Sage Publications, Inc

The Global Panopticon?
The Neoliberal State, Economic Life, and Democratic Surveillance

Author(s): Stephen Gill
Source: Alternatives: Global, Local, Political, Vol. 20, No. 1 (Jan.-Mar. 1995), pp. 1-49
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2 (1995), 1-49
Alternatives
TheGlobalPanopticon?
TheNeoliberalState,Economic
Life,and Democratic
Surveillance
StephenGill*
One impoverishes the questionof powerif one poses it simplyin

termsoflegislationand constitution . . . thestateand thestateap-
paratus.Power is ... more complicated, denseand pervasive. . . . It's
to
impossible get the development of productive forcescharacteris-
ticof capitalismifyou don't at the same timehave apparatusesof
power.. . . The systemof powertakesa pyramidical form.[The
apex] and the lower elements of the hierarchy standin a relation-
ship of mutual support and conditioning. . . . The bourgeoisie. . .
construct[ed] machinesof powerallowingcircuitsof profit, which
in turnre-inforced and modifiedthepowerapparatusesin a mobile
and circularmanner. . . techniquesofpowerare inventedto meet
thedemandsof production... in thebroadestsense- it can be a
matterofthe"production" ofdestruction, as withthearmy.. . . The
powerofthebourgeoisie
is self-amplifying,
in a mode not of conservation
butofsuccessivetransformations.1
Manyofthedominantdiscoursesand practicesofworldorderappear
to be constitutedbywhatI call "disciplinary This dis-
neoliberalism."
coursecontainselementsofa "newconstitutionalism": newlegal and
constitutionalpractices,linkedto the reconstitution
of capital (and
labor) on a worldscale.2
It also involves
newinnovations inworkplace
and everyday formsof social controland discipline.That is to say,
thereare connectionsbetweenthe processesof economicglobaliza-
tion,and thewaytheoutlook,expectations, and socialchoicesof in-
dividualsand groups are being reshaped and reconfigured.The
powerof capital,and the capitaliststate,operatesat macro-and
*Departmentof PoliticalScience,YorkUniversity,
NorthYork,Ontario,M3J1P3, Canada.

2 TheGlobal ?
Panopticon
micro-levels withinas wellas acrossdifferent territorial

jurisdictions.
One keyelementof the emergingworldorderis the contradictory
growthin thestructural powerofcapital,notablyinternationally mo-
bile capital.By"structural" I meanin thesensethatBraudelwroteof
historicalstructures: the cumulativepatternsof discretebutinterre-
latedactionsbyindividuals, whichmaybecomeinstitutionalized over
time.These patternsof actions,expectations, and institutions form
thesocialstructures thatshape "thelimitsof thepossible"fordiffer-
ent groups,classes,and nations- limitsthat are shaped by,and
therefore changeas a resultof,collectivehumanactionin the mak-
of
ing history.3 Here it is importantto takeaccountof social forces
challenging ethicsand social implications
the of disciplinaryneolib-
eralism- and not all of theseforcesare progressive. Indeed, many
are associatedwithreaction,authoritarianism, and neofascism.
This essaysketchesselectedaspectsof thesetendencies,especially
withrespectto mutationsin stateand civilsociety.In particularI
highlighta neoutilitarian aspectto the restructuring of stateforms
and worldorderpossibilities. Othertendenciesare relatedto thein-
novationand intensified applicationof practicesof surveillancein
thepoliticaleconomy,or "panopticism." These involvenewlevelsof
technologicalsophistication applied instrumen tally,forpurposesof
social control.For our purposeswe can treatthe panopticonas a
dystopialatentin modernity: thepossibility ofdevelopinga system of
controlthatreducesthe individualto a manipulableand relatively
inertcommodity.
The introduction of information technologyin general,and sur-
veillancecapabilitiesin particular, in the contextof the growingin-
fluenceofneoliberaldiscourses, is oftenintroducedbyand mayfavor
internationally mobilefractions of capital,especiallycorporatecapi-
tal and financialservicesfirms.The tendencyof thesefractionsof
capitalis to deepen theiractivity withincivilsocietyand theeconomy
as wellas to internationalize as theyseekto maximizeprofits and off-
set risks.The use of surveillanceand sortingtechniquesformaxi-
mizingknowledgeabout and influenceover workers,savers,and
consumersappears to be growing.At the same time,when surveil-
lance and information technologiesare introducedin theworkplace
and in thewidersocietytheytendto provokebothresistance(e.g.,
neo-Luddism)and nihilism(e.g., computerhackersusingPentagon
computersto store pornography).These technologiesalso offer
some democraticpotentialifused withappropriateprocessesof ac-
countability and in thecontextof democraticcontrols.
Anotherkeyimpetusfor the wideninguse of surveillancetech-

Gill
Stephen 3
niquesis the internaland externalresponseof certainpoliticalele-

mentswithinstateapparatusesto problemsassociatedwitheconomic
globalizationand interstate rivalry,and in particularto the percep-
tion of the loss of control,regulatoryeffectiveness, or indeed au-
thority over economic activitywithin national boundaries. Whereas
mobilecapital is associated with the interdependence(or capitalist)
principleofworldorder,theterritorial and politicallogicofstatesur-
veillanceis oftenassociatedwith the reinforcement or persistenceof
nationalistblocs and security complexes. Such blocs mayseek to re-
strictor to channelthefreedomand mobility of such capitalforrea-
sonsofnationalsecurity.
Postmodernistideas concerningpower and surveillancehave
somethingto offerhere- forexample,Foucault'snotionof "capil-
larypower"operatingat theleveloftheindividual.However, to make
senseofsocialforcesdrivingthetransformation we need a morehis-
toricistand structural formof analysisthatis sensitiveto thenewdy-
namicsofchangeand has an adequate meansforintegrating capital
intothequestionof power.However,to acceptFoucault'sdefinition
ofthepowerofcapital(thebourgeoisie)as "self-amplifying" (see the
beginningquotation)would not onlymean definingthe powerof
capitalin an unproblematic and nondialectical manner(becausecap-
ital,bydefinition, is constituted and givensocialidentity bya classre-
lation: capital presupposeslabor and indeed, in the quotation,
Foucaultimplicitly acknowledgesthis);it would also, in effect,sug-
gest that we were movingtowardthe "end of history."Indeed,
Foucault'sworksuggeststhatthisoccurredlong beforetheWestern
triumphalists of thelate 1980sbegan to appropriateHegel. This def-
initionwouldmean thatwe livedour history as iftherewerea single
of
agent change (the bourgeoisie) and thatthe powerof thisagent
would continueto unfoldideologically.So in some waysthisessay
can be read as a contributionto a constructive critiqueof neo-
Foucauldian interpretations of what Nikolas Rose, an influential
Britishsociologist, has called "advancedliberalism."4
Panopticisttechnologiesof powermaytend to reinforcedefini-
tionsand practicesofsocialcontrol,buttheirimpacton worldorder
is contradictory. Such contradictions are rarelyraised in the neo-
Foucauldianliterature. Moreover,the propositionsand evidencein
the restof thisessaysuggestthatthe degreeof "relativeautonomy"
and thedemocraticpossibilities in (global) civilsocietyofusingnew
technologies for liberation can be overstated and represented too op-
timistically,as it is by theoristssuch as James Rosenau and Ronnie
Lipschutz.5 Myownviewis thatsuchoptimismneeds to be tempered

4 TheGlobal ?
Panopticon
bya moresustainedconsideration ofhowthesenewtechnologiesare

being used to increase exploitationand oppression.
My substantive purposein thisessayis to generatea numberof hy-
pothesesconcerningwaysto explainand to challengesuchexploita-
tion and oppression.My hypothesesare made withreferenceto
changingpatternsofsocialpower,formsofstateand civilsociety, and
the emergingworldorder.I drawprincipally on examplesfromthe
UnitedStates,withitsparticularstate-civil societyconfigurationand
high level of technologicaldevelopment. In some if
ways, present
trendsare allowedto go unchallenged,social developments in the
UnitedStatescan be viewedas theharbinger ofourcollectivefutures,
althoughwe shouldalso be awareof "Americanexceptionalism." In
importantrespects the United States is unlike any other society,
partlybecause of itsuniversalappeal, and partlybecause it is so eth-
nocentricand inward-looking. Of course,onlyhypotheses of limited
applicabilitymaybe producedby thisfocus upon particularcivi-
a
lizationalpattern,one thatencompassesCanada and now Mexico,
whichare bothin significant respectsquitedifferent fromtheUnited
States.Nevertheless, theUnitedStatesas a politicaleconomyand as
a nationis centralto theglobal politicaleconomy.Moreover, in the
post-ColdWarera,theroleof theUnitedStatesas themilitary guar-
antor of disciplinaryneoliberalism has been re-emphasized.
Consequently, developments withinand radiatingfromthe United
Statesare ofprimary importance fortherestoftheworld.To develop
myhypotheses I firstattemptto outlinetendenciesrelatingto there-
configuration ofneoliberalformsofstate.
HybridFormsoftheNeoliberalState
StateForms:Hobbes,Locke,and Bentham
Keesvan der Pijl has writtenoftheglobaleclipseofthe "Hobbesian"
formof state/'ThomasHobbes's Leviathan(1651) depictedan abso-
lutistformofstatedesignedto centralizesovereigntyin orderto pro-
motecapitalaccumulationand/orto preventsocialunrestexploding
intocivilwar.7
Van der Pijl contrasts
thiswiththerivalstateform,the
Lockeanstate,and civilsociety,modeledin parton the TwoTreatises
on Government(1690) publishedjust aftertheGloriousRevolutionof
1688.8The Lockeanstateform,he argues,is increasingly supplanting
the Hobbesianformsas global competitionbetweenstateformsin-
tensifies.
Accordingto van der Pijl,partlybecauseof thegreatinflu-

Gill
Stephen 5
ence ofJohnLocke's thoughtin foundinga new stateformin the

UnitedStates,and partlybecause of thepowerand influenceof the
US government and society,the Lockean model is now tendingto-
wardplanetaryreach,a conclusionthatoverlapswiththoseof Rose
and FrancisFukuyama.Wherevan der Pijl differsis thatthe "ad-
vancedliberal"or Lockean stateformis not viewedas the sole and
singlealternative modelforemulationnor as the "end"of history.
Since themid-1970s, the capitulationof theformerSovietUnion,
and theswift attempt introducetheself-regulating
to marketsociety
in easternEurope and otherformercommunist states(and in parts
of the Third World) appear to have regeneratedthe processesof
primitive accumulationof capitalwithinthiswider"Lockean"frame-
work,althoughthe introduction of the marketin the formerSoviet
Union has not been accompaniedbytheextensionof property-own-
ing democracyon a broad basis.On the otherhand, the emerging
stateformsin East Asia,notablyin China,Japan,and SouthKorea,
hardlyconformto theLockeanmodel.
In theLockean,quintessentially liberalstate,theproblemand prac-
tice of government is premisedupon a relatively vigorousand au-
tonomouscivilsociety. Thisis groundedin "naturalliberty," whichfor
Locke was the freedomgrantedto humansby God. The Lockean
state'slegitimacyand authority wouldbe foundedupon politicalcon-
sent(Lockesawabsolutism as a stateofwaron society)and therecip-
rocalrightsand obligationsof therulersand theruled.The basisof
politicalparticipation was bothnaturallaw (freedom,includingthe
freedomtoformsocietiestoprotectnaturalrights)and property, a key
socialinstitutionin a liberalsociety.Because of the radicalismof his
consenttheory, Lockewasdistrusted bythearistocraticoligarchy ofhis
time,and so cannotbe regardedas the (sole) theorist oftheGlorious
Revolution, whichwasa politicalsettlement betweenthelandedgentry
and theurbanmercantile classesto enable themto sharepowerwith
the Crownand, in effect, presideovera revolutionof the powerful
againsttheweak.Moreover, especiallybecauseofitsconcernwithpo-
liticalorderand theneed to disciplinethesubordinate classesin town
and country, theBritish stateafter1688had somevery"Hobbesian"el-
ements.Theseelementslookedbacktowardcivilwarand in fearofre-
newedradicalism and peasantrevolt,and as welllookedto thefuture,
wherethepropertied wereto be morefullyempowered:
The defeatof theradicalsduringtherevolution

thushelpedto
hardentheformationofEnglandintotwonations.
Before1640the

6 TheGlobal ?
Panopticon
majorsocialdivision
hadbeenbetween andunprivileged;
privileged
nowitwasbetween richandpoor,freeandunfree,thearmigerous
andthedisarmed, thosewhocommanded themilitia
andthosewho
wereconscripted tofight those
overseas, payingforand thosesub-
jectto thePoor Law.9
Althoughpunishmentforcrimesagainstpropertybecame increas-
inglysevere,by 1714 Protestant dissentwas tolerated,and heretics
were no longer burned at the stake.As ChristopherHill put it,
"Christianityand sovereignty
ceased to be dependent,fortheirvalid-
ity,on the hangman."10 There was a general shiftin literarycon-
sciousness,as the "tortureddoubt"of Shakespeare'stragediesand
thepoemsofJohnDonne gavewayto the "superficial certainties"
of
AlexanderPope. Therewerenewassumptions about societyand the
universe.Newtonianmechanicsand the theoryof universalgravita-
tion,forexample,depictedthe universeas a self-moving machine,
and thecategoriesoftime,space,matter, and motionassociatedwith
modernsciencebegan to emerge.11
Accordingto Hill,by1714Englishpoliticsbecamecharacterized by
"rationalenquiry"and was discussedin termsof utility, experience,
and commonsense.The ideas ofLocke and Isaac Newtonbecamees-
peciallyinfluential.Suchwasthisrationalism thatin 1712thepostrev-
olutionary BritishParliament establishedfreetradein slaves.The
politicalsettlement of 1688was good forbusiness,especiallyforthe
"moneyedinterest," whichgrewin powerrelativeto landedinterests.
The Bankof Englandwas createdin 1694 and consolidatedthealle-
gianceof the "moneyed"to therevolution of 1688 bymakingit easy
to lend to the government on profitabletermsand in fullsecurity.
This formof businessconfidencein the policiesof the government
generatedthefinancingofa longwarofattrition againsttheFrench;
thereafter, wars were foughtto furtherBritishtradinginterests.
Moreover, publicfinancewasputon a sounderfootingwithan enor-
mous increasein effective taxation,and parliamentary (not monar-
chical) controloverfinancewas established.12 On questionsof risk,
production,and labor, modern fire insurancewas inventedin
EnglandafterthegreatfireofLondonin 1666;theemergingscience
of statistics
made lifeinsurancepossible;a moderndivisionof labor
and industrial development wasencouragedbyParliamentas itgrad-
uallyremovedimpediments to themobility oflabor to allowemigra-
tionto thecitiesand thuslaborforurbanproduction.Nevertheless,

Gill
Stephen 7
all ofthischangebenefitted thepowerful and thepropertiedin a so-

cial and politicalrevolutionagainstthedisenfranchised poor.
The Lockean constitutional modelis evenbetterexemplified in the
US Constitution. In orderto securetheconsentofagrarianinterests
in thesouthernplantations, thefirstUS Constitution countedslaves
as property, and slave owners were allotted votes at the rateof two-
thirdsofa voteper slave. For Locke,consent, rooted in property, was
therationalfoundationfortheconstitution of social order, and con-
sentwas understoodas an ongoingpoliticalprocess.Nevertheless,
consentcould neverabolishcertainprimary naturalrightsforLocke
-
becausethese life,liberty, -
and property werethefoundations of
politicsand theprocessof consentitself,rightsthatcannotbe given
up by"reasonable"people. Slaverywasnotconsideredan aberration
fromtheseprinciples.As Adam Smithnotedin 1776 at the birthof
theUS republic,"civilgovernment, so faras itis instituted forthese-
curityof property, is in realityinstituted forthe defenceof the rich
againstthe poor,or of thosewho have some property againstthose
whohavenone at all."13
Van der Pijl's argumentcontainsan important conceptualinnova-
tion,especiallyin thewayit reflectsa need to thinkthroughthe re-
lationbetweenstateand civilsociety,and in the wayit reflectsthe
process of the broad empowermentof the propertiedthat has
emergedin recentdecades,aftera periodofwelfare-nationalism and
socialprotection.On theotherhand,van der Pijl'sLockeanconcept
does not go farenoughin analyzingthe transformation of capitalist
state-civil
society formations. Firstof all,it is too broad to accountfor
thevariations in state-civil societyformations, and may overstate the
degree of actual,as opposed to theoretical, convergence toward the
Lockeanframework (forexample,thereare significant variationsin
thestate-civilsociety forms within Scandinavia, between Scandinavia
and southernEurope, betweenGermanyand France,and between
each of these nations and Holland and England). Second, the
Lockeanformpresupposesa relatively autonomousformof civilso-
ciety witha of
highdegree self-regulation ofsocialand economicac-
and
tivity, thus of indirect forms of market disciplinein civilsociety.
However,in thekeycenterofwhathe calls the "Lockeanheartland"
(theUnitedStates),one mightsuggestthatsuchdisciplineis bothdi-
rectand indirect,and civilsocietyis farfromself-regulating. This is
also truein muchof westernEurope and certainly in Japan.Third,
argumentsabout the liberalformof statewere made not onlyby
Britishtheorists,but also by French and US writers,such as
Montesquieu,theUS federalists, Constant,and de Tocqueville.Also

8 The GlobalPanopticon?
influentialin thedevelopment ofBritishliberalismwereAdamSmith

andJohnStuartMill.
Operatingalongsidetheseliberalcurrents, especiallyin the nine-
teenthcentury, was utilitarianism, reflectedin thewritings ofJames
Mill (fathertoJ. S. Mill) and, of course,Jeremy Bentham,who Marx
and Engelsviewedas the theoretician of an underdeveloped, emer-
gentbourgeoisie.Nevertheless, Marx and Engels,writing in 1845and
1846, saw Bentham's utilitarian JamesMill,
successor, who more fully
developedthetheoryofutility in politicaleconomy, as thetheoristof
"theruling,developedbourgeoisie."14
Althoughtheyregardedhimwithcontempt, Marxand Engelssaw
Benthamas crucialto the developmentof economicaspectsof the
theoryof exploitation, whichtheythoughthad been neglectedin
France. Marx mocked Benthamas the "insipid,pedantic,leather
tonguedoracleoftheordinary bourgeoisintelligence ofthe19thcen-
tury... a purelyEnglishphenomenon," who tookthe "modernshop-
the as
keeper,especially Englishshopkeeper, thenormalman.. . . This
yard-measure he applies to past,presentand future."15 In a heavily
ironicpassagein thefirstvolumeof Capital(1887), Marxcanonized
Benthamas one of the fourmusesof the capitalistlabor market,
whichwas:
a veryEden oftheinnaterightsofman.Therealone ruleFreedom,

Equality,Property and Bentham.Freedombecausebothbuyerand
sellerof a commodity, sayof labour-power,
are constrainedonlyby
theirownfreewill.Theycontractas freeagents,and theagreement
theycome to is buttheformin whichtheygivelegal expressionto
theircommonwill.Equalitybecause each entersintorelationwith
the other,as witha simpleownerof commodities, and theyex-
change equivalentforequivalent.Property because each disposes
onlyofwhatis his own.And Bentham,because each looksonlyto
himself.The onlyforcethatbringsthemtogetherand putsthemin
relationwitheach otheris theselfishness, thegain and theprivate
interestsofeach ... in accordancewiththepre-establishedharmony
of things,or underthe auspicesof an all-shrewd providence,work
together to theirmutual advantage,forthecommon wealand in the
interestofall.10
Marx'sironyperhapsoverstatesthedegreeofnaturalism and piety

in the outlook of the "English shopkeeper." Moreover, the
Benthamitetheoryof the stateis in some sensesless individualistic

StephenGill 9
and minimalistthan its earlyliberalprecursorsor indeed thatof

someofBentham'scontemporaries. Asis hintedabove,ithas someof
itsaxiomsassociatedwithFrenchrationalism, suchas Helvétius,and
theFrenchRevolution.Indeed,thekeyto Benthamite politicalecon-
omy was the stresson theneed fora strong(but not necessarilylarge)
governmental apparatusand stateplanningto sustainthe freemar-
ket,especiallya freelabormarket.Benthamwasoftheviewthatwhile
freetradeand competitionweregenerallyproductive, the "unseen
hand"and AdamSmith's"simpleand naturalliberty" needed a large
administrative apparatus.Free traderequireda centrally organized
and controlledinterventionism. Moreover, as AdamSmithhimself ac-
knowledged,"security" was more importantthan "opulence."The
freedomof the unseen hand needed to be weighedrelativeto na-
tionalsecurity. "Security"requiredscientific estimatesof the poten-
tialforexternalchallengesfrommilitary and commercialrivals,as
well as potentialthreatsto stabilityfromwithin - as well as police.
This dependedupon systems to classify
and to organizepopulations
and tomeasuretheiractivity. Bentham'sfavorite phraseforpublicad-
ministration and productionwas "inspectability." In theory, ifnot in
practice,the Benthamitestatewas requiredto intervenestrongly in
civilsocietyto help promotethe "generalhappiness"goal. This im-
plied theneed to ensuresocialorder,and to construct botha super-
structure and an infrastructureof socialand politicalsurveillancein
orderto modify behaviorand to promote"good"acts.
The latteraspectof Bentham'sthoughthas been highlightedby
MichelFoucaultin Discipline and Punish(the Frenchtitleof which,
SurveilleretPunir,is moresuggestive of itscontent).17This book was
partlyinspired by Bentham's idea of the Panopticon. Foucaulttook
thisidea as a metaphorfor the discourses,or theoretical-practical
structures of surveillancein nineteenth-century societies,across a
range of social institutions
such as medicine, crime and penal re-
form,sexuality, and urbanplanning.Foucaultarguedthattheidea of
surveillanceis applicable to both capitalistand socialistformsof
state.It wascentral,forexample,to theideas and practicesthatcon-
stitutedthe FrenchRevolution,whichFoucaultcalled "disciplinary
power."People would be immersedin the collectivegaze, the dis-
courseand the activity of others,and as such would be prevented
fromunharmfulacts, takingaway theirdesire and possibilityof
wrong-doing.18
As not onlyBentham'sbut also Karl Polanyi'sworksuggests,sus-
taininga possessively individualist
societywitha highdegreeof eco-
nomicfreedommayrequiresophisticated formsofstatesurveillance

10 TheGlobal ?
Panopticon
of the populationon an ongoingbasis (throughcollectingdata in

censuses,healthand crimerecords,plus ongoingmonitoring ofpat-
ternsof economicactivity, forexample) as well as attemptsto nor-
malizetheirbehaviorpatternsthroughdisciplinary discourse.Thisis
hardly what Locke had in mind as he reflectedon civilgovernment
in thedininghall of CorpusChristiCollegein Oxford,wherehe was
a Fellow.In thedininghall is a full-length portraitofHenryVIII, the
founderofthecollege.The imageofthekinghangsabove,and dom-
inates,the high table. Locke's oppositionto absolutemonarchyis
wellknown,and thisoppositionwasthefountofhisideas on natural
rights,therule oflaw,and constitutionalism.
Followingvan der Pijl's predilectionforascribingthe natureof
stateformsto Britishpoliticalthinkers, whatappearsto be emerging
as thedominantformofstate,then,is nota Lockeanstateper se, but
a hybrid, whichcontainsHobbesian,Lockean,and Benthamiteele-
ments.The precisemixturevariesin different state-civil
societycom-
plexesor in formsof whatGramscicalled the "extendedstate":the
interpénétration of politicaland civilsocietyin the formof state.
Privateassociations, as wellas socialinstitutionssuchas thefamily,ed-
ucation, and the church,are constitutedby,and interpenetrated
with,thegovernment or "politicalsociety,"and togethertheseform
theextendedstate.
Van der Pijl is absolutelycorrect,however, in thatcapitalaccumu-
lation has become a global process (centeredin the threemajor
poles of capitalismin NorthAmerica,WesternEurope, and East
Asia), and the identitybetweenparticularstatesand transnational
capital,as wellas betweenpoliticalauthority and territory,is becom-
ing more complexand less clear cut. There is an emergentglobal
civilsocietythatis to a largedegreedominatedbythepowerand in-
fluenceof theagentsof transnational capital.
Yetevenhere thesituationis complexand in somewayscontradic-
tory.Whereasproductionrequires,to a largeextent,a giventerritor-
ial base and labor force,the provisionof global financeand credit
(whichis a promiseoffuturepaymentin exchangeforthemeansto
acquireand to consumegoods and servicesin thepresent)appears
to be increasingly "globalized"and beyondthe controlof even the
mostpowerfulgovernments, as the massivescale of the financial
marketsand the swiftmovementof capitalwithrespectto currency
speculationclearlyimply.Financialcapital,particularly in theformof
the offshoremarkets,or Euromarkets, punishesquicklythose gov-
ernments thatdo notmaintaincontrolovertheirfinancesbya denial
of creditand/ora loweringof creditrating,whichmakesfinancing

Gill
Stephen 11
moreexpensiveto obtain.19 The vastscale and highmobility of capi-

tal,and the structure of expectationsthatencompassesthe largein-
stitutionalplayersin the markets,forma transnationalhistorical
structure, in the sense used byFernandBraudel.This structure and
its associateddiscursivepracticesacts to disciplinedeviationsfrom
the (deflationary) orthodoxyof neoliberaleconomicsand servesto
constitute the"limitsofthepossible"in matters ofglobalfinanceand
sovereign debt.
To a largeextent,theUnitedStatesis an exceptionto thisgeneral
ruleand is betterable to capitalizeon therisksand opportunities as-
sociatedwiththisstructure thananyothergovernment. In a senseall
countriesare disciplinedby the structuresof global finance,but
someare moredisciplinedthanothers.Nevertheless, thedisciplinary
structures associatedwithfinancialcapitaloperatewithin theUnited
States,and notjust from it.
At the same time,it shouldnot be inferredthatall governmental
apparatuseshavesimplylostthe capacityto controlcapitalmobility.
The freezingof Iranianassetsof US$14 billionaftertheIranianrev-
olutionin 1979illustrated theuniquecapacityoftheUnitedStatesto
intervenein, and exertsome directcontrolover,the international
bankingsystem.US national securityinterestsare still powerful
enoughto overridethe "particular" interestsof bankers.20
US inter-
ventioncapacities,in a quitedifferent manner,werealso revealedin
theBankofCreditand CommerceInternational (BCCI) scandal(dis-
cussedlaterin thisessay).
Taxes,Social Security,
Panopticism, and Crime:
SomeTendencies
Panopticonis a Greekcompositetermthatmeans"seesall."Foucault
describedthe principleof panopticismas "ensuringa surveillance
whichwould be both global and individualising
whilstat the same
timekeepingthe individualsunderobservation"(throughthe illu-
minationofspace).21
Bentham's blueprintfor ThePanopticonortheInspection
House is well
known.It was intendedto ensure,throughthe all-seeingand domi-
natingeye of the warderfroma centralwatchtower, a transparency
thatwouldalso cause theinmatesof theprisonto exerciseself-disci-
pline,thatis to act,as itwere,as surrogatewarders.It dependedon
or possibility
the actuality, - a methodthat
of constantsurveillance
made thetechnology ofsurveillanceapparentlybotheconomicaland
effective
overa largesubjectpopulation.The panopticonwas never

12 TheGlobal ?
Panopticon
built;itwas,liketheeconomicsofAdamSmith,moreofan "imaginary
machine,"designedin the spiritof Newton.As Foucaultunderstood
it,thepanopticonmadepowerbothvisibleand unverifiable. However,
some Foucauldianshave suggestedthatthingshavegone further, to
thepointwheresurveillance is increasinglybeing builtintothe labor
processas wellas thefinancial(or actuarial)structures:
ithas become,
in thiscontext,bothmorevisibleand moreverifiable.22
The panopticonidea therefore antedatesboththedevelopment of
modernbureaucratic systems and the use of technical
innovations of
individualand mass surveillanceand data collection,such as com-
puterdata bases, satellites,bar-codescanners,and telecommunica-
tionsintercepts, associated,for example,withthe secretNational
SecurityAdministration (NSA) oftheUnitedStates.Some ofthistype
of surveillancetechnologymaybe quite beneficial,forexample,in
verifyingarmscontrolagreements, in monitoring the ecosphere,in
depleting rain in
forests, predictingclimatepatterns, and so on. Of
course,in no societyis there- or can therebe - a singleall-seeing
eye,althoughsome societiesseem to approacha broad surveillance
conditionwithregardto certainaspectsofstateactivity. A numberof
concernsare raisedhere,insofaras a democraticsocietyrequiresa
certaindegree of transparency and accountability in the creation,
storage,and use of a wide rangeof personalinformation. Such in-
formation would be necessaryforthe government to functioneffi-
cientlyas an allocatorand user of social resources,as well as an
agencyof regulationand planning.For example,in Swedenthereis
broad supportforthe idea thatthereshouldbe no freeridersand
thateveryoneshouldpaya fairshareoftaxesand supportsocialwel-
fareprograms. As DavidFlaherty has argued,thisgoeswiththeideas
ofpubliclyand privately mandateddata collection:
In Swedishsociety. . . thereis lessprivacy

availableforan individual
to enjoythanin otherwesternsocieties(outsideScandinavia).... A
centralnationaldata bank,knownas SPAR,containsforeach per-
son such varieddata as name,PIN [personalidentification num-
ber], address,citizenship, maritalstatus,assessedincome,taxable
capital,and possessionofreal property. A person'sincomeand net
worth,forexample,are regularlypublishedcommercially at the
countylevelfrompublicrecords;suchdata havepracticalapplica-
tions,suchas checkingcreditworthiness, buttheycan also serveto
a
satisfylarge dose of individual curiosity.'23

Gill
Stephen 13
However,thisis not the "1984" typesituationFlahertyseems to

implyin hisbook.Thisis because.Swedishsocietyis largelydemocra-
tic,pluralistic,and tolerant.The Swedishpracticesnotedabove rest
upon a broad-based social consensus,whichis largelyegalitarianin
outlookand is premisedupon the idea thatno responsiblecitizen
shouldhaveanything significant to hide fromanyoneelse. Not all of
theapplicationsofsuchtechnologiesare as democratic, accountable,
and sociallyconsensualas in the Swedishcase. Indeed, thesituation
seems repletewithambiguitieswithregardto constitutional free-
domsin thecountriesof the Organization for Economic Cooperation
and Development(OECD). In other contexts - for example, in
Singaporeand some East Asian societieswherepoliticaldissentor
variationsin life-styles are not tolerated - thistypeof social trans-
parencyand surveillanceis moreclearlyrepressive.
Nevertheless, thereseemsto be a growingtendencytowardthein-
creasinguse ofsurveillance capabilitiesbyliberaldemocraticstatesto
regulatethenewmarketsocietyand to exercisesocialcontrolin a pe-
riod of rapidsocial change.24 One hypothesis thatmighthelp to ex-
plain thistendency refers to the interplay between fiscalcrisisand the
globalization of financial markets. The rapid globalization offinance
fromthe 1970s onwardoccurredin the contextof short-term ele-
mentssuch as the recycling of petrodollarsin the Euromarkets fol-
lowing thefirstoil crisis in 1973, and in a more conjunctural sense to
the onsetof "stagflation" and a generaleconomicslowdownin the
1970s.In thiscontext,therewas a growingtendencyworldwideto-
warda fiscalcrisisof thestateas taxrevenuesrose moreslowlythan
thecostofgovernment expenditures suchas unemployment and so-
cial insurance.Thissituation wasmanifest at all levelsofgovernment,
frommunicipalto federal(thefirstmajorinstanceof thefiscalcrisis
of thestatein the UnitedStateswas in NewYorkCityin 1975). The
counterpart to thisdevelopment in theThirdWorldwastheso-called
"debtcrisis."
Partlybecause of the growthin theinternational mobility of capi-
tal, governments were pressuredinto providingan investment cli-
matejudged attractive by global standards (and the private credit
ratingagencieswereoftenthe arbitersof government creditworthi-
ness). In the 1980s an emphasis existed on the restructuring of the
state throughthe tacticsof marketization and privatization. The
1980ssawa periodof competitive tax-cutting initiated by the supply-
side policiesof the Reagan administration as it soughtto "reinvent"
government. This forcedother statesto respondby cuttingtheir
taxesor risklosinginvestment or financialservicesbusinessto lower

14 TheGlobal ?
Panopticon
taxjurisdictions.Moreover,as economicstagnationcontinued,gov-
ernmentshave had to pay increasedattentionto collectingtax rev-
enues (and raisingcash throughprivatization) in an age wherethe
ideology(but not the of
reality) the balanced budget(or of "financial
and
stringency" "prudence") has come to prevailin economicdis-
course.Especiallyin NorthAmerica,levelsof unemploymen as well
as householdindebtednessrose,particularly in the 1980s.These de-
velopments, alongwithreforms in socialsecurity and taxadministra-
tion,had the effect of binding workers to the structures
disciplinary
ofnotonlytheworkplace,butalso thefinanceand creditstructures,
and theglobalpoliticaleconomy,underthegeneraland intensified
surveillanceof thestate.
Manygovernments have investedheavilyin new technologiesto
createthe meansto build and to manipulatedata bases fortax col-
lectionand, morebroadly,forpurposesof social controland crimi-
nal enforcement. Indeed, a proposalwas mootedby the European
Bank for Reconstruction and Development(EBRD) to transform
largesections of the former Red Armyintotaxcollectorsin crime-rid-
den Russia.This typeof developmentis intendedto maximizethe
state'ssurveillanceof the population,partlyforeconomicreasons
and partlyforreasonsofpolicing,becauseone objectiveof thistype
of exercise,as is clearin Russia,is to gain information about the so-
called "secondary"or "informal" economy,whichis outsideof the
scope of officialtax collection.Of course,thisis not a problemfor
Russiaalone,butforall governments thatexperiencefiscalcrisisand
widespreadorganizedcrimeand corruption.Much of theworkthat
has gone intothe "reform" effort in theformerSovietUnion bythe
international financialinstitutions and theWesterngovernments has
been concernedwiththe construction of more effective data bases
and populationprofiles.
Muchofthedemocraticconcernexpressedat thecreationofmass
databaseshas arisenin OECD contexts wherethepoliticalconditions
are different thanthosethathave prevailedin Scandinavia.For ex-
ample,the practiceof file-matching (such as comparingsocial secu-
rityfileswith tax filesto check on fraud) is verycommonin the
UnitedStatesand Canada, and relatively commoninJapanand the
UnitedKingdom,althoughofficialsecrecyin theUK meansthatit is
impossibleto be sure.Partoftheconcernis promptedalso bythein-
accuracyof data held in these systemsthroughoutthe world.25 In
Canada,forexample,thereis littlepublicconcernat thesedevelop-
ments,whereastheyhave been veryimportantpoliticalissues in
Germany(wherefile-matching is more controlled)because of the

Gill
Stephen 15
legacyof Germany'sNazi pastand thusthe politicization of civilso-

cietythere. There have also been protestsin the United States,be-
traditions.20
cause ofitsanti-statist
In Japan, there have been sporadic attemptsto challenge the
Japanesestateon theuse (and abuse) of thistypeof data manipula-
tion,and civillibertarians inJapancontinueto challengetheseprac-
tices.For example,whentheemperorand empressofJapanmade a
controversial visitto Okinawain May 1993 therewere manycom-
plaintsfrom peoplewhohad been detainedor arrestedon pretexts by
thepolice,and bypeoplewhoweredeniedaccessto areasadjacentto
theroutetheroyalfamily tookto thesouthernmost Japaneseislands.
Okinawa, which was once colonized byJapan,was the siteofferocious
battleswhen the United States invaded the country(more than
250,000died in thesebattles). Manyinhabitants feltthatOkinawawas
sacrificedin thevainattemptto preventthevictory of theUS forces.
Sincethewar,ithas been relatively neglectedand impoverished, even
afterits reversionto Japanesesovereignty in 1971. In effect,the
Japanesesecurity agenciescarriedout a selectivedetentionof some
membersof thepopulation.Thiswas ostensibly to preventterrorism
againsttheroyalcouple.The informational basisforthelocationand
of individualsis a highlydevelopedand totallycomprehen-
activities
sivelocal registrationsystembased on families,linkedto local net-
works of surveillance, which originated about 1000 years
ago- systems ofregistration thatwereadaptedfromthoseofancient
ImperialChina.Thesesystems werereformed and perfected following
thecreationof theMeijistate,aftertheimperialrestoration of 1868.
The Japanesecase showsthelong lineageof panopticist practicesby
thestate,and theinformational base uponwhichtheyrest.
A case studyofAustralia, whichis in manywaysa typicalliberal-de-
mocraticsocietyoftheLockeantype(alongwithCanada, theUnited
Kingdom,and the UnitedStates),illustrates aspectsof the general
trendI have noted. Australiahas recentlyexperiencedfiscalcrisis
and a change in the politicallandscape,especiallyas politicaldis-
courseshiftedawayfromsocial democracytowardconservatism and
neoliberalism. The economywas liberalizedin the lasttwenty years,
and the law enforcement, taxation,and government benefitsagen-
ciesgainedincreasedpowerwithinthestateapparatus.The socialse-
curityministry shiftedto morerigorousmonitoring ofitsclients,in a
returnto the typeof methodakinto thereforms thatBenthamand
otherutilitarianliberaladvocatedforpaupers,premisedupon "in-
spectability"ofclaimsand obligations. Australiaincreasingly usesfile-
matching,whichis facilitatedby computerization. The Australian

16 TheGlobal ?
Panopticon
system wasintegrated and linkedto theintroduction ofthemulti-pur-

pose tax-filenumber (TFN) system, which servesan identification
purpose similar to the Canadian SIN (social insurancenumber)arid
theUS SSN (social security number).27 Similar developments can be
observedin theUnitedKingdom,wherethepolice,security services,
inlandrevenue(tax), and thehealthand welfareadministrations are
reputed to have integrated data-base systems. The popular climate
encouragingsurveillancehas accompanied the vast increasesin
crime(in thiscase pettycrime,vandalism, and crimeagainsttheper-
son) recorded in most OECD countries duringthelasttwodecades.
Moreover, government agencies seek to obtainand to integratepri-
vatedata bases into theirinformation structuresas a matterof rou-
tine- forexample,to monitorthefinancialsystem and to pursuetax
claimsand in some cases to trackdownwhite-collar crimesuch as
fraud and moneylaundering.
Noteworthy here is the factthatprivateagenciesin variouscoun-
triesalso havemassivecentralizeddata bases,manyofwhichcontain
publicinformation, and thereby makeit evenmoredifficult to sepa-
rate public and privateaspectsof data-gathering, coding,and sur-
veillance.Thisdifficulty has also arisenin theUnitedStatesas a result
of the proliferation of privatesecurityagenciesand guards,which
nowsignificantly outnumber"public"police.28 A notableexampleof
suchprivateinformation corporations is TRW,a US-basedcredit-rat-
ing and marketingorganizationthatclaimsto have detailed eco-
nomicand socialdata on 170 millionUS citizens(theUS population
is about254 million).Anotherimportant examplethatshowsthereis
a struggleover the proliferation and potentialdecentralization of
controloverdata bases arose in 1990 when the Lotus Corporation
withdrew its plan to marketa productcalled Marketplace:House-
holds.This productwas withdrawn due to 30,000protestsfroman
angrypublicconcernedthatsucha decentralizedsystem wasa grave
threatto personalprivacy. The producthad detailedinformation on
80 millionUS households(120 millionpeople), includingname,ad-
dress,and significant detailson shoppinghabitsand income(phone
numbersand credit-ratings were omittedin anticipationof privacy
complaints).29
Muchof thecontemporary innovation practiceand
in surveillance
technology hasbeen drivenby,on theone hand,thebureaucratic state
gathering information aboutpopulations(and thewillingness ofpeo-
ple toacquiescetothis), and on theotherbycapitalist seek-
enterprises
ing to maximizeprofitand to eliminaterisk. The capacityof
telecommunications to centralizedata (and withthenewtwo-dimen-

Gill
Stephen 17
sionalbar codes and software and de-

packages,also to redistribute
centralizedata) thatwaspreviously stored either
separately, geograph-
also lies at the heartof thesedevelopments.30
icallyor functionally,
Whatis at issueis theuse of and accessto suchinformation, and the
degree to which controlof such use is exercised
democratically.
Risk,and EconomicCitizenship
Exploitation,
TheLaborProcessand thePanopticon
Bentham'sPanopticon, conceivedin 1791,was modeledon a factory
runbyhisbrotherSamuelin Russia,and wasbased on and soughtto
rationalizethe practicesof asylums, schools,monasteries and hospi-
and workhouses
tals,as wellas factories forthepoor.31 Later,whenwe
observethe emergenceof Taylorism and scientificmanagement, we
can notetheuse ofsimilarsystematic technologiesofworkercontrol
in capitalism,to place not onlyshop-floor workersbut also supervi-
sorsand managersundersurveillanceand thusto constitute, objec-
and exploitlabormoresystematically.
tify, One mightarguethatthe
technicalcapacityto carryout theseformsof hierarchicalsurveil-
lance has increasedwiththe adventof new technologies.Thus sur-
veillanceand "disciplinary power"has been builtmorefirmly intothe
laborprocess,especiallyin thecomputerized"officefactory" withits
banksofvideoscreens,and in assemblylineswheremanagerially de-
finedworkrhythms and tasksare embeddedin themachinery.
The introduction ofthesenewtechniquesis oftenbanal,and some
studieshave suggestedthatthesetechnologiesin theworkplaceare
not reallyanymoreintrusive or degradingthanface-to-face surveil-
lance, althoughcomputersdo createnew occasionsformonitoring
bygeneratingmoreinformation of use to managers.32 On the other
hand,thereis clearlya greatdeal ofresentment at,and anxietyin the
ranksof, middle management,as the new technologiesare intro-
duced in waysthatmaketheirownpositionsmuchmoreinsecure.
Not all of thenewtechnologicaldevelopments are as "carcéral"as
thepanopticistmetaphorimplies;some are liberating, but ambigui-
tiesabound.A recentexampleof industrialrestructuring usingad-
vanced technologiesin wayspremisedon mutual and relatively
nonhierarchical formsof organizationinvolvesAsea BrownBoveri
(ABB), the Swiss-Swedish engineeringgiant.ABB is transforming its
productionorganization in whatit calls "a newindustrialrevolution."
The strategy is inspiredby a textwrittenby the Bostonconsulting

18 TheGlobal ?
Panopticon
group,Competing AgainstTime(1990). Restructuring alongtheseprin-

ciples is most advanced in Sweden, where work responsibilities have
been decentralizedintoworkteamsat thesame timeas workerskills
havebeen enhancedto cutproductioncyclesfrom86 to 35 days.This
strategy to boost productivity is based on blendingso-called"lean
production"methods,pioneeredin Japan,with"Swedishworkcul-
ture,"premisedon a coalitionbetweenmanagementand unions.
This has allowedthedistinction betweenadministration and produc-
tionto be largelyabolished.However,theplan meansthat25 percent
of thelaborforcewillbe made redundant.33
On theotherextreme,however, thenewtechnologiescan be, and
are being,used in an ultraexploitative and coercivemannernotonly
to increasethe intensity of workbut also to controlthe actionsand
rhythms ofworkersand to keep themmonitoredgenetically and bio-
logically. Gramsci noted the seeds of thisdevelopment in his analysis
of "Americanism and Fordism,"in which the innovationof new
means of accumulationrequired the creationof a new type of
worker.34 A contemporary exampleofthisis thewayproductiontasks
are redesignedso theycan be performed byrobots,so theroleofhu-
mansin thefactory is reducedto fillingin whentherobotsmalfunc-
tion- a developmentakin to the nightmareof FritzLang's film
Metropolis. New auto assemblylines run byGeneralMotorsembody
thisidea, and theyare accompaniedbymandatory drugtestingand
urineanalysis, which,in effect, are designedto mandatetheelimina-
tionofworkers who,itis claimed,are unfittoworkto thetechnolog-
icallyand managerially definedrhythms.35 Indeed, it can be argued
thatforthevastmajority ofworkers in theOECD sincethemid-1970s
therehas been an intensification ofwork,and newmanagerialstrate-
gies have been combinedwithnew technologiesto increasethe di-
rectand indirectformsofsurveillance and control.Stressand anxiety
levelshave increased.As the powerof capitalhas grownrelativeto
labor,workers havefoundthattheirrealincomeshavestagnated, and
formanyduringthe 1980s,real incomeshavefallenand continued
to fall.
This is thebroaderclimatewithinwhichto considernewformsof
workplacesurveillance.Accordingto the US Officeof Technology
Assessment, such technologiesare intendednot onlyto improvethe
performanceof workers(throughmonitoringoutput,use of re-
sources,and communication), butalso to monitortheirbehavior, lo-
cation,concentrationlevels,and predispositionto error (as with
drugtesting) . Moreover, theirpersonalcharacteristics, includingnot
onlytheir"truthfulness" but also theirpredisposition to healthrisk,

Gill
Stephen 19
are testedin manyUS firms.Anotherexampleof the coerciveand

carcéraluse ofwhatare called "dual use" technologies - thosethat
are sociallyusefulbutalso potentially sociallyrepressive- is theuse
of electronictagsto monitorthe locationofworkers(theseare also
used to monitorprisonerseitherwithinthe penitentiaries or when
they are on parole). Genetic screeningtechniquesplus lie-detector
and othertestsare coupled to creditratingsand criminalchecks
made on individualsas partof thehiringprocessin a growingnum-
ber of big US corporations, as well as in various(notjust sensitive)
areasofthestatebureaucracy. In thecase ofUS corporations, efforts
are made to sort out potentially"risky"workersin the hiring
process- thatis, to avoid hiringthose who may become "sickly"
workersand thusplace a financialburdenon the corporatehealth
care plan. The trendin NorthAmericais towarda surveillance
process that increasinglyfocuses on the worker - the workeris
viewedas a riskas wellas a tool of production.Occupationalriskis
equatedwiththesusceptibility oftheworkerratherthan(hazardous)
workplaceconditions,especiallyin NorthAmerica.30 This explains
whythereis suchan increasein theuse ofgenetictesting, as wellas
checkson health,insurance,creditworthiness, and criminalhistory.
Forexample,thenumberofFortune500 companiesthatuse genetic
screeningforhiringdecisionshas doubledoverthelastdecade,with
more than 15 percentnow using such techniques.37 The keyeco-
nomicforcedrivingthisprocessin theUnitedStatesis thecombina-
tionof increasinghealthinsurancecostsand the lowercostsof the
genetictechnologies.38 ElaineDraperhas arguedthatthisformofthe
social construction of riskis linkedto a broadertendencyin the
OECD countries:therisinguse ofgeneticexplanations forsocialphe-
nomena.Ifwhatshe saysis true,we shouldbe on the alert,particu-
larlygiventheresurgenceoffascismin manypartsof theworld.
All of thesemeasureshaveprompteddifferent formsofresistance,
eitherpassiveor active,includingstrikes, workstoppages,and go-
slows,and even collusionbetweenworkersand line managersto es-
cape surveillance fromabove.Othertechniquesinclude"anticipatory
conformity" and "appearancemanagement."39 These formsof resis-
tancehad theirprecursors priorto theonsetofindustrial capitalism,
forexample,in theweavers'riotsin London,and peasantrevoltsand
poachingin Britainin theseventeenth century, aftertheenclosureof
agricultural landsand theappropriation of the traditionalcommons
in Britainin orderto capitalizeagriculture.

20 ?
TheGlobalPanopticon
Social "Triage" and Risk Management
One wayto understandsome of the contemporary dynamicsassoci-

atedwiththepoliticaleconomyof the 1980sand 1990sis withrefer-
ence to the idea of "triage."Oscar Gandyhas tracedthe originsof
panopticsurveillanceand normalizing techniquesback to preindus-
trialtimes,and to the notion of tnage,a Frenchexpressionthat
meansto pickor to cull:to sortout thegood applesfromthebad. In
English,triagemeans"thegradingofmarketable produce."The term
has more frequently been associatedwithmedicaldecisionmaking,
forexample,in a situationof massbattlefield casualties,whereonly
thosemostlikelyto surviveand fightare giventreatment.40
The bulkof theinformational bases formodernpanopticismare,
as Gandyhas detailed,everydaytransactional whichleaves
activity,
tracesthatcan be (electronically) recorded,stored,sorted,and eval-
uated,in partaccordingto the applicationof statistical and other
evaluationprinciples.41 Muchof thisis premisedon techniquesasso-
ciatedwithinsurance:theavoidanceofrisk.Examplesofthisare nu-
merous,includingcreditand financialcompanies,insuranceand
healthfirms,and marketing corporations. This kindof information
gathering and its into
sorting categories is now so routinizedthatitis
builtintotheprocessofeveryday life.
Moderntriagetechniques- in thecontextof marketforces- are
used to marginalizeor eliminate"unproductive" and high-risk indi-
vidualsand toidentify thosewhocan be "constructed," normalizedor
capturedas workersand consumers.In theUnitedStates,thistypeof
directand indirectsortingprocessis appliedacrossa rangeofactivi-
tiesbybureaucraciesofgovernment and largecorporations. Thishas
for
meant, example, that 30
perhaps percent of the totalpopulation
has no effectivehealth-careinsurancebecause stateprovisionis in-
adequateand in theprivatesectortheyare consideredtoo "risky" to
coveror to treat.42
When risk-avoidance rules are applied (some by computerpro-
grams) to creditand health insuranceapplications, high-risk individ-
uals maybe automatically eliminatedfromauthorization of credit,
fromprivatehealthinsurance,or,as an implicitconditionforfuture
insurancecoverage,womenmaybe coercedintoprenatalscreening
and perhapshavingan abortion.For example,theprocessof credit-
ratingaffectstheconditionsunderwhichloansare extendedand the
rateof interestpaid. To obtaincreditmeansgivingaccess to a great
deal of personalinformation and thisin turnis manipulatedinto
sortingcategories, as well as being sold on the marketplace.The

Gill
Stephen 21
credit-ratingprocessis intimatelyboundwiththeproductionprocess,
not onlyin termsof the ratingof corporatebonds,whichpricethe
interestrateforloaned fundsforinvestment in plantand machinery
or forresearchand development,but also in termsof the recruit-
mentof labor. Companiesincreasingly referto creditinformation
agencies when considering new employees:thosewho have demon-
stratedtheirabilityto servicedebtsare morelikelyto be hired,ce-
terisparibus,than thosewho have faultyrecords.Moreover,many
poorerpeople cannotgain properaccessto credit;thosethatdo pay
muchhigherreal ratesof interest. This categoryincludesthosewho
are themostvulnerable, suchas newimmigrants, thepoor,singlepar-
the
ents, unemployed.
These changesare also bound up withthereconfiguration of civil
society,insofaras certainaspectsofrisk(bothmarketriskand credit
risk)have,at leastsinceWorldWarII, been largelysocializedin the
OECD countries. Whatis emergingis a shifttowardcontradictory de-
velopment.On theone hand,riskis shiftedincreasingly downto the
personallevel,and hedgingof riskstakesa predominantly market
form,suchas theprovisionofprivatehealth-care arrangements, pri-
vatesecurity guards,and so on. On the otherhand,riskis increas-
inglygeneralized,as, for example,environmental risksor market
risks,suchas whena fallin thestockmarketunderminesthelifesav-
ingsof people throughthemediumof pensionfundinvestments. A
keyaspectofsociallifein thelate twentieth centuryis thegrowthin
theprominenceof "manufactured risks"(as opposed to naturalrisks
and disasterssuchas earthquakes),and thisprovokesattempts byin-
dividualsto provideforsuchrisks.43 1wouldadd to thisthatall ofthis
is occurringin an era of statebudgetcutbacksand thereductionof
the socializationof riskprovisionfor the majorityof the popula-
tion- and thusa greaterprivatization oftheriskcalculusat thelevel
oftheindividual.Manypeople enterintoinformation grids,as in the
case of creditprovision,to facilitatetheirlivesand obtainaccess to
valuableresourcessuchas creditand insurance.Indeed,in doingso
some are able partlyto offsetcertainrisksthattheyencounterin
theireveryday(financial)lives.The use of a creditcard meansthat
transactions are recorded,and oftencreditcardsprovideinsurance
againstcounterparty risks,such as flightcancellations,faultyprod-
ucts,car accidents,and so on.
Moreover, in theUnitedStates,despitetheapparenthegemonyof
marketforces,thereis someformofsocializationofrisk,butitseems
to benefitan affluentminorityof the population,coincidentally
thosewhoare mostpolitically activein a societywhereapproximately

22 TheGlobalPanopticon
?
halftheeligiblevotersdo notparticipate in presidential

elections.J.Κ
Galbraith noteshowtheUS federalgovernment insuresdepositors for
up to $100,000per bank account- thepoor, of course,will not have
suchlargesavingsin a bank- withtheresultthatwhenthesavingsand
loanscollapseoccurred,itcosttheUS taxpayer morethan$250 billion
in compensation to thosewithsavingsand loan accounts.44
The 1980swas a periodof tremendous changein thesphereoffi-
nance. One dimensionof thischangewas a huge growthin indebt-
edness and credit expansion at all levels- from corporate to
individual,fromfederalto local government. In the 1980s,access to
creditbecamea keydeterminant ofthereproduction ofnotonlyeco-
nomic but also governmental This
activity. processhas been com-
monly understood to be an indirect one, conductedwithinthe
contextof the forcesof supplyand demand in the marketplace.
However,especiallyfromtheearly1980s,thepoor creditconditions
and heightenedcompetitiveness in the global political economy
beganto givemoreprominenceto theroleofcredit-rating agencies,
concernedwiththe monitoring and surveillanceof firmsand indi-
vidualsas wellas municipaland nationalgovernments. Credit-rating
agenciessuchas Moody'sand Standardand Poor's becamemorein-
fluential. A good creditratingbecamethesinequa non ofeconomic
statusin US society.In whattheformerlibrarianof CongressDaniel
Boorstinonce called "thegreatdemocracyof cash,"access to credit
on reasonabletermsmeansaccess to economicresourcesand indi-
rectlyto politicalpower.
In NorthAmerica,and in the UnitedStatesin particular, the ma-
terialism ofliberaldemocracymeansthatthesubstantive conception
of citizenshipinvolvesnot onlya political-legal conception,but also
an economicidea. Full citizenship requiresnot onlya claimof polit-
ical rightsand obligations, butaccessto and participation in a system
ofproductionand consumption. Centralto thecontemporary defin-
itionof participation in thissystemis access to thefinancialsystem,
and in particularto thecreditallocationprocess.
Creditcardswerefirstmade availablebydepartment storesto fa-
cilitatethe purchaseof expensiveitemssuch as appliances,and by
gasolinecompanies,before1920. Some hotelsissuedcreditcardsto
regularcustomersas earlyas 1900,butin all thesecases thenumber
of cardswasverylimited.The broadeningof the use of creditcards
emergedin the 1950s, again mainlyin major departmentstore
chains,and thegeneral-purpose creditcardwasintroducedbybanks
in the1960s.For muchofthe 1960sand 1970screditcardswereonly
marginally profitable;themajority ofcardholders were"convenience

Gill
Stephen 23
users,"whopaid offtheirbillsregularly and thusdid notpayinterest

and/orpenaltyfees.It was in the 1980s thatprofitability began to
rise, as state usury lawswere relaxed (allowinghigher interest rates)
and annual user fees became the norm.Deregulationalso allowed
manynonbankcardsto be issuedbyfirmssuch as AT&T,Sears,and
AmericanExpress.
Those who gain access to credit are ranked hierarchically:
AmericanExpresscards,forexample,are eithergreen,gold,or plat-
inum.Moreover, each cardholder'sbehaviorprofileis scrutinized on
a daily basis, according to more than 450 separate categories.
Companiesrankpeople accordingto financialand social status,em-
ployment record,criminaland healthrecords,and so on. Not all of
theserecordsare integrated, butsomeare,apparently forprivatein-
surance,credit, and health.
Todayabout70 percentofUS familieshaveat leastone creditcard,
up from50 percentin 1970. Holdingsof bank cardssuch as VISA,
MasterCard, and Optimahavealso risenquickly, and 54 percentofall
US familiesheld thesein 1989,up from16 percentin 1970. Bank
card holdinghas increasedfurther since 1989. In 1990 creditcards
wereused to purchasesome $455 billionof goods and services,and
creditcardchargesaccountedfor13 percentofall consumerexpen-
ditures,up from10.8 percentin 1980.4Γ) Creditgrowthdroppeddra-
matically in 1991as theso-called"creditcrunch"hittheUnitedStates
aftertheexcessesof the 1980scame home to roost.
Creditcardsare used fortworeasons:as a meansof paymentand
as a sourceofcredit.Interestratesare morecriticalforthosewhouse
thecardforcredit:as a debtinstrument. Dependenceon theuse of
cards for these purposesis increasing.Revolvingcredit,whichis
mainlyunpaidbalances,rosefrom$60 billionat theend of 1980- 19
percentofall consumerinstallment debt- to morethan$240 billion
at theend of 1991,whichrepresented welloverone-third of all con-
sumerinstallment debt outstanding.41'
Mostcreditof thistypeis un-
secured, but increasingnumbers of borrowers,those with low
incomesor poor credithistories, haveturnedto a recentinnovation,
securedaccounts.These accountsrequireborrowers to deposita sum
($500-1,000)in a savingsaccountat low interestto gain a card and
thusperhapsto rebuilda creditrating.
This reflectsthe higherlossesassociatedwithpoorerpeople gen-
erallywithrecessionary conditionsand thesearchforgreaterprofits
in an increasingly competitive creditcardindustry. A studyof theef-
fectsof deregulationin US bankingfortheAmericanManagement
Associationfoundparallel trends.Indeed, thereis compellingevi-

24 TheGlobalPanopticon?
dence ofa trendtowardthesegregation ofbankingservicesto create

a three-tiered, hierarchicalstructure, withthe poor effectively mar-
ginalizedout of mainstream banking The
facilities. poor paid higher
feesand receivedlowerratesofintereston theirdeposits;thusthese
trendsexacerbatedtheirpoverty.47 Since thatstudythe same trends
haveaccelerated.
Despiterelatively low profitswhencomparedwithmortgagesand
othertypesof lendingwhilethe creditcard industry was becoming
establishedon a massbasisin the 1960sand 1970s,by1984 theprof-
of creditcardshad risenabove thatformostotherformsof
itability
lending,as personalindebtednesslevelsrose. Nevertheless, surveys
indicatethat,in 1989,32 percentofcardholdersowedlessthan$500,
and an additional18 percentowed between$500 and $1,000,and
thatmostcardholdersare relatively insensitiveto interestratelevels
(which in real terms have been veryhigh for much of the last
decade).48 Since 1989,the costs of funds to the card companieshave
fallendramatically because theUS FederalReservecutinterestrates
aggressively as US inflationfelland the economymovedinto reces-
sion.Spreadsbetweencreditcardratesofinterestand thosepaid on
depositor otherinterest-bearing accountsare nowwiderthan they
have been fortwenty years.At the same timedelinquencyratesdid
notriseanyfasterthanin previousrecessions.This allowedthecom-
paniesto increasingly nuance theiroperations:
For themostpart,cardissuershaveloweredratesselectively. In
somecases,theyhavetargeted theirsolicitations
to individuals
deemedtohavecertain desirable anapproach
characteristics, made
morefeasiblebythedevelopment ofextensivedatabasesand im-
provedtechniquesforscreening
potentialcardholders.Someofthe
national
largest issuers
havesegmented theircardholder basesac-
cordingto riskcharacteristics,
offeringreducedratesto a select
groupof existingcustomers who have good payment records;
higher-risk customers
late-paying arecharged stillhigherrates.49
The hierarchical sortingofcreditcardholdersseemssetto continue:

"In thefuture, segmentedratestructures willprobablybecomemore
widespread as lenders continueto to
try categorizeaccountsbytheir
and
profitability price them accordingly."50
thecreditcardcompanieshaveplansto introducemoreso-
Finally,
phisticatedtechnologiesto protectthe securityof the creditcard,

Gill
Stephen 25
such as cards thatcontainthe printsof twofingers.These smarter

creditcardscan also be used fortax,social security,
and healthpur-
poses.They also can be programmed to contain an individual's
per-
sonalhealthrecords,and evenallowfordatastorageon thecardwith
no centraldata base needed.51
and theStoryofByron
EconomicCitizenship
This sectiondeals in a littlemore detailwiththe insertionof the
processesof commodification more deeplyinto the civilsocietyof
contemporary capitalism and the waythattheserelateto thepanop-
ticismofeveryday life:mediated in partthroughthecredit-allocation
I
process. will firstdescribe in greaterdetailhow thisprocessorigi-
in
nates, an existentialand historicalsense, for the typicalNorth
Americanmemberof the world'smosttelevisualsociety,and then
look at a specificcase, thatofByron.
In NorthAmerica,civilsocietypreparesitsfuturecitizensforthe
momentwhentheyattaintheage ofeconomiccitizenship, insofaras
thisis reflectedin the possessionof creditcards.For example,a re-
cent televisionseries,producedby the public servicebroadcasting
network TV Ontario(TVO) and shownin 1992,was an educational
coursein creatingtheconditionsforobtaininga creditrating.To ob-
tain a creditrating,as illustratedin the firstprogram,teenagers
needed to realize thatthisis possibleonlythroughincurringdebt
(alone) and carefully and consistently servicingthedebt.Overtime,
thiswouldestablisha clearand documentedrecordoffinancialrec-
titude.However,thefirstproblemwas access to the initialloan; this
wouldrequirea guarantor, who,almostinevitably, wouldbe a parent.
Nevertheless, upon successfully servicinga relativelysmallinitial
loan, thisparticularshackleofparenthoodcould be sunderedin an-
ticipationof a largerloan, forexample,to buyan automobile.The
questionis, howdoes a youngpersonservicesucha loan? The TVO
programemphasizedthatteenagersshouldtakefullresponsibility for
servicing the loan, for example,byobtaining weekend or eveningem-
ployment in a grocerystore.Thiswouldhavethecombinedeffectof
showingtheirabilityto be good employeesas well as maturing, re-
sponsible adults.
In thisway,youngadolescentsare groomedforentryintonotonly
the consumer-credit economy,but also the productionstructure.
Thus,theabilityto gain access to the creditsystem in somewaysan-
ticipates the realizationof their economic citizenship.In other
words,theacquisitionofrelatively independentaccesstofinancialre-

26 ?
TheGlobalPanopticon
sourcesmeansthatNorthAmericanadolescentsbeginto developa
capacityto transcendthemoretraditional formsofdisciplineassoci-
ated withthefamilyand the school.In so doing,however, one form
ofdisciplineis penetratedand transformed by another: market disci-
pline. In a sense,generational conflictbelonging to thesphere the
of
family is transcended by a common subordination to the lawsof the
market.Of course,thecapacityto enterthecreditsystem in thisway
is notequal forall because theinitialpointofentryto thecreditsys-
temrestsupon the creditworthiness of the initialguarantorof the
firstloan.
A recentarticlein theNewYork Timesexaminedthecase of"Byron,"
a forty-year-old hospitaladministrator who was striving "to restorea
tarnishedcredit-rating." Byron had accumulated more than $30,000
in debts,mainlythroughuse ofcreditcardsfortuitionbills,furniture
loans, and other household expenditures.Hounded by creditors,
Byronsoughthelpfrom"a local consumercreditcounsellingservice.
The serviceintercededwiththe creditorsand now Byronis paying
$649 a monthto satisfy thelastofhisdebts."Byronkeptto thesched-
ule of repayments and is nowrepairinghis creditrating.The article
pointedout the costsof doingnothingto deal withthe creditprob-
lem.The articlequotedJewellL. Bailey,vice-president foreducation
withthe ConsumerCreditCounsellingServiceof Oregon, which
handledByron'scase: "Without a good creditrating,youmaynot be
able to findan apartmentor evengeta job. . . . Manymoreemploy-
ersare orderingcreditreports,and a good reportis oftenthedecid-
ingfactorwhena companymustchoose betweenone candidateand
another."52
Information is routinelygatheredand storedbycreditbureauson
major credit-cardexpenditures,or for loans to financepurchases
suchas automobilesor houses.Creditbureausgatherinformation on
creditusersand sellitto banks,privatecompanies,and retailers. The
information includeswhateach accountholder owes,or has paid,and
whetherthe paymentsare up to date. It also includeswhetherdebt
collectionagenciesor othermethodshave been needed to secure
paymentforbills.Otherinformation, whichis withinthe publicdo-
main,suchas bankruptcies or failureto meettaxationpayments, are
also routinely included.Negativeinformation is usuallykepton these
recordsforup to sevenyears,and bankruptcies forten.Moreover, "in
threespecialinstances,negativeinformation maybe reportedindef-
initely:ifyou applyfor$50,000or morein credit,ifyou applyfora
lifeinsurancepolicywitha faceamountof$50,000or more,or ifyou

Gill
Stephen 27
applyfora job paying$20,000or more (and theemployerrequestsa

creditreport)."53
In the casejust outlined,the repairof Byron'screditratingwas a
painfulbutnecessaryprocessforhimand his family. The burdenof
servicingis one thing,theblack mark against abilityto be partof
his
the productiveeconomy is another.His futureaccess to creditand
employment maybe permanently jeopardizedevenafterhe has fully
repaidhis debts.To repairByron'screditrequirednot onlyharder
workand longerhourson hispart,butalso on hiswife's,becauseshe
was forcedto takepart-time employment. In thisway,the debt bur-
den mandatedan additionallabor supply,in much more coercive
conditionsthanmighthaveotherwisebeen thecase. It is commonin
NorthAmericafor blue-collarand white-collar employeesto have
morethanone job, and it is increasingly rarethatsuch secondjobs
are regulatedbyunions.
DemocraticSurveillanceand WorldOrder
TheRiskyBusinessofGlobalFinance
Global financeis partof the transnational historicalstructures that
intensifythepressuresand constraints feltbyByronand thechildren
of NorthAmerica(and elsewhere)in theireveryday lives.Yetit is a
system that lies in part outsideof nationalstructures of governance
and systems ofaccountability.It operatesin a situationof absenceof
regulationor underregulation.
Rentierinterests in theUnitedStateshavebeen at thevanguardof
effortsto liberalizeglobal financesince the 1970s- efforts thatac-
celeratedin the 1980s and includedongoingpressureon Japan in
theyen-dollar negotiations. The UnitedStateshas also used itsinflu-
encewithintheG-7and theinternational financialinstitutions(IFIs),
suchas theInternational Monetary Fund (IMF) and theWorldBank,
to pressforfinancialand widereconomicliberalization in theThird
Worldand in theformercommunist countries.US power,then,is at
thecenterof the transnational structuresassociatedwithwhatI call
the"G-7nexus."54
Muchofcontemporary financehas takena quasi-prudential form,
the to
given propensity speculation system the offersand because of
the financialrisksassociatedwithunstableswingsin prices,curren-
cies,and interestrates.Nevertheless, theglobalfinancialsystem now
seemsto be underregulated and vulnerableto collapse.Forexample,

a review of the recent annual reports of the International

Organisationof SecuritiesCommissions(IOSCO) revealsthe rapid
stridesbeingmade in the integration and automationof stockmar-
ketsworldwide,and a growingconcern,especiallysince the 1987
worldstockmarketcrash,overthe adequacyof surveillancemecha-
nismsand themonitoring of tradersbysupervisors. A primary impe-
tus forthe introductionof ever-higher levelsof technologyin the
worldof financehas come fromthe UnitedStatesand Canada (the
TorontoStockExchangehad theworld'sfirstautomatedmarketsys-
temin 1977), withthe US NASDAQ marketa leaderin "automated
marketsurveillancefacilities."55 Linkedto thiswasgrowingcompeti-
tionin financialservices,a majortrendof the 1980s.Because of the
fungibility and mobility offinancialformsof capital,holdersof such
capitalrespond changesin information
to veryrapidlyindeed,and in
many cases this response is automated throughcomputerization.
Global finance is characterizedincreasinglyby the explosive
growthofexoticfinancialinstruments, suchas derivatives,
whichare
designed to offset or hedge variousrisksin a market-based system.
These risksincludevulnerability to marketrisk(involving pricefluc-
tuations);counterparty creditrisk(involving thethreatofdefaultby
the otherpartyto a contract);liquidityrisk(in whichone financial
instrument is difficultto replacequicklyat something approximating
its "fundamental" value); or operationalrisk(such as failuresof in-
ternalcontrol,perhapsinvolving fraud,humanerror,or computer
malfunctions). In early1994therewasgrowing international concern
at thedegreeto whichsuchderivatives mightbe, as thenotedfinan-
cialjournalistJohnPlenderhas putit,"a multi-billion dollaraccident
waitingto happen."Some companies- in thecontextofa "competi-
tivemaelstrom"in which"frenetically mobile capitalseeks out the
highestreturns" - have, however,lost huge amountsin derivatives
trading;forexample,Metallgesellshaft of Germanylost US$1.4 bil-
lion in oil derivatives and KashimaOil ofJapansome US$1.5 billion
in foreignexchangederivative tradingin early1994.The same fate
has befallenlocal governments, forexamplein theUnitedKingdom,
althoughon a smallerscale. Because off-balancesheet derivatives
tradingis not onlya kindof modern-day equivalentto alchemist's
gold but also assumedto be a largelyzero-sumgame, theselosses
were offsetby the gains of others.Nevertheless, a 1993 Bank of
England study,quoted by Plender,concluded thatthe tradingby
largelyunsupervised hedgefundswas "a supervisory hole at thevery
heartof the derivatives markets," partlyreflectingthe absence of a

Gill
Stephen 29
panoptic or surveillancecapabilityin the derivativesindustry.

Plenderadds:
In thistwilightworldeveryonedependsheavilyon therating
agencies. Yet Moody's,forone, admitsthata largepropor-
tionof outstanding contractsare too newforit to feelsure
instruments
thattherisksare low. . . [moreover]risk-shifting
also havea wayof pushingriskson to thoseleastable to ab-
sorbthem.. . . The real problems,bothforindividualbanks
and forthe system, are about opacity,leverageand lack of
managerialcompetence.Centralbankerswillhave to be on
theirmettleif thatpotentially lethalcombinationis not to
lead to trouble.50
Thissituationis bothdangerousand politically complex.Mostvot-

ersare also wage earners,and theycontribute to pensionand insur-
ance plans,whichtheylike to see grow;thusthe bloc of rentieror
creditorinterestsis enlargedpoliticallyand economically.Indeed,
manyoftheworld'sbiggestplayers - and speculators - in theglobal
financialmarketsare the pensionfundsand insurers,as wellas the
largehedge fundswho each competeto increasetheirpost-taxrate
of return,to assurefundgrowthand profitsand thusattractmore
customers/savers. What is needed here are attemptsto raise the
awarenessofpensioncontributors and holdersas towhatis,or might
be, reallyhappening to theirlifesavings,and to alertthemto thepo-
tentialdangersof theirsavingsbeinglinkedto manyof theexoticfi-
nancial derivativesthat are used to offsetrisks. Much of US
investment banks'derivative dealingsare carriedout throughunsu-
pervisedspecial-purpose subsidiaryfirms,which,paradoxically, are
oftengivenhighercreditratingsthantheirparentbanks.Moreover,
littleinformation is disclosedabout the counterparties to the con-
tractsissued: "The creditorsof Rashima,forexample,mighthave
thoughttheyweredealingwitha companythatwasexposedto a fluc-
tuationin oil prices.Yet it turnedout to be a foreignexchange
dealer,runningcurrency riskson a scale thatwipedout itscapital."57
The problemhere,then,is thewaythatthepace offinancialinno-
vation,in the contextof intensecompetition,threatensto self-de-
structin the absence of meaningfulregulation,and the global
financialsystemis only as strongas its weakestlink. Derivatives
tradersmaybe takingimprudentrisksin anticipationof a govern-

30 ?
TheGlobalPanopticon
mentbail out,forexample,wherethecentralbankactsas a lender-

- the typeof socializationofriskthatthemarket-based
of-last-resort
derivativesindustry was meantto self-regulate and offset.This force-
fieldof constraints and dangersstemming fromfinancialinnovation
and rentierorthodoxy has meant,at leastwithregardto theevidence
of the 1990s, a redefinitionof accountability in favorof market
a
forces,and, by implication, looming crisis of accountability fora
of
range governments who both supervise and operate within the
contextof the derivatives markets.The everyday of
practices public
administration have begun to be recastin orderto sustainthisnew
formofmarket-based, as opposed to popular,accountability.
As notedabove,theUnitedStatesis privilegedin theglobalfinan-
cial structureand is betterable to capitalizeon itsrisksand opportu-
nitiesthananyothergovernment. On theotherhand,whatcould be
regardedas morein US "nationalinterests" thanto ensurefulland
adequatesurveillanceofand further penetration intothecommand-
ing heightsof global finance,not onlyto extendUS powerbutalso
to strengthen a fragilestructureofeconomicgovernance? Wehavein
partestablishedthatthe UnitedStatesand itsprimaryallies (espe-
ciallytheUnitedKingdom)have thecapacityto intervenein and to
systematicallyreregulateglobal finance.The questionis: Whydoes
thisnot happen,whenthedangersassociatedwiththecurrentsitua-
tionare quiteobvious?
One explanationrelatesto theblocsofsocialforcesthathavecome
to predominatein a rangeof formsof state:the dominanceof the
ever-larger rentierblocs in financialpoliticsand economicpolicy.
This has occurredin a climateof opinionthathas increasingly con-
doned a get-rich-quick mentality and an instrumentalism thatper-
mitseitherimprudentor myopiclack of oversight, or both,on the
partof theG-7leadership.Thisis also reflected, at thehighestlevels
of corporatecapitalism,in the adoption of the marketpractices
aboutwhicheventhesmallestBritishshopkeeperwouldbe cautious.
Increasingly,corporatefinanceofficers, and the treasurers of public
funds,seek to hedge riskwithproductstheydo not understand.A
second explanationrelatesmore to the shadowyrelationsbetween,
on the one hand, the US security complexand the global financial
system, and on theother,aspectsofglobalfinanceand politically in-
fluentialfiguresin politicsand government in manyotherpartsof
theworld.Some aspectsof theserelationswererevealedin thewake
of the collapse of the Bank of Creditand CommerceInternational
(BCCI) (sometimesreferredto as the Bank of Crooksand Cocaine
International), whichis examinedaftera briefdiscussionofthescale

Gill
Stephen 31
and purposeoftheUS intelligenceapparatus.Partoftheworkofthis

is
apparatus to keep of
track developmentswithintheglobalfinancial
system.
Agenciesand Finance
Intelligence
This essaywouldnot be completewithoutreferenceto thewaysthat
surveillancehas been conventionally understoodin the postwarpe-
riod: thatis, to theworldof espionageand intelligenceso convinc-
inglyportrayed byJohnLe Carré,involving thesystematic gathering
of information by statesabout otherstatesand citizens,intimately
connectedto waror anticipation ofwar.The goal (whichis theoreti-
callyand practically impossibleto realize) of theindividuals who are
theheadsof thesesecurity structures - withtheUnitedStatesat the
apex- is to place both friendsand enemiesalike under totalsur-
veillance.
The worldviewof thePentagonhas tendedto be territorialist and
mercantilist in conception,and it has focusedin a ratherobsessive
way on countervailingSoviet power and exercisingcontrolover
ThirdWorldnations,evenifthishas meantsupporting themostodi-
ous dictatorships. Traditionally,therefore, the Pentagonhas been
partof whatI have called a nationalist-mercantilist bloc of forces,
whereas the corporate mainstreamand financialservices firms
(whichhavebenefitedlessfromhighlyprofitable Pentagoncontracts
and subsidies)has tendedto be moreinternationalist and economi-
callyliberalin orientation. Whether the stance of the Pentagonwill
change, and, if so, in what ways, is a key issue for the questionof
globalsecurity in this and the next century. mightexpectto see a
We
reconfiguration of the US and
military security apparatusinwaysthat
willensurethatitsrelativeautonomyis constrained, so thatin gen-
eralitsoperationsare associatedwithpolicing,disciplining, and pun-
ishing thosewho seek to challenge the basic of
principles disciplinary
neoliberalism.
The US surveillanceapparatushas a degreeof relativeautonomy,
and in thepastit has notoperatedin waysthatare entirely commen-
suratewitha free-market styleof neoliberalism in the United States.
The intelligenceapparatusnotonlywieldsenormouspoliticalpower
and influence,it also "exhibitsmostof thetypicalattributes of large
bureaucratic organisations, a
including tendency to define and pur-
sue bureaucratic politicalobjectiveswhichare notnecessarily in com-
plete concordancewiththe nationalinterestsof the fiveUKUSA
countriesthemselves."58 The infrastructure forthe US intelligence

32 ?
TheGlobalPanopticon
apparatuswascreatedduringwartime, underthedirectionand train-

ing of the UK MI6 in the formof the Officeof StrategicServices
(OSS), and wascemented bytheUKUSAagreements,
internationally
whichformally bound and subordinatedtheintelligenceagenciesof
the major English-speakingcountries(withothersadded later) to
thatof theUnitedStates,withtheUS-UKlinkat itsheart:
The UKUSAagreements of 1947werethefoundation

fora global
networkofsophisticatedelectronic
eavesdropping but
technology,
as itwere,oftheseagreements
thesubtext, wastheinstitutionalised
hegemony ofAmerican TECHINT(technologically
obtainedintelli-
gence)with itsnervecentre at FortMeade,Maryland, head-
the
of
quarters NSA.59
One of the mostcrucialagencies,and theonlyone not subjected

to congressionaloversightthen,is the NationalSecurityAdminis-
tration(NSA), withapparently morethan250,000employees.NSA,
withits headquartersat FortMeade, Maryland,is "thelargestand
most secretintelligenceagency,""the heart of the product,""the
innercircleof secrets."00 NSA,withan annual budgetof $16-18 bil-
lion,tendsto focuson military information butgathersinformation
ofall types.NSAis allowedall the"raw"intelligencedataofitsjunior
partners,in exchangeforwhichit returns"processeddata,"which
has someadvantagesto partnersin thatitallowsthemto obtaina fin-
ishedproduct,althoughsimultaneously it allowsthe US agenciesto
influencetheirviewof theworldand theirinterpretation of particu-
lardevelopments and trends.01The NSAbudgetis severaltimeslarger
thanthatof theCIA,althoughitsoveralldirectionis theauthority of
the Directorof the CIA.62As noted, NSA specializesin electronic
eavesdropping, in majorlisteningpostsworldwide, as wellas in small
teamsplaced in US embassies,usingdata fromsatellites, spyplanes,
and aerial surveillance,and an exoticgalaxyof othertechnicalde-
vicesforgainingaccessto theinformation and thoughtsofothers-
"friends"and "enemies"alike. For example, the NSA stationat
MenwithHill, Harrogate,interceptsEuropean and transatlantic
telecommunications and worksin tandemwiththe Britishgovern-
ment'sowntop-secret listeningand code-breaking GCHQ, in
facility,
Cheltenham. A thirdmajorNSAfacility is at Pine Gap,Australia.
The intelligenceagenciesencompassedbyUKUSAwereorganized
primarilywiththe Cold Warin mindand targetedprimarily against

Gill
Stephen 33
the SovietUnion. In a post-ColdWarera the Westernintelligence

worldis in some confusionbecause itsverytarget,made massivein
thewarofpropaganda,has virtually vanishedand has been shownto
be no matchforthe West.In thissense,it is not quite businessas
usual.Whois theenemy? Japan?France?theThirdWorld?Sinceeco-
nomicchallengesto US primacyare moredefuse,evenUS "friends"
are a potentialtargetof surveillance,
especiallyfortheUS agencies,
ifintelligencetheorists
and Pentagonplanningdocumentsare to be
believed.The UnitedStatesappearsto be attempting to constructa
moreindependentand flexiblemilitary-intelligence strategyto cope
with the new situation,althoughbecause of its scale and organiza-
tionalstructureschangemaycome slowly/'3
Atstakeis nothinglessthan. . . theentireinstitutionaland ideologi-

cal underpinning ofintelligencein thepostwar world.Andin particu-
laritisAmerican hegemony overtheWestern intelligence
community.
afterall,onlyworkwhenthereisa commonenemy.
Alliances, Thereis
moreover a hugecapitalandlabourinvestment inColdWar-driven in-
TECHINT
telligence. is likea gun;however sophisticatedthe technol-
ogy,it mustbe pointedat a target.Reconnaissancesatellites, for
instance,havefixedorbitsand cannotbe simplyand cheaplyrede-
ployedto new targets.But HUMINT [intelligence gatheredby hu-
mans]too has itsown "inertial thrust"(to steala phrasefromE. P.
Thompson).Yearsof painstaking workin buildingup networks of
agentsand sourceswillnoteasilybe setaside.04
Nevertheless,there is evidence that the reorientationof the US in-

telligence apparatus to increasinglyencompass commercial, indus-
trial,and financial informationhas increased. Indeed, the question
of the futureprioritiesand purposes of the US securityapparatus also
needs to be set in the context of the economic surveillance activities
of the US Departments of Treasury, State, Energy, Customs and
Immigration,Coastguard Service, and so on. Increasingly,these op-
erations are likelyto focus on the economic perhaps more than the
militarysphere, although it remains to be seen if bureaucratic rival-
ries and turfwars can be minimized. One of the means of mobilizing
coalitions,withinthe United States governmentapparatus as well as
internationally,has been the "waron drugs"and the offensiveagainst
"terrorism."(The more traditionalformsof covertaction and desta-
bilization associated with recent CIA activities in Angola,

Mozambique, Chad, and other partsof Africaseem likelyto continue

when deemed necessary.).
The new analyticand information-processing capabilityof the US
is
intelligencecommunity linked, part,in to the new ideologies of na-
tional competitivenessand disciplinaryneoliberalism, and in this
sense theyrepresenta shiftpartlyaway fromCold War dogma. This
reorientationis reflected,for example, not only in hiringacademics
forindependent analyses of the abilitiesof the CIA to provide better
qualityintelligence,65but also in an articlewrittenin 1991 byAdmiral
StansfieldTurner, formerdirector of the CIA, concerning the new
goals of US intelligence.Turner's thesisparallels the emphasis placed
by the Clinton administrationon "economic security"as the number
one policy priority:
We live in an information age. . . . Informationhas alwaysbeen

but
power, today thereis moreopportunity to obtaingood informa-
tion,and theUnitedStateshas morecapability to do thatthanany
othernation.. . . The preeminent threatto US nationalsecurity
now
lies in the economicsphere.The UnitedStateshas turnedfrom
being a major creditornationto the world'slargestdebtor,and
thereare countlessindustries whereUS companiesare no longer
competitive. Thismeanswe need bettereconomicintelligence. The
UnitedStatesdoes notwantto be surprisedbysuchworldwide de-
velopments,new mercantilist strategies,sudden shortagesof raw
materialsor unfairand illegaleconomicpracticesthatdisadvantage
thecountry.[Thereneedsto be] a moresymbiotic be-
relationship
tweentheworldsofintelligence and business.™
Intelligence is alreadywidelyused in business because industriales-

pionage is common, and the Iran Contra and BCCI scandals revealed
the abilityof governmentsto privatizeforeignpolicy and (clandes-
tine) warfare.The reorientationof intelligencetowardthe economic
sphere is likelyto combine both macro assessments,using data bases
to assess world-wide production, capital and resources flows and
stocks,demographic shifts,migration,and so on, and at the micro
level of individuals and firms,it is likelyto capitalize on the surveil-
lance technologies now being used withinthe corporate sector,which
were discussed earlier. US intelligence probablyhas an unmatchable
lead in TECHINT, which can be used forthese purposes. By contrast,
Japanese intelligence is strongand expanding, but compared to that
of the United States it is still relativelylimited. Nevertheless,large

Gill
Stephen 35
Japaneseministries, such as the Ministry of Finance,are verystrong

in theirparticularareasof knowledge. Japanalso has excellentintel-
ligenceat the company level,as with the researcharmsofthekeiretsu
groups, and especially large brokeragefirmssuch as Nomura
Securities.The westEuropean intelligenceagenciesare more frag-
mentedand dividedbytheclose interrelationship theyhavewiththe
UnitedStates,and do nothavetheeconomiesofscale or the techni-
cal capabilityof the United States.Moreover,the UKUSA arrange-
mentsgivethe UnitedStatesa massivebridgeheadintoEurope and
the abilityto place European telecommunications and data flows
underconstantsurveillance.
AdmiralTurneris correctthatthe United Statesis the world's
largestdebtor,but thevastmajority of US government debt is owed
to itsowncitizens,withJapanesecompaniesholdinga largepropor-
tion.(Much of theJapaneseholdinghas been reducedin real terms
bythelargedepreciationof the dollaragainsttheyensince 1985-
some estimatesputJapaneselossesat over$350 billion.) Moreover,
virtuallyall of the holdingis issuedin dollars,thenationalcurrency
oftheUnitedStates,whichmeansthattheUnitedStatesis muchless
likelyto be exposed to the possibility of a foreignexchangecrisis
than mostcountries,even when its externaldebts are ballooning.
Indeed,US policymakers fromNixonon havemade use ofthedollar
weapon (as in a series of competitivedevaluationswhen circum-
stancesseemed propitious)and capitalizedon the depthand flexi-
bilityof US financialmarketsto help maintainthe net transfer of
resourcesintotheUnitedStates,whichis thenecessarycounterpart
to theUS balance-of-payments deficits.
This US centralitystemsindi-
rectlyfromthe construction of the BrettonWoodssystemin 1944,
and theUS role in postwarreconstruction.
theDark Side ofthePanopticon

Illuminating
The UnitedStateshas been at theforefront
ofattemptstopromotein-
tergovernmental cooperationto combatthegrowthin theglobalnet-
worksof organized crime, attemptingto bring togetherpolice
(INTERPOL,forexample),customs,treasury, and bank-
intelligence,
ingofficials
as a response.Muchofthecrimerelatesto copyingpres-
tige-nameproducts(such as Rolex and Cartierwatches),whichare
smuggledto (oftenFirstWorld)markets.Much of it relieson high
forexample,in childpornography,
technology, moneylaundering,il-
legal arms,and narcoticstrafficking,and even the growthin the
macabretradein humanorgans.(Organsare takenfromabducted

36 ?
TheGlobalPanopticon
streetchildrenin LatinAmerica, whoare thenkilled,and theirorgans

are implantedinwealthy patientsin privateclinicsin theFirstWorld.)
As noted,the US government and manyseniorpoliticianshave
takena verypublicinterestin moneylaunderingassociatedwiththe
illegaldrug trade,whichwas estimatedto have sales in the United
Statesin excessofUS$100billionin 1991.In 1990theClearingHouse
InterbankPaymentSystem,the primarywholesaleelectronicfunds
transfer system,processedabout 37 milliontransfers betweenUS-
basedand foreignbanksin transactions valuedat about$222 trillion.
So althoughmassivein absolutesize,such moneylaunderingrepre-
sentsonlya smallfraction ofthetotaltransacted.07 A largeproportion
of thefundswerelaunderedthroughtheUnitedStatesand offshore
banks.Muchof thisis launderedthroughelectronicfundstransfers,
butdespitetheirexoticsurveillance technologies,US regulatorsclaim
thatthisis stilldifficult
to track.One wouldimagine,however,that
NSAmightbe able to helpthemin thistask.The UnitedStateshas set
up a seriesof internalreviewcommittees, suchas FINCEN,withele-
mentsdrawnfromthefinancialbureaucracies and thepolice and se-
curityagencies to coordinateits own strategy. To attemptto stop
moneylaundering,FINCEN has a contractwith the Los Alamos
NationalLaboratoryto developa statistical screeningtoolcapable of
identifying"anomalousbankcashholdingsand flagging il-
potentially
and US customshas recommended"barcoding"US
licitactivities,"
currencyin order to "facilitate identificationand tracingof 'dirty
money'as itmovesthroughthelaunderedcircles;theCrimeControl
Actof 1990directsTreasuryto assessthistechnology."08
The UnitedStateshas conducteda largeseriesofnegotiations with
at leastfifty
foreigngovernments on the protocolsforcooperation,
and has putpressureon at leasteighteenothersto complywithitsre-
quests to obtain information in thisarea. The July1989 Paris G-7
Summitestablisheda financialactiontaskforceto promotecoopera-
tionand actionagainstmoneylaundering;the taskforcereportwas
releasedon April19, 1990,withdefinitions of,and recommendations
to stop,moneylaundering.The reportwas endorsedat the 1990
HoustonG-7Summitand the taskforceactivities wereextendedfor
anotheryear.However,theadministration has keptthereal contents
and outcomeofnegotiations - withnotonlytheG-7butalso a large
-
numberofothercountries classified, and has keptitsrecordscon-
cerningthe implementation of US legislationsecret,evenfromthe
GeneralAccountingOffice.09
Some of thissecrecymayhavebeen promptedbythefactthatthe
US intelligenceservicesmakesignificant use of the globalfinancial

Gill
Stephen 37
system fortheirworldwide operations,oftenusingthesystem to laun-

derfundsfortheirownor theirclients'use. Thisaspectoftheglobal
financialsystem was revealedin thecase of thenowbankruptBCCI,
whichwas used by the CIA in a numberof ways,notablyto funnel
fundsto financethesecretwarsin Afghanistan and Nicaragua,espe-
ciallyduring the period (1981-1987) when the directorof the CIA
wasWilliamCasey.Casey was an OSS veteran who ranspynetworks in
Germanybetween1943-1945, and later he was a member to the
AdvisoryCouncil of the ArmsControland DisarmamentAgency.
Caseyalsowasa successful and free-wheeling businessman and served
in
as head of theUS Securitiesand ExchangeCommission the early
1970s;he wasalso head oftheUS Export-Import Bank,which,as Bob
Woodwardnoted in Veil,70 admittedhim to the "centralbankers'
club."
Caseywas appointedbyPresidentReagan to head US intelligence
to improvethe CIA's effectiveness afterthe failuresassociatedwith
the Iranian revolution.He replaced AdmiralStansfieldTurner,
Carter'sintelligencechief.Caseyhad the operational,business,and
financialexpertiseto lead theCIA intothenewconservative era and
to rollbacktheenemy.For Caseythisinvolvedimproving thecoordi-
nationbetweenthe CIA and NSA (see below) and shakingup an in-
telligenceservicedominatedby "HYPs" - graduatesfromHarvard,
Yale,and Princeton.Accordingto Bob Woodward, Caseywasthemas-
termindbehindtheclandestinewarfarepracticedbytheReaganad-
ministration duringthe 1980s.It has been alleged thatthe cost of
such clandestineoperationsbythe CIA and "friendly" governments
werein excessof$2 billionduringthe1980s,and thatthebulkofthis
was stolen fromBCCI by corruptPakistaniofficials.71 Casey met
Hasan Agha Abedi, the founderof BCCI, "everythree or four
months."72 BCCI was used in the Iran-Contra connectionto finance
US armssales to Iran and to the NicaraguanContras,contravening
US statutes and in thefaceofcongressional Atleast$50
opposition.73
millionin fundsforIran-Contra wereraiseddirectly by theCIA from
other (unidentified)governments. Interestingly, a donation of $10
million,apparently fromBrunei,neverreached the intendedSwiss
bankaccountbecause ofa typographical error.74
BCCI eventually collapsed with upwardsof $10 billionin lost or
stolenassetsin more thanseventydifferent countries.The Bank of
England (BOE) finallypulled the plug July5, 1991. The BOE,
on
using itsBritishestablishment connections, managedto fendoffcrit-
icismsofincompetenceand malpractice, and,moreimportant, a US-
styleenquiry(what did take place was the Binghaminquiry, which

kepttheprobe a limitedone and did not pressthe BOE to observe

international bankingsupervisory standardsagreedwiththeBankof
InternationalSettlements). This was despitesubstantial evidenceof
neglect and lax regulationof a bankthat expanded to a value of$20
billion.75
The BOE had evidenceof BCCI malpracticefora consider-
able time(fromat least 1982,and moreclearlyfrom1988,whense-
riousand specificcomplaintswerereceivedbythe BOE concerning
BCCI, and whensevenBCCI staff wereconvictedof drug-trafficking
and moneylaunderingin Tampa, Florida). Price Waterhouse,the
BCCI auditorsin the UnitedKingdom,werealso allowedto escape
fullscrutiny (forsimilarreasonsone wouldsuspect).
Manykeypoliticalfiguresworldwide wereimplicatedin BCCI's il-
legal activities,
includingleading US establishment figuressuch as
Clark Clifford,the formerUS secretaryof defense, and Lord
Callaghan,theformerBritishprimeminister. Callaghanhad been a
closefriendofHasan AghaAbediforat leastsevenyearsand actedas
an unofficial advisorto BCCI.
Mostof the victimsof the BCCI scandalweresmallbusinessesin
more than seventycountriesthroughoutthe world. One million
smalldepositorslost theirmoney,as well as centralbanks,govern-
mentorganizations and investment funds,and government officials.76
The countries involved included several Latin American and
Caribbeancountries:Abu Dhabi, Bangladesh,Belgium,Iran, Italy,
Hungary,Korea, Liberia,Libya,Nigeria,Pakistan,the Philippines,
Saudi Arabia,Senegal,Spain,Switzerland, Thailand,Turkey, United
ArabEmirates,Yugoslavia,and Zambia,each of whichhas a trailof
BCCI briberyand corruption.BCCI had portrayeditselfas "the
ThirdWorld'sbank":a bankthatwouldhelp theunderprivileged of
theworldto haveaccess to globalcreditstructures undertermsand
conditionsordinarypeople could afford.The Kerry Report was blunt
aboutwhatwasreallyinvolved:
TheSubcommittee hasdevelopedextensivedocumentary andtesti-

monialevidenceofBCCI'ssystematic
relianceonrelationships
with,
andas necessary,
paymentsto,prominent political inmostof
figures
the73 countries
in whichBCCI operated.BCCIrecords and testi-
monyfromformer BCCI officials
togetherdocument BCCI'ssys-
tematic ofCentral
securing BankdepositsofThirdWorld countries;
itsprovision
offavors
topolitical anditsrelianceon those
figures;
toprovide
figures BCCIitself
withfavorsintimesofneed.77

Gill
Stephen 39
Conclusions
In thelasttwodecades therehas been a globalshifttowarda system

basedupon a politicsofsupremacy and subordination, a disciplinary
politics that works at micro and macro levelsof everyday life.The
publicrealm, in the narrowsense,is configured lessbythedictatesof
representative government, or indeed self-government in the classi-
cal sense used by Locke, althoughsome elementsof civil society
(bound up withglobal finance)have become self-regulating to the
degreethattheythreatento self-destruct.
It is a contradictory situationin whichthe dominanceof capital
and the politico-military interestsof theworld'smostpowerfulgov-
ernmentare more clearlyassertedin and acrossa range of hybrid
formsof state,of which some are more neoliberal than others.
Althoughone could arguewithsomejustification thattherecentex-
tensionand deepeningofmarketforcesworldwide is thelatestphase
of thebourgeoisrevolutionstretching fromtheGloriousRevolution
of1688,thequestionthen,as now,is "gloriousforwhom?"According
to Christopher Hill, theperiod 1603-1714was perhapsthe mostde-
cisiveperiod in Britishhistory, the momentwhenBritainbegan to
enterthemodernworld.78 However,theconditionofordinary people
hardlychangedat all,and in somewaysitmarkedly deteriorated. The
GloriousRevolutionwas,accordingto Hill,a restoration ofpowerto
thetraditional rulingand propertiedclasses,and was,in effect, a rev-
olutionof the strongand therichagainsttheweakand the poor.It
did, however, createa politicalspace forthe expansionof incipient
bourgeoispower.
Attempts to embeda moresystematic formofneoliberaldiscipline
and surveillanceare growingin the spheresof production,credit,
and consumption, as well as in policingand security powers.How-
ever,at theverypointwheretheglobalpoliticaleconomyis acceler-
atingin termsof the geographicalreach of capitalistrestructuring,
we see a bankruptcy of conventionalpoliticalalternatives, a kindof
historical regression in which the are
changes being linked to archaic
notionsof politicaleconomyand constitutionalism associatedwith
nineteenth-century utilitarianism and liberalism.Such discoursesof
power seek to discipline and to legitimate thenewcompetitive strug-
gle in the streets,in the villages,and in the cities- thepointswhere
thepressures, constraints, and contradictions of theprocessof glob-
alizationare localizedand applied.At the same time,the growthof
the forcesof reactionworldwide, the sense of alienationwithmain-
streampolitics,and the generalperceptionthatgovernments have

becomemoreand moreineffective showsthatthetrajectory ofdisci-

plinary neoliberalism is unsustainable.
politically The intensification
ofsurveillance in theworkplaceand in thestreetsare signsofa crisis
ofmotivation, socialorder,and government legitimacy.
A secondconclusion,whichfollowsdirectly fromtheabove,is that
thegovernancestructures oftheglobaleconomythathaveaccompa-
nied thistrendare inadequate,sociallyirresponsible, and lackingin
democraticaccountability. While the G-7 and associatedinterna-
tionalfinancialinstitutions (IMF,WorldBank,BankforInternational
Settlements) have become the de factoinstitutions of global eco-
nomicgovernance,theirperformance has been farfromsatisfactory
in thelasttwenty years,and theG-7nexusrepresents an incomplete
and inadequateformof the internationalization of authority. The
above examples,fromthe Iranianassetsseizureto BCCI to interna-
tionalcooperationon moneylaundering,theBIS, and IOSCO, show
thatiftheUnitedStates(and itsG-7partners)werereallyserious,for
example,about controllingthe instability, and macroeco-
illegality,
nomiccontradictions of global finance,theycould use a varietyof
measuresto help bringaboutgreaterinternational cooperation.This
wouldallowsomereregulation so that,at leastat themacroeconomic
level,in thewordsofNewDeal TreasurySecretary Morgenthau, pro-
ductioncould become the "master"ratherthanthe "servant"of fi-
nancial interests.Surveillancecapabilitiescould be put to more
sociallybeneficialand accountableuses.
Moreover,the regulatory problemsnotedabove need to be set in
thecontextof macroeconomicand othereconomicpolicies.During
muchof thelate 1980sand early1990s,instead,we havewitnesseda
continuationof the politicsof austerity. This was especiallythe case
in Europe and Japan,as well as in manypartsof the ThirdWorld,
withvirtualeconomiccollapsein manyof the formerly communist-
ruled countries.China and partsof East Asia remainexceptionsto
thisgeneralmacroeconomictrend.Macroeconomic austeritypolicies
producedwhateconomistscall "thefallacyofcomposition"; thatis,if
all deflatesimultaneously (through,say,aggressivebudgetcutting
and taxincreasesfortheimmobilelowerand middleclasses,withtax
breaksfor mobile capital), economic depressiontendsto be pro-
duced. Indeed,in theEuropeancase, therewasa competitive aspect
to statepolicies,despitethe Europeancooperationmechanisms, as
each EuropeanCommunity government competedto providea low-
inflationand probusinessclimate.Thus, ironically, withmacroeco-
nomicausterity some of the contributors to the pensionfundsand
other institutional playersin global financialmarketsthat press

Gill
Stephen 41
consistentlyformacroeconomicausterity would lose theirjobs; un-

employment would become structural, it has in Europe. Macro-
as
economicpolicyneeds to be democratized, not simplymade bythe
fiatof "market forces."Thispointsto theneed fora moresociallyre-
sponsiveformofglobaleconomiccooperationthanis allowedforby
theG-7processas it currently operates.
Moregenerally, a moredemocraticand representative formof the
of
globalization authority is needed. Moreover, some form of collec-
tiveactionis needed to seek to avertecologicalcatastropheand to
sustaintheprecariousbalance betweeneconomicgrowthand devel-
opmentand the integrity of the biosphere.This requiresnew con-
ceptsof multilateralaction,otherthanthoseoftheG-7nexus,which
in effecttendsto grantrepresentation on the pragmaticbasisof ei-
therwealthand poweror military might(suchas proposalsto extend
the G-7to a G-8in thissphere,byincludingRussia,and potentially
makinga G-9,includingChina).
The surveillancepowerof institutions such as the IMF and the
Bank for InternationalSettlements, in conjunctionwiththe new
WorldTrade Organizationand the InternationalLabour Organi-
sation,is considerable.These organizationscould be used, if they
were made more democraticand accountable,to promotean im-
provement in notonlyglobalaccessto capitaland otherresourcesfor
thosewhomostneed them,butalso conformity to civilizedstandards
in theworkplaceand economymoregenerally - standardsthatare
beingviolatedworldwide, includingin the UnitedStates.This is oc-
curringwhileUS Labor SecretaryRobertReichpressesforenviron-
mentaland labor protectionunder the auspicesof the new World
Trade Organization.This typeof moreaccountableand representa-
tivecontrolover the use and dispositionof surveillancecould be
linkedtowhatI call "democratic BythisI mean
cross-conditionality."
thedevelopment offorumsthatwouldallowfordemocraticoversight
of the range of internationalorganizationsand indeed the broad
G-7 process.Such an oversightfunctioncould involveelementsof
globalcivilsocietythatweremorerepresentative of theworld'sciti-
zens.Such agentsofglobalcivilsocietywouldincludegrass-roots or-
ganizations, worker representatives,environmental and women's
groups,and indigenouspeoples, as well as elementsdrawnfrom
mainstream politics.These elementscould be broughttogetherbya
recognitionof a commoninterestin protectingthe biosphere,in
reregulatingtheglobaleconomyso thatitis made morestable,more
sustainable,and more equitable,and a commonaversionto funda-
mentalism ofeithera religiousor a politicalkind.

All of thiswould presupposethe mobilizationof a collectiveand

highlydifferentiated politicalwillat local,global,national,regional,
and international spheresofpoliticallife.For sucha mobilizationto
succeedwouldrequirenot onlyideas and networks but also institu-
tionaland materialcapabilities,accessto resources,and thecapacity
to demonstrate in practicalwaystheabilityto meetthebroadneeds
of the people. Such power,understoodnot in the sense of "power
over"or dominancebut in the positivesense of the mobilizationof
thecapacitiesofpeople to do certainthings, is needed to countervail
and to democratizethepowerofcapitalon a worldscale and to chal-
lenge the discoursesand practicesthatjustifyand serveto sustain
suchdominance.Thisis notthesameas, and does notentail,theabo-
litionofmarkets, or,indeed,thereplacementof themarketas an in-
stitutionby a totalistvisionof stateplanningor the mythof the
construction of a new global panopticondedicatedin Benthamite
fashion to the promotionof the felicificcalculus.It does, however,
mean thatthe constitution of society,and thusof markets,is not
premisedupon the pure commodification of humanlifeand of na-
ture,and it does mean the constructive and creativeuse of technol-
ogy,as opposed to theapplicationand use ofsocialtechnologiesthat
repressand intensify exploitation.This would not producea single
"ethicalstate,"or a necessarily"good"society,but it would provide
minimumcriteriafornewmodelsofglobalgovernance,and fornew
principlesand processesofpoliticalaccountability.
Notes
Thisessayis themodifiedtextofa forthcoming chapterin a collectionI am

editingcalled "North-South and a NewMultilateralism,"
Restructuring to be
publishedbyUnitedNationsUniversity Press,to whomgrateful acknowledg-
mentis made.I wouldliketo thankthefollowing forcommentsand help in
researching thispaper:YoshikazuSakamoto,RobertCox, Kees van der Pijl,
Helene Pellerin,Isabella Bakkar,Frank Pearce, Marcel van Maastright,
StefanosKourkoulakos,GeoffreyUnderhill,Eric Helleiner,Derek Hall,
MartinHewson,Tim Sinclair,MagnusRyner, and an anonymousreviewer. I
am grateful to Henk Overbeekforinvitingme to presentsome of theideas
ofAmsterdam
as a lectureto theUniversity in February1993.
1. Michel Foucault, in Colin Gordon, ed., Power/ Knowledge: Selected
Interviewsand OtherWritings, byColin Gordon,et al. (New York:
translated
PantheonBooks,1980),pp 158-160.[emphasisadded].
2. StephenGill,"TheEmerging WorldOrderand EuropeanChange,"in
R. Miliband and L. Panitch, eds., TheNew WorldOrder.SocialistRegister1992
(London: Merlin Press, 1992), pp.157-196; Stephen Gill, "Economic

StephenGill 43
Globalization and the Internationalizationof Authority:Limits and

Contradictions,"
Geoforum23(1992): 269-284.
3. Fernand Braudel, The Structuresof EverydayLife: The Limits of the
Possible.Civilizationàf Capitalism15th-18th Century,Volume1, translatedby
Siân Reynolds(NewYork:Harper& Row,1979).
4. NikolasRose, "Government, Authority and Expertisein Advanced
Liberalism,"Economy and Society22 (1993): 283-299; see also Graham
Burchell,"LiberalGovernment and Techniquesof the Self,"Economy and
22 (1993): 267-283.There are a largenumberof articleson related
Society
themes,and influenced byFoucault,in thisjournal,especiallybetween1990
and 1993.
5. See, forexample,JamesRosenau,Turbulence in WorldPolitics(Hemel
Hempstead: Harvester Wheatsheaf, 1990); Ronnie D. Lipschutz,
"Reconstructing WorldPolitics:The Emergenceof Global Civil Society,"
Millennium 21: 3 (Winter1992): 389-420.
6. See, forexample,Kees van der Pijl, "RulingClasses,Hegemonyand
JournalofPoliticalEconomy19 (1989): 7-35.
the State System,"International
7. Thomas Hobbes, Leviathan,by C.B. MacPherson,ed. (Harmonds-
worth:PenguinBooks,1968).
and a LetterConcerning
8. See John Locke, Treatiseof Civil Government
CharlesL. Sherman,ed. (NewYork:Irvington
Toleration, Publishers,
1965).
9. Christopher toIndustnal
Hill,Reformation Revolution
(Harmondsworth:
PenguinBooks,1967),pp. 144-145.
10. Christopher Hill, The Centuryof Revolution,1603-1714 (New York:
W.WNorton,1961),p. 248.
11. Ibid.,p. 3.
12. Ibid.,pp. 231-232.
13. Citedin Hill,note9, p. 287.
14. KarlMarxand FrederickEngels,TheGerman edited,withan
Ideology,
introduction byC. J.Arthur(NewYork:International Publishers,1970), p.
122. It willalso be rememberedthatJ.S. Mill,who was a fiercecriticof
Benthamism, and whoMarxdid notconsiderto be a "vulgar" economist,ar-
gued thatthe principlesand benefitsof liberalismwerenot forthe delin-
quent,theimmature, theuneducated,or for"barbarians" (thosewhowould
have grownup outsideof the heartlandof liberalism - thatis mostof the
people on theplanetat thetimeMillwroteOnLiberty in 1859).
15. Karl Marx, Capital, Vol I: A Cntical Analysisof CapitalistProduction,
fromthe thirdGermaneditionbySamuel
FrederickEngels,ed., translated
Moore and EdwardAveling(New York:International Publishers,1967), p.
609,includingfn.1.
16. Ibid.,p. 176.
17. Michel Foucault, Disciplineand Punish:TheBirthofthePnson,translated
byAlanSheridan(NewYork:VintageBooks,1979).
18. Foucault,note 1, p. 146.
19. As the 1992-1993currency crisesin WesternEurope illustrated, the
powerand mobility offinancialcapitalis vast.At one pointin 1992Sweden
wasforcedto increaseitsovernightinterbank rateofinterestto 500 percent
to avoida hemorrhageof short-term hot moneyflowsout of the economy.
Theseforces- in thecontextofa Finnishdevaluationcausedbythecollapse
of tradewiththe formerSovietUnion- caused Swedento devalueitscur-

rencyand striveto makelargeand politicallyveryunpopularcutsin govern-

mentexpenditures.
20. The US freezeorderappliedto threecategoriesofassets:(a) $2.4 bil-
lionofgoldand securities heldin theFederalReserveBankofNewYorkand
$2.05 billiondepositedin US and non-USbanksbased in theUnitedStates;
(b) $5.6 billionin offshoredepositsofUS banksoverseas;and (c) $4 billion
in Iranianassetsin theUnitedStates,includinga Boeing747 plane.Mostof
the assetsin category(c) are still"frozen"in the UnitedStates.The ex-
traterritorialapplicationofPresidentCarter'sexecutiveorder"shockedand
angered the internationalbanking community," but, nevertheless,the
UnitedStatesgainedthe cooperationof Europeangovernments and banks
in implementing thefreezeorder.See MahvashAlerassool, Assets:
Freezing The
USA and theMost Effective
EconomicSanction(New York: St. Martin's Press,
1993). esoeciallvdd. 30-31.
21. Foucault,note 1. d. 6.
22. Forexample,thedebatein thejournalEconomy
andSociety
, 1990-1993.
23. David H. Flaherty,Protecting
Privacyin SurveillanceSocieties:TheFederal
RepublicofGermany, Sweden,France,Canada, äf theUnitedStates(Chapel Hill:
UniversityofNorthCarolinaPress,1989).
24. Abbe Mowshowitz, "The EmergingNetworkMarketplace," proceed-
ingsoftheStrategic ResearchWorkshop, "NewTechnology, Surveillanceand
Social Control,"Queen's University,Kingston, Ontario,Canada,May14-16,
1993.
25. Some studiessuggesta growingtrendtowardthe use of thesecom-
puter-matching techniques,althoughtheyare veryexpensiveand timecon-
sumingwithexistingsoftware. However, newdata-basearchitecture,based on
"object-oriented programming," willovertimeallownewtypesof data to be
added to data basesveryquickly, and therapidmanagement ofvastquanti-
ties of data, unheard of today,will be possibleat much lowercost. See
DesmondMacrae,ΌΟ boy,"GlobalCustodian (September1992): 127-131.
26. The CanadianFederalPrivacy Commissioner's reportfor1993stated
thatCanadianswerein a "technological trance"and theywere,on thewhole,
verycomplacentabout the implications of the new information and other
technologies(e.g.,geneticscreening).Geoffrey York,"PrivacyReportWarns
of 'Big Brother'Computer," TheGlobeandMail,July14, 1993.
27. Simon G. Davies, "The Zones of Surveillance:A Methodologyto
Quantifyand Score Surveillance,"proceedingsof the StrategicResearch
Workshop,"New Technology,Surveillanceand Social Control,"Queen's
University,Kingston, Ontario,Canada,May14-16,1993,pp. 10-11.
28. Indeed, in the UnitedStatesthe "public"police relyincreasinglyon
theirprivatecounterparts in sustainingresidential
and commercialsecurity,
forexample,in NewYorkand Los Angeles.See RalphBlumenthal,"Asthe
Numberof PrivateGuardsGrows,Police Learn to EnlistTheirHelp," New
York July13, 1993;ClareCollins,"HiringPrivateSecurity
Times, Guardsto Cut
Neighborhood Crime,"NewYork Times,August18, 1994.According to theUS
DepartmentofJustice,employment in the 13,000privatesecurityfirmsfar
outnumbers publiclaw enforcement. Privatesecurityspendingwas $52 bil-
lion in 1992,up 57 percentfrom1982,and the sumsdwarfpubliclaw en-
forcementbudgetsby 73 percent.Industryestimatessuggestthat with
presenttrendstherewillbe a privatesecurity armyofmorethan2 millionin

Gill
Stephen 45
theUnitedStatesbytheyear2000.Anothergrowth fromtheculture
statistic
of contentmentis the size of prisonpopulations,whichgrewfrom230 per
as part
100,000in 1979 to 504 per 100,000in 1991.This can be interpreted
of a tendencyto criminalizeand confinethe "dangerousclasses"as one of
thepreferredmeansofsocialcontrolin theUnitedStates. See NilsChristie,
Cnme Controlas Industry:TowardsGulag Western
Style?(London: Routledge,
1993).
29. Marketplace:Households was to be furnishedon CD/ROM disksusable
on microcomputers, at a priceof US$695 forsoftware withan initialset of
5,000 names;each additional5,000wouldcost US$400. The data was pro-
videdbyEquifaxMarketing witha large
Decisions,Inc., whichis affiliated
creditagency, Equifax,Inc.Whatwasdistinctive aboutMarketplace:Households
wasthatitwasintendedforsmall-and medium-sized business.Largecompa-
nies alreadyhave thisdata- suppliedbycompaniessuch as TRW,Equifax,
and Dun and Bradsheet,and frommarketing firmssuch as the Claritas
Corporation - but this is usually sold for single-usepurposes.Lotus cus-
tomerswereto getunlimiteduse of thedata to customizedirectmail,build
records,and for similarpurposes.Nevertheless, Lotus successfullyintro-
duced Marketplace:Business, a companionproduct,whichcharacterizes busi-
ness purchasingpatterns,througha licensingagreement.See Oscar H.
Gandy, Jr., The Panoptic Sort: A Political Economyof Personal Information
(Boulder,Colo.: Westview Press,1993).
30. Bar codes- foundon almosteverything we purchase,includingnews
magazines and books (and things we do not, like unsolicitedmailshots) -
haverevolutionized inventorymanagement, marketing, merchandising, and
partstracking, in a widerangeof activities fromretailto healthcare. They
containinformation thatenablestighter controloverinventory and thecon-
struction of data bases. Moreover, two-dimensional bar codes nowin devel-
opmentcan holdvastamountsofinformation - so muchthat"itwouldallow
a cashregister to playtheWilliamTell Overture. . . witherrorcorrection for-
mulaeto helprecoverthefullmessageifpartofthecode is tornoff. . . [cre-
atinga] fullblowndata communications protocolfor paper . . . greatly
increasingthe speed of movingand receivinggoods." Karen Zagor,"Bar-
codes Take on NewDimension,"FinancialTimes, August20, 1992.This type
oftechnology is economically and sociallyusefulin thatitcan helpto reduce
unwantedinventories and can make the disposalof hazardouswaste,, dan-
gerous chemicals, and medical waste much safer (bar codes can contain
warnings, storagedetails,and emergency instructions as well as identifica-
tion).It has also been suggestedthattwo-dimensional bar codes havepoten-
tiallyvastuses in medicine,particularly in remoteregionswherepatient
profilesand medicalrecordscould be instantly scannedwithoutaccessto a
centraldata base. On the otherhand, the aspectsof humancontrolthat
mightstemfromthesetechnologies are obviousand are ambiguousin their
implications. For example,thestatecould use thenewtwo-dimensional bar
codes on drivers'licenses,passports, or otherformsof publicidentification
to instantly retrieve integratedpersonalprofiles.Indeed,thenewEuropean
Community passportshave computerreadable codes that are routinely
scannedat bordercrossings withtherequisitefacilities. The gainsto policing
are obvious,butquestionsconcerningpersonalprivacy and statesurveillance
remainto be answered.It wouldbe relatively easy,forexample,to use simi-

larscanningdevicesin theprivatesectorto gainaccessto theprofiles forhir-

ingdecisionsand otherdisciplinary matters.
31. Jeremy Bentham,TheWorks Bentham,
ofJeremy publishedunderthesu-
perintendenceof his executor,John Bowring(Edinburgh:WilliamTait,
1859). On the Panopticon,see VolumeI. Bentham'sfulltitleforthiswork
was"ThePanopticonor theInspection-House. Containingtheidea ofa new
principleof construction to
applicable any sortof establishment, in which
personsofanydescription are to be keptunderinspection;and in particular
prisons,poorhouses,lazarettos,houses of industry,
to penitentiary-houses,
manufactories,hospitals,work-houses, mad-housesand schools.Witha Plan
ofManagement Adaptedto thePrinciple."
32. JamesB. Rule, "High-TechWorkplaceSurveillance:What's Really
New?"proceedingsof the StrategicResearchWorkshop,"NewTechnology,
Surveillanceand Social Control,"Queen's University, Kingston,Ontario
Canada,May14-16,1993.
33. RobertTaylor,"Resettingthe Clock,"FinancialTimes,February10,
1993.
34. Antonio Gramsci, Selections
fromthePnson Notebooks.
Quintin Hoare
and GeoffreyNowell Smith,eds. and trans. (New York: International
Publishers,1971), pp. 279-318,especiallypp. 308-310,"Taylorism and the
Mechanisation oftheWorker."
35. Ron Sakolsky,"'DisciplinaryPower,'the Labor Process,and the
ConstitutionoftheLaboringSubject,"Rethinking Marxismo(1992): 115-126.
SakolskycitesHarleyShaiken,Work Transformed (NewYork:1984).
36. Elaine Draper, RiskyBusiness.GeneticTestingand ExclusionaryPractices
in theHazardousWorkplace (Cambridge:CambridgeUniversity Press,1991).
37. Priscilla Regan, "Surveillanceand New Technologies:Changing
Natureof WorkplaceSurveillance," proceedingsof the StrategicResearch
Workshop,"New Technology,Surveillanceand Social Control,"Queen's
University,Kingston,Ontario,Canada,May14-16,1993,pp. 8-9. Thereis a
difference betweengeneticmonitoring (e.g., to ascertainifworkersare ex-
to
posed damaging health risksat work and therefore of benefitto workers
and to employers)and geneticscreening, whichsmacksofthesurvival ofthe
fittest.
Moreover, geneticchangesmayoccuras a resultof processesuncon-
nectedto theworkplace.
38. Regan,ibid.,also mentionsthatconcernshave risenin the United
Statesconcerning geneticissuesas a resultoftheHumanGenomeProject;an
effortto findand map thelocationand chemicalsequenceofall genes,and
thusto obtaindetailedinformation aboutbiologically determined featuresof
individuals(the "humangenome"containsthebasicmaterialfromwhichthe
humanbeingdevelops).Thisvastscientific endeavormaybe completedearly
in the nextcentury. Some see thelogicalnextstep- froma panopticview-
point- as a data base containinginformation aboutthegeneticmakeupof
wholepopulations, withinformation latercontainedin barcodes,facilitating
scanning,storage,and exchangeat diversegeographicallocations.
39. Sakalosky, note35, pp. 117-118.
40. Gandy,ThePanoptic Sort,note29.
41. Accordingto Gandy,people in theUnitedStateswhoare lesswelled-
ucatedand whowatcha lot of televisionare morelikelyto assumethatthe
unrestrictedprovisionof personaldata,especiallyto privatefirms, is a good

Gill
Stephen 47
thing,leadingto betterproductsand services.These people are also those

whotendto be mostintegrated intotheproductionand consumption struc-
turesof thoseaspectsof NorthAmericanlifethatare mostroutinized, pre-
dictable,calculable, and controlled.The latterphenomenonhas been
referredto as the "MacDonaldization one social counterpart
of Society," to
the spreadof panopticistaspectsof social control.See GeorgeRitzer,The
McDonaldizationof Society:An InvestigationInto the Changing Characterof
Contemporary SocialLife(ThousandOaks,Calif.:Pine ForgePress,1993).
42. An exampleof how thesesystems are linkedis the increasinguse of
prenatalscreeningto avoidthebirthof malformed babies.Implicithere is
theideologyof the "perfect" baby.Ifpregnantwomenrefusetests,theymay
be denied privatehealth insurance.Privateinsurersdo not swear the
Hippocraticoath.Theirmaininterest is financial:to avoidpayingforexpen-
sivelong-term care,whichwillreduceprofits.
43. AntonyGiddens, The Consequences of Modernity (Stanford,Calif.:
Stanford University Press,1990),especiallychapter4, pp. 112-150.
44. J.K. Galbraith,The Cultureof Contentment (New York: Houghton
Mifflin,1992).
45. GlennCannerand CharlesA. Luckett,"Developments in thePricing
ofCreditCard Services," Federal
ReserveBulletin(September 1992): 655.
46. Ibid.,table2, p. 656.
47. James Jorgenson, MoneyShock: Ten WaystheFinancial Marketplaceis
Transforming Our Lives (New York: AMACOM, AmericanManagement
Association, 1986).
48. Cannerand Luckett,note45, table5, p. 663.
49. Cannerand Luckett,note45, p. 666.
50. Ibid.
51. SusanYellin,"YourFingerprints EnsureCreditCardValidity," Toronto
Star,August2, 1993.
52. DeborahM. Rankin,"Rehabilitating a ShatteredCreditRating,"New
York Times,January16, 1993.
53. Ibid.
54. On the class structures encompassedby this nexus of power,see
Stephen Gill "The Global Political Economy and StructuralChange:
GlobalisingElitesin the EmergingWorldOrder,"in YoshikazuSakamoto,
ed., GlobalTransformation(Tokyo:UnitedNationsUniversity Press,1994),pp.
169-199.Involvedin the "G-7nexus"are not onlytheleadersand deputies
(financeministers and governors of centralbanks)meetingsof theG-7,but
also theinternational conferences ofsecuritiesadministrators(IOSCO) and
the meetingsof centralbank governors,for example,in the Bank for
International Settlements (BIS). Each of theseexercisesrelieson the prac-
tice of "mutualsurveillance," althoughdominantinterestsclearlytend to
prevail- forexample,theUnitedStates.In thecase oftheG-7deputies,for
example,the estimatesand proposalsof the membercountriesare scruti-
nizedand criticized bythemanagingdirectoroftheIMF,whichproducesre-
portson the worldeconomy.These estimatesare also comparedto those
providedbytheOECD, in itscountry and otherstudies.In turn,theG-7pol-
icymaking processis intimatelyrelatedto scrutinyby,and inputsfrom,pri-
vateorganizations and councilswitheitherparticularor generalinterests,
such as the Groupof 30 (financialinnovationand supervision);individual

firmssuch as Moody's,Standardand Poor's,IBCA (privatecredit-ratingof

corporationsand governments);or big playersin the currencymarkets
(mainlyinstitutional - fund managers,pension and insurance
investors
companies- or wealthvindividualspeculators
suchas Georere Soros).
55. GüntherBroker,"Automation of SecuritiesMarkets:Implications
for
their Functioningand Surveillance,"presentationto the President's
Committeeof IOSCO (InternationalOrganisationof SecuritiesCommis-
sions),proceedingsof the Thirteenth
AnnualConferenceof IOSCO, Mel-
bourne,Australia,November13-17,1988,p. 7.
56. JohnPlender,"Througha Market,Darkly," FinancialTimes,May27,
1994.
57. Ibid.
58. Jeffrey
T. Richelsonand DesmondBall, TheTiesThatBind:Intelligence
BetweentheUKUSA Countries,
Co-operation second ed. (London: Unwin Hyman,
1990),p. 301.
59. RegWhitaker, and Intelligence
"Security in thePost-Cold-War
Era,"in
Ralph Miliband and Leo Panitch,eds., New WorldOrder1 SocialistRegister
1992
(London:MerlinPress.1992). d. 119.
60. Bob Woodward, Veil:The SecretWarsof theCIA 1981-1987 (New York:
Simonand Schuster, 1987),pp. 22, 46, 47.
61. Whitaker, note59, p. 119.
62. Woodward,note 60, p. 47. Althoughfarfromperfectly effective
(the
CIA consistently overestimated Sovietmilitarystrengthin the 1970s and
1980sand a lack of coordinationbetweenNSA and the CIA meantintelli-
gencein Iranpriorto therevolution in 1979wasverypoor),nevertheless this
intelligencenetworkhas virtually controlledentireThird Worldgovern-
ments(e.g., in the 1980s,Habré of Chad; Zia of Pakistan;Doe of Liberia;
Marcosof the Philippines;Nimeriof theSudan; Gemayelof Lebanon; and
DuarteofEl Salvador).
63. For example,the draftversionof the Pentagon'sDefense Planning
GuidefortheFiscalYears1994-1999,arguedthattheUnitedStatesshouldac-
tuallystrengthen itsmilitary
in thepost-Coldwarera and theUnitedStates
wouldinsiston therightto monitortheactivities ofothers.SincetheUnited
Stateswasnowtheonlymilitary superpower, and otherstateswerecuttingde-
fensebudgets,theUS positionin theworldwouldbe strengthened further if
therewas a larger,more flexible,and more mobile military, so thatthe
UnitedStatescould act independently ifitcouldnotsecurecollectiveaction
(as it did successfully
in the GulfWar). See PeterTarnoff, "No One Needs
AnotherHero,"JapanTimes, March23, 1992.
64. Whitaker, note59, p. 121.
65. Examplesmentionedby Woodwardin Veil(note 60) are Columbia
Professor RobertJervis,whowrotea 100-pagereport- whichwasscathing -
on intelligenceand the Iranian Revolution,and formerJohnsHopkins
University president,ProfessorLincolnGordon,whochairedexternalreview
committees duringthe 1980s.Anotheris Harvard'sJosephNye,a Clinton
nomineefortheCIA.
66. Citedin Whitaker, note59, p. 126.
67. US General AccountingOffice,MoneyLaundering:TheU.S. Government
is
RespondingtotheProblem,
(WashingtonD.C.: USGAO/NSIAD-91-130),p. 13.
68. Ibid., p. 50.

Gill
Stephen 49
69. Ibid.,pp. 52-53.

70. Woodward, note60.
tothe
in A Report
71. See JohnKerryand HankBrown,"TheBCCI Affair,"
on ForeignRelationsbytheSubcommittee
SenateCommittee Narcotics
on Terrorism,
andInternational 102ndCongress,2nd Session(Washington
Operations, D.C.:
US Government PrintingOffice).Hereafter to as theKerry
referred Report.
72. TackColhoun,"BCCI:BankoftheCIA," Covert Action 44 (1993): 40.
73. Ibid.,pp. 40-41.
74. WilliamS. Cohen and GeorgeJ.Mitchell,MenofZeal:A CandidInside
oftheIran-Contra
Story Hearings(NewYork:Viking,1988),pp. xii-xx.
75. FinancialTimes,FinancialRegulation November,
Report, 1992,pp. 2-6.
76. Kerry note71, p. 99.
Report,
77. Ibid.,p. 101.
78. Hill,note 10.


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