in the region, made it attractive to foreign investments. In January 1996 the region was declared the - area of the Special Economic Zone. The citizens of Kaliningrad reconstructed - their city and their region with their own effort. They built it on the ruins anew. - Today the Kaliningrad region has become not only economically self-sufficient but it represents Russia worthily in the European Community. - www.gov.kaliningrad.ru

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- Clarissa Tossin (1973) lives in Sao Paulo, Brasil and works as a graphic designer under the name A-Linha. Her work appeared in several exhibitions and publications such as Übersee. www.a-linha.org - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ -

Before the Third Gulf War, Iraq was conceived as the paradigmatic lab- oratory in the age of globalization: a gateway to the world inhabited by a model society. This bold vision of a satellite state also characterized - the building efforts of the Panama Canal, which neither was part of the - United States mainland nor an actual colony. Now that the artificial USzone on both sides of the canal has been dissolved, Alexander Missal - looks back to the phase when it was created. -

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The isthmus, the neck of land between the Atlantic and Pacific, had always fascinated the discoverers and strategists of Europe’s great powers. Columbus steered on his third trip into the New World as far as the opening of the river Chagres, the Spaniard Balboa was the first European to see from close up the area of the Pacific which is today Panama city, where millions live. The German Emperor Karl Vth was enthusiastic over the idea of an inter-oceanic canal, and 250 years later Alexander von Humboldt chatted with his friend, the American President and geographer Thomas Jefferson, about the vision of a waterway between the two oceans. It was only through the technical advancements of the industrial age that the centuries old dream of a sea-route to India could be realized. The Frenchman Ferdinand de Lesseps, the architect of the Suez Canal, was the first to take the Mammut project of 1879 in hand. The experienced engineer, however, underestimated the resistance of the Tropics and practically every third European construction-worker died of yellow-fever and malaria. That both epidemics were spread by gnats was unknown to the French. In Paris the stock corporation which was financing the project announced bankruptcy. After the project had already consumed a billion francs the frustrated de Lesseps, in the meantime a greying national hero, gave up. England had been badly defeated by the Boer War in South Africa and gave in 1902 its right to build the canal to the USA. The new great power had been steering its way on a course of expansion since the 1890s and had conquered Hawaii and then in the Spanish-American War Cuba. The Officer of the Marines Alfred Thayer Mahan understood the ocean as a new “medium of communication” and canvassed for the creation of a modern navy. The Western civilization should spread over the sea passage to the Tropics and for this expansion the construction of an interoceanic canal was essential. “The secret of the street is still the problem and the disgrace of humanity”, wrote Mahan. One of the greatest admirers of Mahans ideas was the young historian and cowboy wannabe Theodore Roosevelt. He saw the expansion outwards as the last chance for a corrupted American society in which not the pioneers of the Wild West but greedy managers struck the tone. Strikes and crises threatened the economy of the young country and immigrants from Southern Europe threatened the traditionally homogenous community. Roosevelt undertook in New York a political career and dedicated himself more and more to external affairs. The expansion onto new shores meant more to him than new markets for American products. Roosevelt understood the territorial expansion as a national adventure, as a rebellious answer to the indolence of the pampered capitalists. The construction of the Panama Canal became for the politician, who in 1901 after the assassination of President McKinley advanced unexpectedly to the highest office of the nation, the symbol for an American crusade.

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Constructing the canal

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In the end a Frenchman did enter onto the stage as the ‘obstetrician’ of the canal and of the nation of Panama. Philippe BunauVarilla had been the chief engineer under his countryman de Lesseps and could not reconcile himself with the project’s collapse. He distributed to American senators, who wanted to vote in congress for a canal route through Nicaragua, stamps of the land upon which a lava-spewing volcano was pictured. The alarmed congressmen voted for Panama. However, the Columbian government, which was still in power on the isthmus, rejected to rent the planned canal zone at the agreed upon price to the USA. Bunau-Varilla advised Roosevelt to militarily support the until then spiritless war of the Panamanian separatists against Columbia. The plan took off. The revolution took a peaceful course and on November 4th, 1903, Panama declared its independence. Bunau-Varilla named himself the mediator of Panama and designed a contract, which gave the USA control over a 16 kilometre-wide canal zone and through this made the rest of the country dependent on the now paramount building contractors. As the freshly baked president of Panama finally came to Washington and saw the already signed contract, “he practically collapsed on the train platform” – reported a recognizably amused Bunau-Varilla in his memoirs. Roosevelt justified before the American congress the intervention in Panama with the following reason. His government had acted “in the interests of the population on the isthmus, in the interests of our own national needs and of the whole civilized world”. The idea of the USA as the world’s police had been born. The construction of the canal was at first more difficult than

expected. The new chief engineer, a former manager of the railroads, was under enormous public pressure to finally “make the dirt fly”. Still, jurisdictory scuffling between the seven members of the canal commission and bureaucratic chaos in the capital Washington delayed the beginning of work. Added to this, the foreign world of the Tropics did not always show its most pleasant side. “Tis the land where all the insects breed/ That live by bite and sting;/ Where the birds are quite winged rainbows bright/ Tho’ seldom one doth sing!” composed the American Panamanian poet James Stanley Gilbert. The macabre lyric of the “Bards of the Isthmus” did not make it into any anthology but managed to convey the fear of the dangers of the jungle in hardly soothing rhymes. Yellow-fever and malaria now threatened the American canal workers. The highest positioned medical officer, Colonel William C. Gorgas, had already enjoyed success in the fight against yellow-fever in Cuba’s capital Havanna, however his belief in the “mosquito theory” still caused laughter among his superiors in Washington. It was hard to convey to them that the striped Stegomyia gnats should transmit the epidemic. The approved budget for public health in the canal zone had been too stingily evaluated. A yellow-fever epidemic early in the year of 1905 caused many workers to turn their backs on the project. The first canal commission was dissolved. In addition to this, Roosevelt and his Minister of War Taft had to deal with extremely negative press. A critical journalist and friend of the German Emperor Wilhelm II. reported that prostitutes had been shipped to the isthmus on government costs and the American senate launched an investigation. Against all odds There was little of the national spirit of adventure which Roosevelt had hoped for to detect. The President decided to place himself at the head of the crusade in Panama. On November 9th, 1906, Roosevelt embarked for the isthmus on the largest war ship of the marines, the U.S.S. Louisiana. Once in Panama he dined for 30 cents in the canteen with the canal workers and placed himself behind the wheel of the 95 ton steam-shovel. The photo, which showed Roosevelt in a white suit with a Panamahat on the oil-smeared colossus was printed a few days later on the title page of American newspapers. Roosevelt’s PR strategy worked wonders. “A man came to Panama and mingled for a few hours among the men of the isthmus and it was as if a monstrously enormous electrical battery dealt a blow to the life of the jungle”, a journalist wrote later about the visit. In the meantime after the initial launching problems the infrastructure for the canal construction – lodgings, hospitals, a new double-platformed railroad route from the Atlantic to the Pacific – was finished. The next chief engineer John F. Stevens pumped money into the fight against the epidemic and within a few months Gorgas had smoked out the houses in the areas of the canal zone and fitted them with mosquito nets. The Panamanian cities of Colón and Panama also fell under the control of Gorgas’es health police. Those who were infected came under quarantine. The last case of yellow-fever was listed in the statistics in December 1905. The officer of hygiene let the areas of water dry out in order to destroy the incubating places of the Anopheles-gnats, the carriers of the infamous “Chagres-Fever” malaria. In his fanaticism Gorgas did not even hold back from the baptism water in the churches. The rate of infected canal workers sank during the building of the canals from 80 to under 10 percent. “A true valley of death was transformed into a land of health and comfort”, wrote the secretary of the canal commission. After Roosevelt’s visit to the isthmus all critique over the project was forgotten. The building of the canal was declared a typically American success story. As the overworked chief engineer complained in a letter to Roosevelt about his job and caused himself to be fired, a third canal commission took over the helm in April 1907. Roosevelt played for a short while with the idea of giving building contracts to private companies, but then decided to go the opposite way. At the head of the project of the century stood now no longer a civilian but rather an engineer of the army and a graduate of the elite military academy West Point. George W. Goethals was the chief engineer and chairman of the canal commission. De facto he had the absolute powers of a dictator in the canal zone. While the French had attempted to build in Panama a canal on the level of the ocean, Roosevelt and Goethals pushed through the concept of an inner canal with several locks; two on the Pacific side and one on the Caribbean side. The largest part of the route between would

bring the ships into an artificial sea of 28 meters over ocean level, which should be created through the damming of the river Chagres. The excavations mostly limited themselves to a 15 kilometre long segment, the famous “Culebra Cut”. Media spectacle and tourist sight Only a few years after Goethals takeover on the isthmus the success of the project was practically self-understood. Journalists, writers and tourists with cameras streamed in to go “canal spotting” and wandered over the 300 meter long canal made of concrete, easily the largest construction on earth. Until the ceremonial opening of the canal in 1914 more than 25 books and 500 articles were published in popular newspapers. Because of the great demand one of the books was even published under another name. Willis John Abbot’s “Panama and the Canal in Picture and Prose” sold in the USA over a million copies. A few of the authors had only visited Panama for a few days or even hours. Still their sense of wonder knew no boundaries. The publicists did not limit themselves to the spectacular facts and numbers of the construction but rather described the canal zone as an American utopia, as the vision of a new society. Although Panama was thousands of kilometres away from the United States the canal became, exactly as Roosevelt had envisioned, the symbol for the past and for the future of America. In the opinion of two contemporary historians the isthmus, which Columbus had once headed for, was the “birth-place of American history”. With the canal was realized civilization’s centuries old dream of a sea-route to India. “It is majestic, it is fearinspiring, it is the canal”, wrote the journalist Frederic Haskin. The view into the 40 meter deep “Culebra Cut” strengthened the belief of the viewer in advancement through technology and will-power. “Commercial, political, social and even religious consequences” were expected from the wonder-project from another author. In Panama, American soldiers of the engineer corps fought together with civilians against the powers of nature. The official world-exhibition poster in San Francisco, in which in 1915 the inauguration of the canal was celebrated, shows the over-dimensional figure of Hercules from the antique as he hoists the Panamanian cliffs away from one another. The philosopher William James, the brother of the American writer Henry James, had spoken in 1910 of the “moral equivalent of war”. The Panama Canal made this vision of an American army in the service of progress come true. On the island Roosevelt’s manly-martial virtues conquered the fear of the future and of the foreign. The American journalists had only scorn for the failed project of de Lesseps. The alleged life-style of the French in Panama became the symbol of an “overly civilized” European cliché. “Especially champagne was so cheap that it flowed like water. The consequences were as dire as they were unavoidable. After the ingredients for a truly bacchanalian orgy were present, the orgy became the logical result”, opined the Secretary of the American Commission of the canal. In the opinion of the American commentators neither the epidemic nor financial problems had sunk the French canal project, but rather alcohol, women and corruption. It was no coincidence that this description corresponded exactly to Roosevelt’s picture of the capitalist-class in his own land. In Panama the American government controlled whole areas of life in the canal zone. Lodgings and medical care for the canal workers was free. “Comfortable, even elegant quarters with shower and bath – janitor and chambermaids gratis”, praised the best-selling author Abott. The employees could take advantage of 42 paid vacation days as well as 30 sick days per year. Modern bakeries and ice-cream factories took care of their physical well-being. The supermarkets in the canal zone functioned according to the principle of the coop and managed without expensive merchants. The prices were lower than in the USA and one was paid not with money but rather according to a system of credit. Small Panamanian merchants did not have a chance against the state monopoly. In any case only about 5,000 American canal workers and their families were able to enjoy these privileges. The approximately 30,000 employees of the canal commission were guest workers from the Caribbean, and they were paid in worthless Panamanian silver and lived mostly in the slums. The West Indians on the isthmus had to suffer the same discrimination as Blacks in the American South. One out of five of them died in Panama through accidents at work or because of sicknesses. There was no place in utopia for those who did not belong to the white civilization of the future.

Gated community Out of the once tropical hell of Panama had been created, in the understanding of the American authors, a land of milk and honey. They believed to see in the life of the canal zone – which was financed through taxes – the society of the future, without social classes or conflicts. The technological advancement made the prosperity of all possible. Out of the belief of a national awakening was created a social and moral fundament, a fundament which had been breaking up in the USA because of massive industrialization and immigration. An author wrote over the new ideology: “Collectivism, this new power which we employ with such great success in the Tropics and which we as Americans have developed farther than any other nation, is worthy enough to be used as the solution for our problems at home”. The description “socialist” for the state-planned economy on the isthmus passed rarely over the lips of the opinion-makers. Despite this, the promise of social peace made the abandonment of America’s fundamental values of democracy and competition possible. “The building of the canal is the classical example for what a government can accomplish when it is ready to centralize power and let this power function without the interruption of democracy”, ascertained the precocious 25-year old Walter Lippmann, who would later become one of the most influential journalists in America. The authors saw in the figure of Goerge W. Goethals, the absolute ruler of the canal zone, the “hero, the big brother, the confessor of every canal worker” or even the “Salomon of the isthmus”. The officer and engineer embodied the type of the new statesman, of the “expert”. The technocracy of the future should not have any more need of democratic controls but rather only an efficient administration. Panama was an experiment, a personal challenge. The society, which the commentators imagined, corresponded to the vision that Edward Bellamy had described for the year 2000 in his utopian novel “Looking Backwards”, which was in 1887 next to “Uncle Tom’s Cabin” the top bestseller in American literature. It was the utopia of a rationalized, static world, a frozen paradise. As the Panama Canal was inaugurated on the 15th of August 1914, the occasion was completely overshadowed by the breaking out of the First World War. In the Golden 1920s the centralized project of Panama as a model of the future had run out of gas and it remained a laboratory experiment. Even the technical work of wonders never brought the success, which Roosevelt and his hanger-ons had prophesied. Today approximately 14,000 ships cross through the narrow water-route per year, fewer than through the northern Baltic Sea Canal, which was finished in 1895. Yet there are still forced comparisons with the megalomanic projects of the Nazis and Stalinists in later decades. Looking backwards the ideological program of the building of the canal could have served as the model for totalitarian regimes, who through modern technology and reactionary ideas were able in the 20th century to create their own reign of terror. Still, more than anything else the building of the canal revealed the eternal pioneer spirit of the American nation. It was the desire in the search for an ideal society to constantly undergo a process of self-invention, which ultimately brought them into the jungle on the farthest isthmus of Panama. The experiment of America ended there almost a century later. And Panama began at once to work on a new image. In the last decades above all drug-dealing and poverty have characterized the Central American land, which is about the size of Switzerland. In the age of globalisation the Panamanian government is depending on tourism and a service-economy as well as on their new property, the Panama Canal. Alexander Missal (1971) is a journalist and historian. He studied history, American literature and art history at the University of Hamburg and the University of Maryland, College Park. Missal is currently completing his dissertation on the building of the Panama Canal and its interpretation in American culture. He has published numerous articles on academic subjects and current issues and works as an editor for dpa (Deutsche Presse-Agentur), the major German news service. His special interests include business entrepreneurs, the novels of Thomas Pynchon, and the TV series “The Sopranos.”

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- Clarissa Tossin (1973) lives in Sao Paulo, Brasil and works as a graphic designer under the name A-Linha. Her work appeared in several exhibitions and publications such as Übersee. www.a-linha.org - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ -

Before the Third Gulf War, Iraq was conceived as the paradigmatic lab- oratory in the age of globalization: a gateway to the world inhabited by a model society. This bold vision of a satellite state also characterized - the building efforts of the Panama Canal, which neither was part of the - United States mainland nor an actual colony. Now that the artificial USzone on both sides of the canal has been dissolved, Alexander Missal - looks back to the phase when it was created. -

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The isthmus, the neck of land between the Atlantic and Pacific, had always fascinated the discoverers and strategists of Europe’s great powers. Columbus steered on his third trip into the New World as far as the opening of the river Chagres, the Spaniard Balboa was the first European to see from close up the area of the Pacific which is today Panama city, where millions live. The German Emperor Karl Vth was enthusiastic over the idea of an inter-oceanic canal, and 250 years later Alexander von Humboldt chatted with his friend, the American President and geographer Thomas Jefferson, about the vision of a waterway between the two oceans. It was only through the technical advancements of the industrial age that the centuries old dream of a sea-route to India could be realized. The Frenchman Ferdinand de Lesseps, the architect of the Suez Canal, was the first to take the Mammut project of 1879 in hand. The experienced engineer, however, underestimated the resistance of the Tropics and practically every third European construction-worker died of yellow-fever and malaria. That both epidemics were spread by gnats was unknown to the French. In Paris the stock corporation which was financing the project announced bankruptcy. After the project had already consumed a billion francs the frustrated de Lesseps, in the meantime a greying national hero, gave up. England had been badly defeated by the Boer War in South Africa and gave in 1902 its right to build the canal to the USA. The new great power had been steering its way on a course of expansion since the 1890s and had conquered Hawaii and then in the Spanish-American War Cuba. The Officer of the Marines Alfred Thayer Mahan understood the ocean as a new “medium of communication” and canvassed for the creation of a modern navy. The Western civilization should spread over the sea passage to the Tropics and for this expansion the construction of an interoceanic canal was essential. “The secret of the street is still the problem and the disgrace of humanity”, wrote Mahan. One of the greatest admirers of Mahans ideas was the young historian and cowboy wannabe Theodore Roosevelt. He saw the expansion outwards as the last chance for a corrupted American society in which not the pioneers of the Wild West but greedy managers struck the tone. Strikes and crises threatened the economy of the young country and immigrants from Southern Europe threatened the traditionally homogenous community. Roosevelt undertook in New York a political career and dedicated himself more and more to external affairs. The expansion onto new shores meant more to him than new markets for American products. Roosevelt understood the territorial expansion as a national adventure, as a rebellious answer to the indolence of the pampered capitalists. The construction of the Panama Canal became for the politician, who in 1901 after the assassination of President McKinley advanced unexpectedly to the highest office of the nation, the symbol for an American crusade.

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Constructing the canal

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In the end a Frenchman did enter onto the stage as the ‘obstetrician’ of the canal and of the nation of Panama. Philippe BunauVarilla had been the chief engineer under his countryman de Lesseps and could not reconcile himself with the project’s collapse. He distributed to American senators, who wanted to vote in congress for a canal route through Nicaragua, stamps of the land upon which a lava-spewing volcano was pictured. The alarmed congressmen voted for Panama. However, the Columbian government, which was still in power on the isthmus, rejected to rent the planned canal zone at the agreed upon price to the USA. Bunau-Varilla advised Roosevelt to militarily support the until then spiritless war of the Panamanian separatists against Columbia. The plan took off. The revolution took a peaceful course and on November 4th, 1903, Panama declared its independence. Bunau-Varilla named himself the mediator of Panama and designed a contract, which gave the USA control over a 16 kilometre-wide canal zone and through this made the rest of the country dependent on the now paramount building contractors. As the freshly baked president of Panama finally came to Washington and saw the already signed contract, “he practically collapsed on the train platform” – reported a recognizably amused Bunau-Varilla in his memoirs. Roosevelt justified before the American congress the intervention in Panama with the following reason. His government had acted “in the interests of the population on the isthmus, in the interests of our own national needs and of the whole civilized world”. The idea of the USA as the world’s police had been born. The construction of the canal was at first more difficult than

expected. The new chief engineer, a former manager of the railroads, was under enormous public pressure to finally “make the dirt fly”. Still, jurisdictory scuffling between the seven members of the canal commission and bureaucratic chaos in the capital Washington delayed the beginning of work. Added to this, the foreign world of the Tropics did not always show its most pleasant side. “Tis the land where all the insects breed/ That live by bite and sting;/ Where the birds are quite winged rainbows bright/ Tho’ seldom one doth sing!” composed the American Panamanian poet James Stanley Gilbert. The macabre lyric of the “Bards of the Isthmus” did not make it into any anthology but managed to convey the fear of the dangers of the jungle in hardly soothing rhymes. Yellow-fever and malaria now threatened the American canal workers. The highest positioned medical officer, Colonel William C. Gorgas, had already enjoyed success in the fight against yellow-fever in Cuba’s capital Havanna, however his belief in the “mosquito theory” still caused laughter among his superiors in Washington. It was hard to convey to them that the striped Stegomyia gnats should transmit the epidemic. The approved budget for public health in the canal zone had been too stingily evaluated. A yellow-fever epidemic early in the year of 1905 caused many workers to turn their backs on the project. The first canal commission was dissolved. In addition to this, Roosevelt and his Minister of War Taft had to deal with extremely negative press. A critical journalist and friend of the German Emperor Wilhelm II. reported that prostitutes had been shipped to the isthmus on government costs and the American senate launched an investigation. Against all odds There was little of the national spirit of adventure which Roosevelt had hoped for to detect. The President decided to place himself at the head of the crusade in Panama. On November 9th, 1906, Roosevelt embarked for the isthmus on the largest war ship of the marines, the U.S.S. Louisiana. Once in Panama he dined for 30 cents in the canteen with the canal workers and placed himself behind the wheel of the 95 ton steam-shovel. The photo, which showed Roosevelt in a white suit with a Panamahat on the oil-smeared colossus was printed a few days later on the title page of American newspapers. Roosevelt’s PR strategy worked wonders. “A man came to Panama and mingled for a few hours among the men of the isthmus and it was as if a monstrously enormous electrical battery dealt a blow to the life of the jungle”, a journalist wrote later about the visit. In the meantime after the initial launching problems the infrastructure for the canal construction – lodgings, hospitals, a new double-platformed railroad route from the Atlantic to the Pacific – was finished. The next chief engineer John F. Stevens pumped money into the fight against the epidemic and within a few months Gorgas had smoked out the houses in the areas of the canal zone and fitted them with mosquito nets. The Panamanian cities of Colón and Panama also fell under the control of Gorgas’es health police. Those who were infected came under quarantine. The last case of yellow-fever was listed in the statistics in December 1905. The officer of hygiene let the areas of water dry out in order to destroy the incubating places of the Anopheles-gnats, the carriers of the infamous “Chagres-Fever” malaria. In his fanaticism Gorgas did not even hold back from the baptism water in the churches. The rate of infected canal workers sank during the building of the canals from 80 to under 10 percent. “A true valley of death was transformed into a land of health and comfort”, wrote the secretary of the canal commission. After Roosevelt’s visit to the isthmus all critique over the project was forgotten. The building of the canal was declared a typically American success story. As the overworked chief engineer complained in a letter to Roosevelt about his job and caused himself to be fired, a third canal commission took over the helm in April 1907. Roosevelt played for a short while with the idea of giving building contracts to private companies, but then decided to go the opposite way. At the head of the project of the century stood now no longer a civilian but rather an engineer of the army and a graduate of the elite military academy West Point. George W. Goethals was the chief engineer and chairman of the canal commission. De facto he had the absolute powers of a dictator in the canal zone. While the French had attempted to build in Panama a canal on the level of the ocean, Roosevelt and Goethals pushed through the concept of an inner canal with several locks; two on the Pacific side and one on the Caribbean side. The largest part of the route between would

bring the ships into an artificial sea of 28 meters over ocean level, which should be created through the damming of the river Chagres. The excavations mostly limited themselves to a 15 kilometre long segment, the famous “Culebra Cut”. Media spectacle and tourist sight Only a few years after Goethals takeover on the isthmus the success of the project was practically self-understood. Journalists, writers and tourists with cameras streamed in to go “canal spotting” and wandered over the 300 meter long canal made of concrete, easily the largest construction on earth. Until the ceremonial opening of the canal in 1914 more than 25 books and 500 articles were published in popular newspapers. Because of the great demand one of the books was even published under another name. Willis John Abbot’s “Panama and the Canal in Picture and Prose” sold in the USA over a million copies. A few of the authors had only visited Panama for a few days or even hours. Still their sense of wonder knew no boundaries. The publicists did not limit themselves to the spectacular facts and numbers of the construction but rather described the canal zone as an American utopia, as the vision of a new society. Although Panama was thousands of kilometres away from the United States the canal became, exactly as Roosevelt had envisioned, the symbol for the past and for the future of America. In the opinion of two contemporary historians the isthmus, which Columbus had once headed for, was the “birth-place of American history”. With the canal was realized civilization’s centuries old dream of a sea-route to India. “It is majestic, it is fearinspiring, it is the canal”, wrote the journalist Frederic Haskin. The view into the 40 meter deep “Culebra Cut” strengthened the belief of the viewer in advancement through technology and will-power. “Commercial, political, social and even religious consequences” were expected from the wonder-project from another author. In Panama, American soldiers of the engineer corps fought together with civilians against the powers of nature. The official world-exhibition poster in San Francisco, in which in 1915 the inauguration of the canal was celebrated, shows the over-dimensional figure of Hercules from the antique as he hoists the Panamanian cliffs away from one another. The philosopher William James, the brother of the American writer Henry James, had spoken in 1910 of the “moral equivalent of war”. The Panama Canal made this vision of an American army in the service of progress come true. On the island Roosevelt’s manly-martial virtues conquered the fear of the future and of the foreign. The American journalists had only scorn for the failed project of de Lesseps. The alleged life-style of the French in Panama became the symbol of an “overly civilized” European cliché. “Especially champagne was so cheap that it flowed like water. The consequences were as dire as they were unavoidable. After the ingredients for a truly bacchanalian orgy were present, the orgy became the logical result”, opined the Secretary of the American Commission of the canal. In the opinion of the American commentators neither the epidemic nor financial problems had sunk the French canal project, but rather alcohol, women and corruption. It was no coincidence that this description corresponded exactly to Roosevelt’s picture of the capitalist-class in his own land. In Panama the American government controlled whole areas of life in the canal zone. Lodgings and medical care for the canal workers was free. “Comfortable, even elegant quarters with shower and bath – janitor and chambermaids gratis”, praised the best-selling author Abott. The employees could take advantage of 42 paid vacation days as well as 30 sick days per year. Modern bakeries and ice-cream factories took care of their physical well-being. The supermarkets in the canal zone functioned according to the principle of the coop and managed without expensive merchants. The prices were lower than in the USA and one was paid not with money but rather according to a system of credit. Small Panamanian merchants did not have a chance against the state monopoly. In any case only about 5,000 American canal workers and their families were able to enjoy these privileges. The approximately 30,000 employees of the canal commission were guest workers from the Caribbean, and they were paid in worthless Panamanian silver and lived mostly in the slums. The West Indians on the isthmus had to suffer the same discrimination as Blacks in the American South. One out of five of them died in Panama through accidents at work or because of sicknesses. There was no place in utopia for those who did not belong to the white civilization of the future.

Gated community Out of the once tropical hell of Panama had been created, in the understanding of the American authors, a land of milk and honey. They believed to see in the life of the canal zone – which was financed through taxes – the society of the future, without social classes or conflicts. The technological advancement made the prosperity of all possible. Out of the belief of a national awakening was created a social and moral fundament, a fundament which had been breaking up in the USA because of massive industrialization and immigration. An author wrote over the new ideology: “Collectivism, this new power which we employ with such great success in the Tropics and which we as Americans have developed farther than any other nation, is worthy enough to be used as the solution for our problems at home”. The description “socialist” for the state-planned economy on the isthmus passed rarely over the lips of the opinion-makers. Despite this, the promise of social peace made the abandonment of America’s fundamental values of democracy and competition possible. “The building of the canal is the classical example for what a government can accomplish when it is ready to centralize power and let this power function without the interruption of democracy”, ascertained the precocious 25-year old Walter Lippmann, who would later become one of the most influential journalists in America. The authors saw in the figure of Goerge W. Goethals, the absolute ruler of the canal zone, the “hero, the big brother, the confessor of every canal worker” or even the “Salomon of the isthmus”. The officer and engineer embodied the type of the new statesman, of the “expert”. The technocracy of the future should not have any more need of democratic controls but rather only an efficient administration. Panama was an experiment, a personal challenge. The society, which the commentators imagined, corresponded to the vision that Edward Bellamy had described for the year 2000 in his utopian novel “Looking Backwards”, which was in 1887 next to “Uncle Tom’s Cabin” the top bestseller in American literature. It was the utopia of a rationalized, static world, a frozen paradise. As the Panama Canal was inaugurated on the 15th of August 1914, the occasion was completely overshadowed by the breaking out of the First World War. In the Golden 1920s the centralized project of Panama as a model of the future had run out of gas and it remained a laboratory experiment. Even the technical work of wonders never brought the success, which Roosevelt and his hanger-ons had prophesied. Today approximately 14,000 ships cross through the narrow water-route per year, fewer than through the northern Baltic Sea Canal, which was finished in 1895. Yet there are still forced comparisons with the megalomanic projects of the Nazis and Stalinists in later decades. Looking backwards the ideological program of the building of the canal could have served as the model for totalitarian regimes, who through modern technology and reactionary ideas were able in the 20th century to create their own reign of terror. Still, more than anything else the building of the canal revealed the eternal pioneer spirit of the American nation. It was the desire in the search for an ideal society to constantly undergo a process of self-invention, which ultimately brought them into the jungle on the farthest isthmus of Panama. The experiment of America ended there almost a century later. And Panama began at once to work on a new image. In the last decades above all drug-dealing and poverty have characterized the Central American land, which is about the size of Switzerland. In the age of globalisation the Panamanian government is depending on tourism and a service-economy as well as on their new property, the Panama Canal. Alexander Missal (1971) is a journalist and historian. He studied history, American literature and art history at the University of Hamburg and the University of Maryland, College Park. Missal is currently completing his dissertation on the building of the Panama Canal and its interpretation in American culture. He has published numerous articles on academic subjects and current issues and works as an editor for dpa (Deutsche Presse-Agentur), the major German news service. His special interests include business entrepreneurs, the novels of Thomas Pynchon, and the TV series “The Sopranos.”

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US hostility against Cuban sovereignty and independence developed before any Communist country existed, persisted during the USSR’s lifetime and intensified after the collapse of Eastern Europe. This hostility has grown worse as the Gulf of Mexico has become one of the most important oil basins in the world, as confirmed by recent scientific data. Now that Cuba has established Exclusive Economic Zones (EEZ) in the Gulf of Mexico, Carlos Iglesias claims that they could function as a “merging frontier”.

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- Source: The Oil Industry in Cuba

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- Photos______________________________________________________________

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- Fulguro - consists of Cédric Decroux (1976), Axel Jaccard (1977) and Yves Fidalgo (1976). They live and work in Lausanne, Switzerland. Their work includes industrial design projects as - well as visual communication for clients such as the Bouroullec brothers or Expo.02. Their - work has been exhibited widely, e.g. at the Basta gallery in Lausanne in 2003, where they - presented auto-edited pieces of furniture and objects. Presented on this and the previous page is their conceptual photo series “Territories” (2004). www.fulguro.ch - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Cuba could receive many benefits from the crude oil beneath the Gulf’s waters, as international market prices have often forced huge disbursements. During 2002, when crude oil prices were 35 US$ a barrel, Cuba had to spend 500 million US$ more than planned, which became a strong ballast for national economic growth. Thus, when oil is mentioned, Cubans stop being open and talkative and behave as if their guests were all spies and enemies. This silence speaks volumes, especially as the sole world superpower, the same that has been harassing Cuba for the last 45 years, is merely 144 km away. Discretion is also justified since George W. Bush’s administration, maybe the most ruthless since 1959, seems ready to do anything to control the so-called black gold, monopolizing hydrocarbon reserves before they will be fully exhausted.

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Cuban oil

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The history of prospecting oil in Cuba dates back to 1881, when a natural naphtha deposit was found in Motembo in the centre of the island. And yet exploration was limited until 1960, when the oil industry was nationalized and Cubapetróleo SA (CUPET) was born. Prospects were extended and new reserves were found, mainly in Varadero, a famous beach resort 150 km east of Havana. Varadero is today Cuba’s main oilfield with proven reserves at two billion barrels and located in the Northern Oil Province of the island, Cuba’s Heavy Oil Belt. (The Northern Oil Province’s daily production is stabilized at 65,000 bpd of crude oil and 1,8 million m 3 of natural gas.) The 112,000 km 2 big Cuban EEZ in the Gulf of Mexico, being actually bigger than the national territory (110,860 km 2) and today divided into 59 blocks with an average of 1,900 km 2, saw its ribbon cut under good auspices during the Jimmy Carter administration in Washington. On January 26th, 1976, the United States, Mexico and Cuba agreed to share the troubled waters according to Maritime Law, and yet this agreement has never been enforced. Washington’s hostility against Havana led to the opening of the US Interest Section in Cuba. Equipped with official licenses and prohibited from spending money on the island, as this was considered “contact with the enemy”, American citizens travelled to the neighbouring Caribbean nation in great numbers. Since 1991, Cuba has been promoting foreign investments in key sectors of its economy. In 1995 a flexible Foreign Invest-

ments Bill was approved by the National Assembly (parliament), with many legal advantages based on modifications to the Constitution three years before. In 1999 CUPET, which serves the branch at the Ministry of Basic Industry for exploration, production, refinement, distribution, store, trade and service in the oil sector, opened the Gulf of Mexico EEZ to foreign investments, with promising perspectives of success for partners. Exploring the Gulf of Mexico According to experts, the Cuban EEZ contains huge potential for light oil. The Geophysical Congress in Havana (2001) noted, for instance, that the Cuban EEZ could hold four structures with reserves for 2-4 billion barrels. This is not a big surprise, since the Cuban EEZ is close to other oil areas in the Gulf of Mexico, which are known for high production as well as proven results. By 2006 they will represent two thirds of daily yield, supplying some additional 440,000 bpd, as the US Department of Interior has noted. Cuban authorities are aware that there is a market for crude oil and natural gas and have therefore developed attractive contracts, in which only minimal commitments are asked from foreign partners, who are primarily asked to explore resources and not to invest money. A simple and flexible fiscal regime allows them to retrieve invested money within a short period, but without royalties or taxes to export benefits and other facilities. These perspectives seem to balance out the climatic, economic, natural and mainly political risks in exploring the Gulf of Mexico. After all the Cuban EEZ has already attracted several investors. In fact, ten blocks at the EEZ and nine in land or shallow waters have been presently licensed to Canadian, European and other companies. Foreign investors Amidst those partners is Repsol-YPF from Spain, which has already reported the beginning of drilling in April by using the Norwegian oilrig Erickraude, the biggest in the world. Antonio Molina, the Chairman of the Spanish company, stated that those areas involve high risk (due to depths of up to 3,000 m in the licensed blocks). But Repsol-YPF was optimistic. The Spanish oil company hopes to increase profits by operating in six blocks of the main Caribbean island’s EEZ, as the successful example of the Canadian company Pebercan has shown. Other successful

partners for Cuban oil include Sherritt International, that won licenses in four of the EEZs’ blocks, and China Petrochemical (SINOPEC), that signed a Memorandum of Understanding with CUPET to explore four blocks. A speaker of the second most important Chinese oil company said that they were going to investigate those blocks and will decide then, whether or not they will sign a prospecting contract. Meanwhile, Jose Eduardo Dutra, the Chairman of the Brazilian state-run oil giant Petrobras, indicated that the expansion of their international business will benefit from working in the Cuban area. The subsequent negotiations with the Brazilian oil company are actually worrying the US, since Petrobras is a leader in off-shore drilling in deep waters. Foreign investment was also facilitated, with the formation of 45 blocks of 140 to 6,000 km 2 in land or in shallow waters spreading alongside the whole national territory. During this period, CUPET has also begun the exploitation of natural gas reserves and has built a treatment plant in Boca de Jaruco, 35 km east of Havana. It has also established a pipeline to supply natural gas to private homes and has founded, together with Sherritt International ENERGAS SA, to clean associated gas from Varadero and Boca de Jaruco. US interests Advances in the Gulf of Mexico could take Cuba out of the economic dark ages and away from energy problems due to successive failures after the collapse of US supplies in 1960 and Soviet partnership in 1990. And if the EEZ proves successful, powerful lobbyists in the United States might demand to end or to keep the embargo (which Cubans call blockade). But the dark side of these successful events concerning oil and gas in Cuba is that the controversy with the US could grow and hence endanger national security. John Kavulich, President of the US-Cuba Council for Economy and Trade, surmised that US companies are likely to pressure the Bush administration. The embargo, he said, is a hurdle to operations that contribute to energetic safety in the US, especially concerning the supplies to the state of Florida with a two billion USD annual income (as predicted by a 2001 survey that was ordered by the Cuban Policy Foundation – paradoxically, an organization of Cuban businessmen in Florida). Although the Cuban government has confirmed that there are no limitations for American companies to explore and drill

oil reserves in the EEZ for mutual benefit, Castro has argued for a rational use of the remaining hydrocarbon reserves during a Chilean TV-interview. It is a statement some people in the Bush administration will find hard to accept. And this is why the Gulf of Mexico projects an ambivalent future: While the Cuban EEZ in the Gulf of Mexico looks like a remarkable business to anybody, it is also a huge risk due to Washington’s greed for the world’s hydrocarbons. Carlos Iglesias (1945) grew up and studied in Havana, where he continues to live and work. After earning his Havana University degree in Political Science, he worked as a journalist at Prensa Latina News Agency for 11 years as a correspondent in China, North Korea and Japan. In the 1970s and 1980s he worked in these places as an editor and Asian Bureau Chief. Currently he is working for Cuban TV, as well as for the Japanese newspaper The Yomiuri Shimbun, Miami-based Progreso Weekly and World Data Research Center.

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US hostility against Cuban sovereignty and independence developed before any Communist country existed, persisted during the USSR’s lifetime and intensified after the collapse of Eastern Europe. This hostility has grown worse as the Gulf of Mexico has become one of the most important oil basins in the world, as confirmed by recent scientific data. Now that Cuba has established Exclusive Economic Zones (EEZ) in the Gulf of Mexico, Carlos Iglesias claims that they could function as a “merging frontier”.

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- EEZ’S BLOCKS AREAS (km 2)

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- < 1,000: 1

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2,000: 49

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3,000: 6

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4,000 : 2

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- > 4,000 : 1

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- EEZ’S BLOCKS DEPTHS (m)

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- < 1,000: 17

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2,000: 23

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3,000: 10

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4,000: 3

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- Source: The Oil Industry in Cuba

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- Photos______________________________________________________________

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- Fulguro - consists of Cédric Decroux (1976), Axel Jaccard (1977) and Yves Fidalgo (1976). They live and work in Lausanne, Switzerland. Their work includes industrial design projects as - well as visual communication for clients such as the Bouroullec brothers or Expo.02. Their - work has been exhibited widely, e.g. at the Basta gallery in Lausanne in 2003, where they - presented auto-edited pieces of furniture and objects. Presented on this and the previous page is their conceptual photo series “Territories” (2004). www.fulguro.ch - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Cuba could receive many benefits from the crude oil beneath the Gulf’s waters, as international market prices have often forced huge disbursements. During 2002, when crude oil prices were 35 US$ a barrel, Cuba had to spend 500 million US$ more than planned, which became a strong ballast for national economic growth. Thus, when oil is mentioned, Cubans stop being open and talkative and behave as if their guests were all spies and enemies. This silence speaks volumes, especially as the sole world superpower, the same that has been harassing Cuba for the last 45 years, is merely 144 km away. Discretion is also justified since George W. Bush’s administration, maybe the most ruthless since 1959, seems ready to do anything to control the so-called black gold, monopolizing hydrocarbon reserves before they will be fully exhausted.

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Cuban oil

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The history of prospecting oil in Cuba dates back to 1881, when a natural naphtha deposit was found in Motembo in the centre of the island. And yet exploration was limited until 1960, when the oil industry was nationalized and Cubapetróleo SA (CUPET) was born. Prospects were extended and new reserves were found, mainly in Varadero, a famous beach resort 150 km east of Havana. Varadero is today Cuba’s main oilfield with proven reserves at two billion barrels and located in the Northern Oil Province of the island, Cuba’s Heavy Oil Belt. (The Northern Oil Province’s daily production is stabilized at 65,000 bpd of crude oil and 1,8 million m 3 of natural gas.) The 112,000 km 2 big Cuban EEZ in the Gulf of Mexico, being actually bigger than the national territory (110,860 km 2) and today divided into 59 blocks with an average of 1,900 km 2, saw its ribbon cut under good auspices during the Jimmy Carter administration in Washington. On January 26th, 1976, the United States, Mexico and Cuba agreed to share the troubled waters according to Maritime Law, and yet this agreement has never been enforced. Washington’s hostility against Havana led to the opening of the US Interest Section in Cuba. Equipped with official licenses and prohibited from spending money on the island, as this was considered “contact with the enemy”, American citizens travelled to the neighbouring Caribbean nation in great numbers. Since 1991, Cuba has been promoting foreign investments in key sectors of its economy. In 1995 a flexible Foreign Invest-

ments Bill was approved by the National Assembly (parliament), with many legal advantages based on modifications to the Constitution three years before. In 1999 CUPET, which serves the branch at the Ministry of Basic Industry for exploration, production, refinement, distribution, store, trade and service in the oil sector, opened the Gulf of Mexico EEZ to foreign investments, with promising perspectives of success for partners. Exploring the Gulf of Mexico According to experts, the Cuban EEZ contains huge potential for light oil. The Geophysical Congress in Havana (2001) noted, for instance, that the Cuban EEZ could hold four structures with reserves for 2-4 billion barrels. This is not a big surprise, since the Cuban EEZ is close to other oil areas in the Gulf of Mexico, which are known for high production as well as proven results. By 2006 they will represent two thirds of daily yield, supplying some additional 440,000 bpd, as the US Department of Interior has noted. Cuban authorities are aware that there is a market for crude oil and natural gas and have therefore developed attractive contracts, in which only minimal commitments are asked from foreign partners, who are primarily asked to explore resources and not to invest money. A simple and flexible fiscal regime allows them to retrieve invested money within a short period, but without royalties or taxes to export benefits and other facilities. These perspectives seem to balance out the climatic, economic, natural and mainly political risks in exploring the Gulf of Mexico. After all the Cuban EEZ has already attracted several investors. In fact, ten blocks at the EEZ and nine in land or shallow waters have been presently licensed to Canadian, European and other companies. Foreign investors Amidst those partners is Repsol-YPF from Spain, which has already reported the beginning of drilling in April by using the Norwegian oilrig Erickraude, the biggest in the world. Antonio Molina, the Chairman of the Spanish company, stated that those areas involve high risk (due to depths of up to 3,000 m in the licensed blocks). But Repsol-YPF was optimistic. The Spanish oil company hopes to increase profits by operating in six blocks of the main Caribbean island’s EEZ, as the successful example of the Canadian company Pebercan has shown. Other successful

partners for Cuban oil include Sherritt International, that won licenses in four of the EEZs’ blocks, and China Petrochemical (SINOPEC), that signed a Memorandum of Understanding with CUPET to explore four blocks. A speaker of the second most important Chinese oil company said that they were going to investigate those blocks and will decide then, whether or not they will sign a prospecting contract. Meanwhile, Jose Eduardo Dutra, the Chairman of the Brazilian state-run oil giant Petrobras, indicated that the expansion of their international business will benefit from working in the Cuban area. The subsequent negotiations with the Brazilian oil company are actually worrying the US, since Petrobras is a leader in off-shore drilling in deep waters. Foreign investment was also facilitated, with the formation of 45 blocks of 140 to 6,000 km 2 in land or in shallow waters spreading alongside the whole national territory. During this period, CUPET has also begun the exploitation of natural gas reserves and has built a treatment plant in Boca de Jaruco, 35 km east of Havana. It has also established a pipeline to supply natural gas to private homes and has founded, together with Sherritt International ENERGAS SA, to clean associated gas from Varadero and Boca de Jaruco. US interests Advances in the Gulf of Mexico could take Cuba out of the economic dark ages and away from energy problems due to successive failures after the collapse of US supplies in 1960 and Soviet partnership in 1990. And if the EEZ proves successful, powerful lobbyists in the United States might demand to end or to keep the embargo (which Cubans call blockade). But the dark side of these successful events concerning oil and gas in Cuba is that the controversy with the US could grow and hence endanger national security. John Kavulich, President of the US-Cuba Council for Economy and Trade, surmised that US companies are likely to pressure the Bush administration. The embargo, he said, is a hurdle to operations that contribute to energetic safety in the US, especially concerning the supplies to the state of Florida with a two billion USD annual income (as predicted by a 2001 survey that was ordered by the Cuban Policy Foundation – paradoxically, an organization of Cuban businessmen in Florida). Although the Cuban government has confirmed that there are no limitations for American companies to explore and drill

oil reserves in the EEZ for mutual benefit, Castro has argued for a rational use of the remaining hydrocarbon reserves during a Chilean TV-interview. It is a statement some people in the Bush administration will find hard to accept. And this is why the Gulf of Mexico projects an ambivalent future: While the Cuban EEZ in the Gulf of Mexico looks like a remarkable business to anybody, it is also a huge risk due to Washington’s greed for the world’s hydrocarbons. Carlos Iglesias (1945) grew up and studied in Havana, where he continues to live and work. After earning his Havana University degree in Political Science, he worked as a journalist at Prensa Latina News Agency for 11 years as a correspondent in China, North Korea and Japan. In the 1970s and 1980s he worked in these places as an editor and Asian Bureau Chief. Currently he is working for Cuban TV, as well as for the Japanese newspaper The Yomiuri Shimbun, Miami-based Progreso Weekly and World Data Research Center.

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Imprint

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Publishers:

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Nicolas Bourquin Sven Ehmann Krystian Woznicki

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Lectors:

Acknowledgements:

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Silvia Kaske Oliver Mechcatie

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hartware medien kunst verein medien_kunst_netz dortmund

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Silke Albrecht Arántzazu Sánchez Belastegui Hans D. Christ Iris Dressler Hansjakob Fehr Álvaro F. Fernández Karolina Golimowska Uwe Gorski Stefan Kainbacher Alex Kroke Abigail Messitte Katrin Mundt Annika Remter Juliane Zöller

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This reader is published in the context of the exhibition "So wie die Dinge liegen" / scene: schweiz in nrw

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May 1st - July 4th 2004 PhoenixHalle Dortmund Hochofenstraße / Ecke Rombergstraße Dortmund Hörde Germany

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Publishing house:

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etc. publications Schönhauser Allee 167 b 10435 Berlin Germany www.etc -publications.com info@etc -publications.com

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Distribution:

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Vice Versa www.vice - versa - vertrieb.de info@vice - versa - vertrieb.de

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Support:

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hartware medien kunst verein Kulturbüro Stadt Dortmund Ministerium für Städtebau und Wohnen, Kultur und Sport des Landes NRW Pro Helvetia - Schweizer Kulturstiftung

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Media partners:

© 2004

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Camera Austria Springerin by the authors, the artists, and the publishers. All rights reserved. No part of this publication may be reproduced or transmitted in any form without the written permission of the copyright holder.

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