In many respects Nigel Harris's book is simply yet one more celebration of neoliberal ideology: of the belief in an inherent tendency of unfettered capitalism to growth and rising living standards. As such it would hardly be worth reviewing here. My main motive for writing this review, however, is that there is an interesting way in which a turning of Harris's thesis 'on its head' can reveal some of the real tendencies at work in the relationship between capital, the state, and the process of globalisation. Needless to say these tendencies do not embody the rosy future that Harris claims to identify.

The starting point for such a critique is found in the title of the book itself: the return of cosmopolitan capital. Cosmopolitan capital seeks to break the bounds of the territorial national state and the idea of the return of this cosmopolitan character implies that capital once possessed this feature and is now returning to it after a long period of subordination to the state. The core of Harris's neoliberal perspective is that of the essentially dysfunctional relationship between the territorial national state and capitalist development. In its early period of development, long before industrialisation, merchant capital was serviced by the city state which provided a combination of low taxation and protection for the trade routes carved out by merchants.

The territorial national state that emerged in Northern Europe is, in contrast to the city state, underpinned by a dynamic of territorial consolidation and war-making which is a constraint on the freedom of capital to roam where it will. Thus from the eighteenth through to the latter part of the twentieth century capitalist development was straight-jacketed into the territorial state's war making activities. Capital continually attempted to break the boundaries of the territorial state and has now, finally, with the globalisation of the late twentieth century, achieved this and returned to its inherently cosmopolitan nature. This new globalised capitalism is regulated decreasingly by national territorial states and increasingly by networks of voluntary and non-government organisations (NGOs) and great cities and offers a future of stability, rising living standards, and the elimination of war.

Stood on its head, however, the thesis can lead to a useful inspection of the ways in which the relationship between capital and the modern state is changing. The latter, in the form of the Keynesian welfare state provided, as well as the minimal resources of security (law, police etc.) which all states provide in one way or another, some essential underpinnings for industrial capitalist development in the spheres of socialisation (education and welfare) and infrastructure (public utilities, communications networks). These in turn provided the basis for political compromise linking the working class to the state through forms of welfare citizenship. The growing abandonment of these state forms in favour of self-regulation by capital and a minimal state intervention increasingly oriented to security rather than welfare, has profound implications. They are arguably not the rosy ones that Harris sees.

THE CITY STATE AND SECURITY

He begins by defining the essence of capitalism as trading. "Trade… has a stronger claim to being the essence of capitalism than any other activity." (9) This is of course wrong, and completely blurrs over the distinction between mercantile and manufacturing capital. But, as I shall argue, it paradoxically leads to some interesting insights. It is on this basis that Harris establishes the inherently cosmopolitan nature of capitalism. Merchants were naturally suspicious of the state and its taxes; traders formed networks based on trust (often derived from family or ethnic cohesion) rather than relying simply on the state for protection and the enforcement of contracts. States, or rather ancient empires, were generally based on land tax and the exercise of military power. The rulers of these empires were often suspicious of merchant capitalists as subversive cosmopolitan groups. Capitalists would only support the state if it was in their interests to do so, if, for example, the state granted and protected trading monopolies for particular groups of merchants. But loyalty to the state was contingent on this benefit and thus "capitalists were seen as potentially subversive of the political order, unpatriotic, not committed to the state agenda." (44) The latter consisted largely of war-making and territorial expansion.

So far, so good. While Harris can be accused of blurring the distinction between types of capital, his specification of the relation between merchants and feudal princes or ancient empires is broadly correct. He then argues, again uncontroversially, that there was a particular type of state, in the ancient world and continuing up to, broadly, the seventeenth century, which was fully in accord with the interests of merchants. This was the city state, epitomised by Venice, which was entirely based on mercantile trade rather than feudal territorial domination and was explicitly oriented to the mercantile agenda rather than that of territorial domination and taxation.

Thus city states 

"were built to draw resources from trade, banking, ship repair, the swapping of intelligence and manufacture rather than land taxes. Here rulers often promised to levy no unjust taxes to attract traders, even offered tax incentives to merchants to locate their operations there, sometimes built fleets to protect them in the sea lanes, created marketplaces and regulations to govern them, dredged harbours and built wharves and warehouses." (11-12) Referring to Venice: "The 'heart of the state' (as the Venetian government called it in 1509) was a great complex of state capitalism, the famous Arsenal [whose purpose was] to build, equip and arm the galleys of the fleet…" (30) 

In short the heart of the city state was security: the protection of the merchant fleets. Taxation for extraneous war making, the ruling of large tracts of territory and subjection of non-urban populations was not a high priority for the city state, though of course its citizens had to be fed. It was not interested in war as territorial expansion but for the purposes of keeping open trade routes. What we have, in the form of the city state, is an apparatus closely focused on issues of security and protection which is precisely what merchant communities wanted. This is in fact an interesting analogy for the changing dynamics of the state under globalisation, though Harris does not follow it up.

To explain the importance of this, it will be useful to jump ahead of the argument a little. Harris has been justly criticised by Marxist reviewers for blurring the distinction between mercantile and industrial capital. Thus Martin Thomas, in a critical review of Harris, writes:

While merchants could do business for long centuries by making accommodations with princes, but essentially constructing their own networks which cut across the borders between princes, with a fully-developed capitalist mode of production that ceases to be true. The large capitalist enterprise must interact with states at a thousand points. It has to have its headquarters embedded in a specific framework of law, market regulation, and physical and human infrastructure. (Thomas 2003)

In other words a major criticism of Harris is the avoidance of the reciprocal relationship between the territorial state and capital accumulation. But more of this later. For now, suppose that, as one of the key features of globalisation, manufacturing capitalism has taken on many of the features of mercantile capital. If this were the case then the city state would give us a guide to the type of state that is now (re)emerging as appropriate for globalised (cosmopolitan) capitalism. Not just merchants but all forms of capitalists would construct their own networks cutting across the borders of territorial states, make accommodations with various states and, above all, demand from the state security and protection rather than the more elaborate functions that modern territorial states, until recently, provided both to capital and to citizens as a whole. When we look at such a development from the standpoint of the abandonment of the welfare state, the deterioration of the infrastructure in many even advanced capitalist countries, we can see these radical ideas as the inverse of Harris's rather celebratory account of capital and globalisation. But this is to jump ahead a little.

THE INDUSTRIAL CAPITALIST STATE

It is his discussion of the modern territorial state that Harris departs most dramatically from anything resembling a Marxist account. Instead of carefully exploring the relationship between the state and capital he asserts an a priori antagonism in which the modern state is driven by an inner logic of warfare and territorial expansion which, although it may lead rulers to foster capitalism for the purposes of a war economy, constrains and hinders the cosmpolitan logic of capital. Capital and the state have different territorial logics. The natural network structure of commercial relations was progressively disrupted by the needs of state building such that:

"One logic, that of the state, the territorial ruler, came to subordinate and completely reshape the other, that of capital… 'Natural' economic geography, that defined by natural features (rivers, seas, deserts, mountains, resources) was sacrificed to the interests of the political order: ultimately cosmopolitan capitalism was sacrificed to the creation of a set of national capitalisms in the interests of states." (48)

Capitalist development appears here as a purely natural process following the rhythms of nature, geography and (presumably) human needs. Historically, left to its own devices it would have developed thus were it not for the fact that the state, with its territorial and war-making ambitions, got in the way. Such a rosy account of state-free natural capitalism in which "the logic of territorial power does not correspond to the logic of capitalism nor vice versa."(47) might be welcomed at a gathering of the followers of Hayek or even libertarian anarchists, though Harris does not quite commit himself to such positions. There is some degree of interdependency between capital and the state, even if an uneasy one. Trade depends on government for security and legal regulation and the modern territorial state has continued to fulfill these functions which Harris sees as most adequately performed by the city state. Likewise the territorial state, whose prime function-Harris quotes Martin van Crefeld (1991)'has always been to fight other states'-is, with the industrialisation of warfare, dependent upon capital for resources. Hence in Europe the requirements of warfare shaped the development of capitalism. The latter became "a system of warring national economies or of national capitalisms." (52)

Thus the reprocity between capital and the state is a rather grudging, minimalist affair. The state needs capitalism to fuel its (the state's) autonomous drive to war and conquest. Capitalism only needs the minimal protection of the state, as epitomised in the earlier city state, but finds itself being coerced into the nationalist war-mongering of the Western European territorial state. This portrayal of the capital-state relationship is crucial to Harris's rosy view of capitalism. Capitalism basically only ever needed minimal input from the state, mainly around issues concerning security. The nastier aspects of nineteenth and twentieth century industrial society-the preoccupation with war and conquest-are due to the state as opposed to capital. It is therefore a reasonable inference that capitalism is capable of autonomously, without the assistance or coercive intervention of the state, meeting most human needs. Thus when capitalism starts, as under present conditions of globalisation, to break the boundaries of the state and regain its natural cosmopolitan nature, not only will it continue to meet human needs-such as the elimination of poverty-but will also lead to a marked reduction in warfare. The state will be less able to constrain capital to purely national warfaring needs. We are in for a prosperous, peaceful twenty first century.

The first problem is that the relationship between capital and the state is a lot more complex than Harris appears to think. It is interesting that, despite his desire to connect his thesis in some way with aspects of his Marxist past, he completely avoids a confrontation with, even if only to show their errors, those Marxists who have confronted the issues of the relations between state and capital. In particular one would have expected some confrontation with the work of David Harvey whose (2003) book The New Imperialism was published around the same time as Harris's book. As a Marxist geographer, Harvey is well known for his attention to the spatial aspects of capitalist development. Also Giovanni Arrighi, in his (1994) book The Long Twentieth Century (quoted at length by Harvey) focuses on the distinct logics of the process of capital accumulation on the one hand and the territorial state on the other.

Harvey begins with a quote from Arrighi in which the latter specifies precisely the different logics of capital accumulation on the one hand and the territorial state on the other. The territorial state seeks the augmentation of its power in relation to other states. In pursuing this goal it is constrained by the political and military situation and, in a democracy, by the electorate. The state operates in bounded territorialised space, its time frame is determined by events such as elections. It is a fixed entity in terms of space unless of course it becomes subject to geographical conquest or disaggregation.

Capital, on the other hand seeks profit maximisation. It is constrained only by legal regulation and social pressure from the territories in which this accumulation takes place. It operates in continuous space and time. Individual capitalist firms come and go, through a process of mergers, location changes and business failures. Arrighi's question is: how does the relative fixity and logic of territorial power fit with the fluid dynamics of capital accumulation in space and time?

All this would be music to Harris's ears. So why didn't he quote Arrighi and Harvey? Maybe because they start out from a much more sophisticated position; namely, the complex and contradictory relationship between the state and capital rather than the simplistic 'the state gets in the way' view espoused by Harris. The task of concrete analysis is precisely to show how this relationship of simultaneous antagonism and interdependence works out in practice.

Despite his attempt to specify the new imperialism of the late 20th and early 21st centuries, Harvey ends up giving a rather classic account. But in the face of Harris's onslaught a statement of the blindingly obvious is very much to the point. Harris concedes, that capital accumulation needs a minimal protection and security such as that provided best by the city state but, he goes on, historically this then which forced capital into a dependence on the territorial state in whose arms it then became overwhelmed and diverted to a purpose not its own. By contrast, as Harvey and Arrighi point out, rather the territorial state and capital accumulation needed each other even though their logics also conflicted. The key to this is, in a word, imperialism.

Capital accumulation has, as Harvey-a geographer-points out, a territorial and spatial dimension. Harris does not face this fact. The reason he does not is precisely because he has already decided that the essence of capitalism is merchant capital which has no interest in territorial consolidation or ruling populations per se. But manufacturing and industrial capital needs territory: coal mines, rivers, natural resources, and of course, a compliant labour force. Its needs are nothing if not territorial. The division between town and country, the formation of the modern working class and the intricate relationship between the bourgeoisie and the state is seen, by Harris, as somehow a process of the state cajoling the bourgeoisie into a militaristic warmaking project in which they would rather not have participated.

We can take the militaristic and territorial enlargement projects of the state for granted for the moment. How does this relate to capital accumulation? Firstly, Harvey points out, following Hannah Arendt (1968) that the expansion of capital accumulation simultaneously expands the minimum territorial state size required to be hegemonic in the international competititon between states. This doesn't mean a state must just grow within its own boundaries, but it needs also to dominate and annex other areas. If other states are industrialising then a state wishing to dominate the others must grow spatially as well as in terms of capital. It must access and keep other states from accessing, new sources of raw materials, labour forces etc. If the state coerces capital to make war, then capital certainly sets the conditions under which such conflicts can be won. The military project of the state and the aims of capital accumulation are not, after all, so much at loggerheads. Harvey notes the limits to this in the argument of Paul Kennedy in The Rise and Fall of the Great Powers there is a constant tendency of overextension and overreach by states who end up running large empires.

The state is dependent on capital accumulation but the converse is also true. Capital requires the state to push forward the frontiers, either by direct colonialism as during the nineteenth century or by varieties of liberal governance as in the present period, of what Harvey terms accumulation by dispossession. The latter is the opening up of new markets, commodification of previously non market production (which these days takes place also within states through privatisation of hitherto public services) formation of new labour forces etc. Of course some of the forms of coercion involved could be provided privately by capital itself. This happened in the early stages of capitalist development with armed trading companies and private mercenary armies, something that is reoccurring in the global South and the significance of which will be dealt with presently. Not all warmaking is directly reducible to the interests of capital accumulation. There is no direct reduction of the interests of the state to those of capital. But throughout the history of capitalism an awful lot of warmaking has been about carving out new markets and resources for particular groups of capitalists and preventing other groups of capitalists from getting their hands on them. Capital accumulation and the geographic expansion of states has been an intimately interconnected process. We shall return to these issues presently.

A second aspect of the dependence of industrial capital on the state has been for expenditure on urban management, police and public order, education, basic health care to secure the supply of labour power. These basic requirements can only be provided by the state as collective capitalist. They might be termed the socialisation functions of the state or, simply, the welfare state. True, these were not initially obvious in the early stages of industrial capitalism but the urban chaos and pitiful health and educational standards of the urban working class soon make them so and forced capitalism to divert resources for their provision. It is not that these processes are not also intimately interconnected with warfare. Minimal levels of health and education are necessary not only for working in factories but also for fighting in armies. The connection between military power and public health was a central feature in the development of the modern welfare state.

Harris notes that in the post Second World War period war-making shifted to welfare which "led to a major increase in the productivity of work." (139) while "The national capital project, driven by the state, immensely enhanced the capacity to produce for those who embarked on the contest of states." (140) But all this is just a temporary phase and a precursor to "the beginning of the end of the old system of competitive national capitals… Capital escaped to recreate… a cosmopolitan system beyond the old power of governments." (140)

All this is familiar stuff yet Harris seems to downplay it in his view of the state as a constraint on capital accumulation. It is as if key functions such as the management of urban space and the reproduction and socialisation of the labour force could have been managed by private capital were it not the state's determination to hitch the whole process to war-making. Perhaps Harris's obsession with the dysfunctionality of the territorial militarised state to capital is related to the Permanent Arms Economy theory which he once espoused. He appears to have stood the theory on its head. From a particular variety of Keynesian intervention which saved capitalism after the Second World War and engineered the subsequent long boom, the war economy has now become its opposite: a drain on the natural dynamic of capitalist expansion. In both cases any discussion of contradictions and crisis tendencies internal to the process of capital accumulation is almost completely absent.

GLOBALISED CAPITALISM AND THE RETURN OF THE CITY STATE

But having said all this I wish to return to the point made at the beginning of this review: that in a distorted form, Harris is saying something useful. Consider three points fundamental to his argument. First, the model for capitalism as such is mercantile rather than industrial capital. Secondly, mercantile capital is truly cosmopolitan and requires only minimal albeit flexible and carefully planned, protection and security functions from the state, such as were provided to merchants during the sixteenth century by city states such as Venice. Thirdly, capitalism has during the present period broken the bounds of the military-industrial state and returned to its true cosmopolitan nature. Harris presents, in an inverted form, a thesis on the current crisis of capitalism and its association with globalisation and the changing role of the state. The inversion consists in the fact that while he sees the developments he portrays as the beginning of a new epoch of growth and expansion, they can in reality be seen as the symptoms of serious crisis.

Harris sees one of the key aspects of globalisation as the victory of capital over the state. Or, rather, that capital has at last broken free from the bonds of the military territorial state and returned to its original cosmopolitan nature. This has been achieved due to a 'surge' sufficient to enable capital to break free of the gravitational pull of the state.

"the present surge of capitalism… seems to have attained the character of systemic self-perpetuation, to have created self-generating growth so that neither disasters not the actions of states can ultimately frustrate this drive… If this is so, then we can say of capitalist society-as opposed to capitalism-that it arrives only with globalisation in the last quarter of the twentieth century." (13-14)

Key to the arrival of capitalist society as opposed to capitalism existing within the interstices of the military territorial state is the pushing back of the frontiers of the state through privatisation which signifies nothing short of "a full assault on the war-making state and its capital project." (130) What has replaced the state as the co-ordinator of economy and society? Harris, in a similar way, perhaps, to Hardt and Negri (2000), sees the state as having been displaced by

"the dispersal of powers in an immense network of dense regulation, directed by hundreds of different specialised agencies (including in some cases national governments), often operating with the common agreement of governments rather than with the power to force conformity of punish disobedience." (219)

Of course states have not disappeared, rather they have become part-the most important part-of this network of specialised agencies and capital is crucially dependent on them. And it is important to qualify Harris in one respect: cosmopolitan 'capital' takes the form of cosmopolitan capitals. Any implication that new forms of regulation have ended the intensifying competition between blocs of capital, even if each is more free to roam the world in a cosmopolitan manner, must be firmly resisted. But nevertheless the relationship between capital and the state has changed. And it is here that the analogy of the return to the city state is quite useful. The minimal state, with its focus on security, is part of this network of decentralised regulation since it no longer claims to regulate society or capitalist production as a whole as did the territorial state. The opening up of the regulation of social process to private capital-and hence to new forms of conflict and instability-can be seen in the demise of public welfare and the declining role of the state in the management of public space.

The demise of welfare

Having celebrated the emancipation of capital from the state Harris has to acknowledge that this emancipation leads, among other things, to a loss of tax revenue. This stems from two sources. Firstly, from multinational corporations using their new global mobility to head for low tax regimes. There has, he notes, been as shrinking of corporation tax as a proportion of tax revenues. Thus in the United States pre-1940 federal corporation tax was a third of total tax revenue. By the mid-1990s it was 12 percent (221). Secondly, there has been a massive growth in the untaxed criminal and informal capitalist economy estimated at nearly 25 percent total world output (222).

Now it would be nice if all the tax revenue that capital provided to the state was spent on war-making. This would be plausible if capitalism itself was essentially about trading. But to the extent that it is about manufacture and the organisation of space and populations then, as we have noted above, states have undertaken some crucial expenditure on socialisation functions. It follows that to the extent that capital has emancipated itself from the state then it has also abandoned a dependence on these socialisation functions. Or rather, it can decreasingly afford to pay for them. The tax burden for their provision will be pushed onto the working class itself and at the same time many of the services involved, such as health care, will have to be purchased as commodities rather than be supplied by the state as public goods. In the meantime, global capital is able to make use of technological advance to downsize its skilled worker force and, for unskilled labour supply, outsource and relocate to those areas of the globe where it is cheap and, when and if that cheapness disappears, head somewhere else. Governments meantime have to reduce corporation tax to try and keep manufacturing plants, offices, communications nodes etc., within their boundaries.

This is a symptom of crisis rather than health. It is, as Marxists like David Harvey and Robert Brenner have pointed out, ultimately about a developing global crisis of over-accumulation of capital in relation to profit opportunities. One symptom of the crisis of profit opportunities is the predominance of a growing mass of speculative finance or fictitious capital (Kennedy 1998) unable to find profitable investment outlets and therefore reproducing itself only by speculation in futures, derivatives and various financial instruments rather than in the production of commodities. Manufacturing capital, pushed on by this growing mass, is desperate to cut costs and uses its increasing global mobility to find the cheapest locations so as to secure profit on investment over as short a time period as possible. Harris's notion that capital in general has re-adopted the cosmopolitan character of merchant capital is, therefore, to some extent a useful way of understanding the current crisis of capital accumulation!

The process is aided by technological advance which, by reducing dependence on a highly socialised skilled labour force, makes all but the most basic welfare expenditure dispensible. (Teeple 2000) The result is of course considerable urban and social chaos summed up by reference, in the currently fashionable terminology, to the social exclusion of large sections of the poor in large cities in the global North and the exclusion of whole states and regions of the global South.

So, Harris is correct that capital has returned to its cosmopolitan nature. But he fails to see what is involved in this return. The fact that industrial capital is becoming more like mercantile capital-mobile and cosmopolitan, with minimal dependence on the state as far as welfare and the management of space is concerned-is the source of considerable crisis. What is involved in industrial capital re-assimilating to older, mercantile, forms of capitalism is precisely a weakening interest in the socialisation functions of the welfare state with the consequent crisis of the latter and the impoverishment of large numbers of people. Harris cannot see the sources of crisis here because he never distinguished between mercantile and industrial capital in the first place. Despite his mention, noted above, of the relation between welfare and labour productivity, he never seemed to have understood how crucial both socialisation and the management of space were for industrial capitalism and hence the consequences of abandoning them.

Again, odd bits of realisation of what is happening filter through. Harris touches on the crisis engendered by the inability of the state to deliver the welfare standards that the masses still demand. He notes that globalisation means that "the perimeter of political management, the administrative reach of governments, no longer encompasses the decisive economic variables." (210) Nevertheless the pressure of electorates, less inclined to give up hard won welfare rights leads to a situation in which political parties are increasingly "obliged to promise things that are not within their power to deliver." (210) Again, Harris notes this but fails to see the roots of a political crisis of the modern state because, from his neoliberal standpoint, people will be able to find other, private, ways of meeting their needs. There is no crisis, just change.

The theme is repeated in other areas. Thus he fully admits that globalised capitalism is producing massive poverty and that social inequality has suffered a 'staggering increase'. He notes that in 1870 the world's 17 richest countries had per capita incomes 2.5 times that of rest of the world and by 1990 this gap had widened to 4.5. (245-6) "But still consumption continues to improve sufficiently for most measures of demographic mass welfare to improve." (246)

Harris is preoccupied with the familiar thesis of the declining ability of the (territorial) state to manage economic and political affairs; something he regards as a positive development. However, aspects of his overall argument could be developed in a more critical way. Capital, he argues, has returned to its cosmopolitan nature which was paramount before it became hitched to the war-making ambitions of the territorial state. As noted above, this has negative rather than the positive consequences he emphasises. By the same analogy, it has been suggested, the state has also returned, to something more akin to the functions of the old city state which was, as Harris usefully notes, concerned less with the management of populations and territory and more with providing armed security for (mercantile) capital. The provision of police and security, the management of the poor as a potentially dangerous social stratum: these are increasingly the predominant functions of the state which are gradually displacing notions of welfare and social citizenship. The latter are relegated to the realms of private provision where they become simply commodities purchased in the market by those who can afford them.

The decline in the management of space

The other crucial function which the state provided for industrial capitalism was the management of space, something which Harris sees as always having been more to do with the territorial and war-making aspects of the state than anything to do with capital and its inherent cosmopolitanism. But as with welfare when, as Harris correctly explains, capital regains a cosmopolitanism under conditions of globalisation, and assimilates to the characteristics of mercantile capital, then these space management functions fall into decline. Harris cannot have it both ways. If the management of territory is mainly an impetus of the military territorial state rather than of cosmopolitan capital then, since the latter is prepared to pay less in taxes to the state, territorial management is going to suffer.

We can see the truth of this in the urban crisis which has developed over the last third of the twentieth century. Spatial exclusion is a component of social exclusion. Harvey, in a discussion of the development of urban policy in the great cities of the North, Harvey makes a distinction between capitalism as a force developing the forces of production and, latterly, as a barrier to further development.

In the past, capital regarded cities as important places which had to be efficiently organised and where social controls needed to operate in some sort of meaningful way. We now find that capital is no longer concerned about cities. Capital needs fewer workers and much of it can move all over the world, deserting problematic places and populations at will. As a result, the coalition between big capital and bourgeois reformism has disappeared. (Harvey 1997: 20)

The weakening of the coalition between big capital and bourgeois reformism for the organisation of urban space and territory can be seen, like the weakening of the welfare state, as an aspect of the return of capital to-in Harris's terminology-its cosmpolitan nature. Cosmopolitan capital does not think twice about urban decay because it can always move, as Harvey notes, elsewhere and is less concerned about a well housed, fed and educated work force.

Harris has nothing to say about all this. Neither does he have anything to contribute on the larger manifestation of the same phenomenon: the exclusion of large areas of the global South, particularly in Africa. He notes the 'lack of advance in Africa' but this does not seem to undermine his thesis that the new self-sustaining growth of cosmopolitan capitalism will solve all these problems.

However, taking Harvey's earlier discussion as a guide it can be argued that just as capitalism once developed the great cities of the global North, imperialism, although of course a form of brutal accumulation by dispossession, did develop colonial societies. It built railways, communications, functioning legal systems, urban centres, education systems (which, even if restricted to a small minority of the native populations, were later to produce a generation of national liberation leaders). This process of opening up new areas for capital continues but in the context of the new forms of global network regulation. It takes new forms which are less conducive to the development of either the state or the social structure. A key feature of the new forms of imperialism is that rather than direct state force from colonial occupiers, governments in the global South are being required to themselves undertake the reorganisation of their economies and social structures to make themselves attractive for cosmopolitan capital. These indirect relations with client regimes in the global South are mediated through a variety of non-governmental organisations and international financial institutions saddling poor countries with debt and then demanding the retreat of the state from even basic public services such as water supply so as to create more opportunities for cosmopolitan capital. In particular, regimes in the global South are being enjoyned to demonstrate 'good governance' and administrative competence to attract (often speculative) capital. In the same way inner city communities in the North are being enjoined to develop 'community cohesion' so as to minimise anti-social behaviour and make themselves more attractive to mobile cosmopolitan capital. As Freeman and Kagarlitsky (2004) have recently suggested, the ability of many states in the global South to adhere to the requirements of 'structural adjustment' while retaining their ability to function as states is stretched to breaking point.

None of this constitutes any problem whatsoever for Harris. As far as he is concerned, footlose cosmopolitan capital is still quite capable of developing societies in the global South, as well as the inner cities of the North if only governments and local authorities in those areas correctly adjust to the agenda set by the 'dense network of regulation' (for which read the international financial institutions under US hegemony) and open up (i.e. privatise) their meagre public services and cheapen their labour supply to create new profit opportunities for private capital.

Yet over large areas of the global South, as with the decaying inner cities of the North, the consequence is that footlose cosmopolitan capital no longer invests in infrastructure which does not immediately yield a profit or is crucial to sustain the profits of existing investments. Investment is concentrated in those areas and in those social conditions which will yield a quick profit. Thus, in the global North, central business areas of the city flourish while surrounding inner cities or peripheral housing estates decay. Meanwhile in the global South capital protects its areas of resource extraction while providing privatised services, even water supply, only to those who can pay, which in poor countries, excludes the mass of the population. Today large areas of the global South have, contra Harris, been abandoned to "global poor relief and riot control." (Cox 1995 quoted in Duffield 2001)

This is precisely because cosmopolitan capital has a different orientation to imperialism: not the development of territory but something approaching simple short term plunder. Rather more mercantile than industrial perhaps! That is something rather to be expected from the combination of intensifying competition for profitable outlets in global markets and the dominance of speculative financial capital pursuing short term profits. The result is an increasing orientation to short term profitability by capital as a whole in a regime dominated by what the American economist, Bennett Harrison, called 'impatient capital'. (Harrison 1994) Organised crime and various elements of shadow or informal economies are of course variants of 'impatient capital' operating under conditions in which violence and coercion in the short term are the viable roots to profits which can then be legalised by money laundering through by no means unreceptive banks and financial markets. Conditions in some of the Eastern former state planned economies, as well as the global South, and indeed inner city areas of the global North, provide ample illustration of this.

The notion of the city state, with its emphasis on security rather than the development of territory, as the appropriate shell for cosmopolitan capital, is thus also a useful analogy for the forms of political and social control which accompany these processes. The city state dynamic manifests itself in the defended 'export zone' where countries in the South can attract private capital only by brutal repression of trade union and welfare rights, and in the fortified 'gated communities' where the rich are defended by electronic surveillance and private security guards. Other areas of territory-the ghettos, inner cities, peripheral regions-can be left to fend for themselves. In Iraq the city state tendency is there in the form of the highly defended governmental zones and the continual diversion of funds allegedly destined for 'reconstruction' into security and protection of the oil fields.

We can also see something of these dynamics in the current US occupation of Iraq. The US certainly has neither the intention nor the military resources to hold and develop the country as a coherent territory. But it will occupy the oil fields and try to install a puppet government which will be just powerful enough to secure a manageable level of stability, mainly through armed force.

The re-assimilation of the territorial state to the model of the city state and of manufacturing to that of merchant capital is a useful analogy-but no more than that-on which to hang a description of some of the changes in capitalism which are usually described by the vaguer terminology of globalisation. If we read Harris from a different standpoint he gives us some quite enlightening analogies!

WAR-MAKING AND CAPITAL

Harris is constrained by his argument to make the less than plausible claim that the declining influence of the territorial state in relation to network regulation heralds a decline in war and conflict. His inability to see war as capable of being caused by groupings and forces other than territorial states is of course fundamental to his argument. He certainly cannot locate any impulse to warfare in capital accumulation itself. He is not the only one to hold to this proposition (see Hardt 2002) There are of course two impluses in the process of capital accumulation which may provoke war.

The first is the competititon between capitals. The city state, providing security services to sixteenth century merchant capital was in fact every inch a war-making state. The only difference from the territorial nation state is that the city state protected trade routes rather than conquered large tracts of territory. When Venice manoeuvered the Fourth Crusade into an expedition against Constantinople, this was nothing if not about control of trade. Harris acknowledges this. The fact that mercantile capital was cosmopolitan and wanted to wander the face of the earth thus in no way suggests that particular groups of merchants were not prepared to fight each other for control of trade routes and supplies. It is a common mistake to associate globalisation with the emergence of some amorphous phenomenon of 'global' or 'transnational' capital as if the latter had somehow overcome the fact that capital in general only appears on the face of the earth as particular capitals each competing for profit opportunities and therefore necessarily recruiting whatever forces are available-which usually means states but can also include private armies, criminal gangs and other non-state entities. Decentralised regulation means decentralised war, not the absence of war.

This weakens the notion that only the territorial state has an interest in war. In reality, the territorial state waged much war for capital even if it also had its own agenda which clashed with the interests of particular blocks of capital. The city state made war because it was in the interests of the merchants it protected to do so. The state under globalisation, has, and this is my argument not Harris's, returned to many of the characteristics of the city state, just as capital has recovered its cosmopolitan leanings. But the argument that because it is less associated with the direct regulation of territory, it therefore has less interest in war and violence is surely wrong.

The second impulse to violence on the part of capital is of course the need to dominate territory itself for purposes of capital accumulation. We have already pointed out that manufacturing capital needs to do this to secure labour supply, raw materials etc. This involved, in classic imperialism, the destruction of pre-capitalist forms of economy and society and the colonisation of populations and natural resources. Only complete ignorance (or self-induced amnesia) concerning what Marx called primitive accumulation and what Harvey calls accumulation by dispossession as continuing features of capital accumulation could possibly imagine the cessation of these violent impulses on the part of capital. The weakening of the territorial state, to the extent that it has occurred, not only leaves the minimal security-oriented state but also private capital itself directly as potential sponsors of violence.

Harris is by no means ignorant of the changed dynamics of war. He is sophisticated enough to realise that what is occurring at the present time is a changed nature of war rather than the decline of war per se. It is true that the weakened power of the territorial state has produced a decline in classic inter-state war, a phenomenon rendered in any case unthinkable with the advent of nuclear weapons. But he persists in seeing these new wars (Kaldor 1999, Duffield 2001) as predominantly civil wars caused by corrupt states in the global South locked into the old territorial ambitions and, entirely dysfunctional to any process of capital accumulation. The implication seems to be that once these states are reformed, weakened and absorbed into global regulation networks then the impulse to war will cease.

But such states, particularly in Africa, are already weak and are easily appropriated or destablised by non-state groupings engaged in what Mark Duffield (2001) has termed network war. That is to say warfare conducted, over large areas of the global South, by decentralised combinations of elements of local states, guerilla factions, private mercenaries, warlords and ethnically based private armies, criminal gangs etc. Such wars often break out when the juridical state, as weak client regime, buckles under the strain of structural adjustment and can no longer provide a minimum of economic or social stability to its population.

The key point is that network war is sustained precisely through the links between the networks of shadow illegal economies through which the various participants operate and the networks of cosmopolitan capital. These links are sustained by the trading of raw materials (diamonds, oil and timber and of course drugs) the profits from which are then used to purchase small arms in markets which, despite numerous official prohibitions and sanctions, are sustained by legitimate arms manufacturers. Capital is complicit in violence even in those areas of the globe in which war and violence appear as antithetical to further capitalist development.

Harris seems to be aware of these developments yet he can never draw the conclusions. Despite all this proliferation of new forms of armed conflict in an increasingly destabilised world, and the links between new wars and multinational capital, he continues his claim that the world is becoming a better place and is now "set upon a process which ultimately can bring the elimination of war." (217) and that "global integration carries with it the promise of defeating poverty by weakening the state, weakening that systemic drive which enforces social differentiation as well as war." (238)

CONCLUSION

Harris's book is in many ways a neoliberal rant and as such can be expected to have a short shelf life. I have suggested that he nevertheless, if read 'upside down', provides interesting ways of looking at the current situation.

REFERENCES

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