The debate on globalisation has been raging now for some ten years. Starting from a celebratory account of a borderless world [Ohmae (1990)], scepticism about the extent and the novelty of globalisation [Hirst and Thompson (1995; 1999)], fear and loathing about its destructive consequences [Sassen (1998), Burbach (1997)] the debate has continued. This is a debate which excites sharp differences in books written by developed country authors [see for a contrast Friedman (1999), Grieder (1997), Barnes (1999) all writing from a US perspective] as much as writings by developing country authors [Amin (1997)]. The State has been pronounced as powerless in the face of globalisation [Ohmae (1990)] and in turn the powerless State has been denounced as a myth [Weiss (1998)]. Many fear that globalisation has brought about the rule by global corporations who are bound by no law except that of money making [Korten (1995)], that the new order is creating a 'global apartheid' [Alexander (1996)].

The position taken in this paper avoids any of the extremes of hope or fear. Globalisation is a phase of capitalism, but not so much a new phenomenon as a revival or resumption of a similar phase in the late 19^th Century. As such, it is in its early stages of development. Capitalism in its global phase is taken to be a disequilibrium dynamic system which reproduces itself through cycles and crises. This is what I have elsewhere labelled a classical or a nineteenth century Marxist view [Desai, (forthcoming), (2000)]. Thus it is neither a utopia [Friedman (199) or Ohmae (1990)] nor a dystopia [Burbach (1997), Barnes (1999)]. In order to understand globalisation as a phase of Capitalism, it is necessary to revive certain ideas from classical political economy. The main idea is that of the economy is an organism which is the result of human action but not of human design. Adam Smith and Karl Marx share such a view which was doggedly held and propounded during the twentieth century by Hayek [For a comparison of Marx and Hayek, see Desai (1997) and Sciabarra (1995)].

The organicist view is contrasted with a mechanistic view which I argue prevailed through much of the twentieth century thinking. This view considers the economy (or society) as a result of a deliberate if faulty design and holds certain agents - capitalists/corporations, government/politicians, bankers/jews - as responsible for the design and operation of the machine that is the economy. Thus in this view, globalisation could be a creation of Western powers or global/transnational/multinational corporations. Their ideology would be the hegemonic ideology. It would then be programmatic to regulate/overcome/abolish such malevolent agents and establish a world government or New New Deal etc.

The view taken here is that globalisation is neither a utopia nor is it merely or creation of ideology. Ideas, especially the revival of the nineteenth century organicist ideas play a crucial role in our understanding of globalisation. But even then organicism has to be distinguished from neo-liberal or conservative ideology which is often as mechanistic as its socialist twin.

In order to lay down some markers, I list the characteristics of globalisation and its consequences in Box 1. This is done for reasons of brevity but the lists are as ecumenical as is possible in such a subject. After that, the history of capitalism over the years 1870-1970 is succinctly described. [A more detailed version is available in a book length manuscript which will see publication in the near future Desai (forthcoming).] This history is central to the question as to whether globalisation is a mere ideological epi-phenomenon or something more substantial. The history then leads to an articulation of the period 1970-1990 which is crucial to the break-up of the phase of 'capitalism in one country' that ruled in the short twentieth century 1914-1989. It also allows us to contrast the two philosophical views - organiscist and mechanist - in a simple form in Table 1.

Following this somewhat lengthy introduction, there follows an analysis of the contemporary phase of globalisation. Three questions are posed and answered - why has globalisation happened and happened now, whether it is a benevolent or a malevolent process and if there are any predictable limits to the process that globalisation represents. A historically specific but analytically coherent account is presented in the brad tradition of Classical (as against Leninist) Marxian political economy. The essay concludes by bringing together the main elements of the essay.

BOX 1