speri.comment: the political economy blog

‘De-globalisation’, or ‘re-globalisation’?

The former is the new project of the populist right; the latter needs to be the new vision of the centre-left

Professor Tony Payne, Director of SPERI

Tony PayneGlobalisation is under attack these days from all quarters. It has of course long faced criticism from the left for being divisive and undemocratic.  That’s not new.  But, remarkably and in an act of brazen but effective political theft, that core critique – which in effect alleged that the purported universal benefits of globalisation had not ‘trickled down’ inclusively enough and that the process was instead fostering growing and increasingly outrageous inequalities – has been purloined over the course of the past couple of years by the populist right.  As we know and now hear almost every day, Donald Trump and his followers look forward to initiating a process of what is being called ‘de-globalisation’ whereby companies are hauled back to their national bases, rust-belts are made good again and trade wars seen as valid tools of national diplomacy.

How should progressive, or just sensible, people respond to such a challenge? Well, the first step towards an answer to that question is not to defend the status quo.  After all, governments of the centre and centre-left in the USA, the UK and other parts of Europe have not only presided over much of the recent expansion of globalisation, but have also arguably entrenched its legitimacy by rendering it, via their embrace, a cross-party, more or less universal, project of the West.  This is one of the key points trenchantly made, for example, by Thomas Frank in recently asking, of the US Democrats under the Clintons and Obama, ‘whatever happened to the party of the people?’

Nor, secondly, should globalisation be treated as some kind of inevitable, technology-driven process that is beyond political explanation. As I’ve argued previously on this blog, that’s an analytical mistake that lets off the hook ‘the real actors in the great game of the new globalising political economy’. These, I suggested, were easy to spot: ‘the big global corporations; the political leaders of the major Western states; and the formers of opinion in the global media and in leading universities as well, all of whom have collectively built and defended ideologically the theory and practice of global liberalism’ over the past forty or so years.

The third response that should be made to the Trumpist case for ‘de-globalisation’ is to insist that globalisation, of some sort, is here to stay, whether we (or, for that matter, the Trumpists) like it or not. All political economy now takes place unavoidably on a global stage.  There can be no full-scale retreat from that in a world in which so much economic activity and so many of the prospects of economic development are now shaped by the complex linkages formed by global value and production chains.  But – and it’s a pretty big but – globalisation does not have to be neoliberal globalisation.  It can be reformed; controlled more; steered better, however you prefer to put it.  At least theoretically (and I will come in due course to the problem of the practice), it is without doubt possible to conceive of a different mode of globalisation, acknowledging, as Wolfgang Streeck has very recently put it, that ‘a little less globalisation is quite all right if it gets us a little more democracy’, by which he means in the main the democratic controls possessed by existing nation-states.

I am suggesting, in other words, that there is actually quite a lot that states could do collectively, at least potentially, to reshape globalisation for the future into a different, and much more attractive, economic, social and political process. States have acted previously to construct or adjust global orders.  The most famous example of such a collective shaping of a new global order came at the end of the Second World War when emergent global liberalism was successfully embedded within a range of national constraints.  But, although the grandest in scale, it has not been the only moment in modern times when states have come together to put their hands on the tiller of the global political economy.  Another illustration, albeit in more muted and temporary fashion, was the immediate reflationary response of the leading G20 countries to the 2008-9 global financial crisis.

In any case, it is always vitally important to try to imagine what else might conceivably be done, especially in dire political circumstances. For, if progressive and sensible people do not do that, there never exists a plausible vision against which to challenge contemporary realities.  So let’s conduct a little ‘thought experiment’ and ask what a process of recasting globalisation around a different set of more social democratic values (a process which I shall call ‘re-globalisation’) might begin to look like over the next period if the following imagined political moves were to occur:

  • Leading global states agree to assess at each annual G20 summit the condition of the global economy (i.e. growth, investment, employment, inflation) and agree amongst themselves the necessary national measures to foster its continuing health and dynamism.
  • All states whose societies contain inadequately funded and dubiously controlled banks and other financial institutions (and there are plenty) sign a compact mandating their own national supervisory bodies to work in conjunction with each other, supported by key global bodies like the Financial Stability Board and the Bank for International Settlements, to bring them back under satisfactory regulatory control.
  • Key states that are losing badly-needed tax revenue to the unseen hands of global corporate tax management decide collectively to challenge their declining fiscal bases by making the necessary national legal changes to empower them to collect taxes effectively from global business actors. They could even, if necessary, establish some kind of incipient ‘world tax authority’, an idea floated not long before his untimely death by the late Sir Tony Atkinson.
  • New commitments are made by the Boards of Governors of the IMF and the World Bank to take forward still further the rebalancing of voting powers between member-states that has tentatively been started, although as yet without great impact or full implementation, over the past few years.
  • Member-states of the WTO react to the failure of the Doha Trade Round by embarking on serious reform of the Organisation with a view to reorienting its purposes in future around socially progressive and egalitarian, as well as merely trade-expansionist, goals (as recently explored in a good book by Rorden Wilkinson).
  • All countries negotiate and sign an agreement, brokered by the ILO, whereby their governments commit themselves to make the necessary legislative changes at national level to rebuild the rights of trade unions and to doing this in a mutual, non-competitive way, thereby again enabling the bodies that represent workers to defend their members in humane and proper fashion as and when necessary.
  • Leading global states, notably the US, EU members and China, act to break the log-jam caused by the current management of climate change negotiations by the United Nations and move to establish a new global institution tasked with bringing climate change fully into the global policy debate alongside issues of growth, stability and development where it belongs.

One could easily go on adding in other possible reformist moves. But it’s to be hoped that enough has been said to frame the vision and establish the argument.  To some, these moves will appear to be outrageously interventionist and therefore unacceptable; to others they will no doubt come across perhaps as ‘nice ideas’ impossible to implement.  For what it’s worth, I’m not that far away myself from that latter position.

But I’m not quite there. I know that states have the legal and political authority and the governmental capacity to do all of the above, if they want to.  There are precedents in every case.  I believe too that it is necessary sometimes (and this may be such a time, as Jeremy Green recently argued here) to theorise alternatives, to try to think how else globalisation could conceivably be – to imagine! It is usually easier then to see why things are not currently arranged as we might want them to be.

Of course, the reason they are not, simply put, is ‘politics’, and politics can change. I will therefore come back to the politics of ‘re-globalisation’ in due course, perhaps after allowing a period for the Trump Presidency to begin to show its colours.

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