Globalisation should not – indeed, must not – be abandoned, but it needs to be rebuilt around a new normative framework of ‘re-embedded post-neoliberalism’
Six months ago, we published a SPERI blog series that set out the case for seeking to build collectively a new and different globalisation to the neoliberal form shaped from the early 1980s onwards. We described this as a process of reglobalisation, of ‘redoing’ globalisation better, and held out the prospect of actually being able to restructure contemporary globalisation around ‘post-neoliberal’ ambitions and values.
We recognised the necessity of moving from theory to practice and concluded our final post by promising another series that would offer examples of reglobalisation in action. To this end, we’ve sought the help of other political economists to write posts that put some flesh on the bones of the concept, each addressing a different policy arena ranging from tax to trade, finance, the environment and migration. In advance of publishing them – which we will do hereafter on a weekly basis – we can happily reveal that that there is, indeed, much that we can realistically do to reform globalisation for the better.
Before this, though, we must again rehearse the intellectual underpinnings of the core concept of reglobalisation. These derive from two premises. The first rejects the idea of a reified globalisation, framed as some sort of external actor bearing down on us all with an overbearing technological inevitability. Instead, it acknowledges the existence of global neoliberals as real people who knowingly drove forward and defended the new behaviours that over time have come to constitute globalisation. In other words, neoliberal globalisation could in theory have been done differently and could therefore be different again in the future. We summed up this point by arguing that structures of political economy do exercise powerful constraining influences on actors, but, as Mark Blyth reminded us some time ago, they ‘do not come with an instruction sheet’.
The second asserts that globalisation, of some sort, is here to stay, whether we like it or not. All political economy now takes place unavoidably on a global stage. As again we argued previously, it is implausible to envisage a full-scale retreat from 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 – and even global wealth and poverty – chains. What this means, to be specific, is that the prospect, still held out by some, of there being available to us a return to a pre-globalisation world of autonomous national economies is simply delusionary. Although it is undoubtedly newly fashionable on both right and left, ‘deglobalisation’ is a chimera that avoids the key question of how to offer global citizens substantive solutions to the problems created for them by global neoliberalism.
We can do this best by reshaping globalisation for the future into a different, and more attractive, set of economic, social and political processes. States have acted previously to construct and adjust global orders, and this means that they can do so again. In making this argument in the earlier blog series we built on the insights of other analysts. We noted that, as long ago as 1997, Dani Rodrik famously asked in the title of a book Has Globalization Gone Too Far? We made mention of his subsequent calls for ‘a sane globalization’. We drew attention to Eric Helleiner’s identification of a middle-of-the-road model of global governance which he dubbed ‘cooperative decentralization’. We also highlighted Colin Crouch’s recent call for ‘moderate forces of left and right to stand together for a regulated globalization against xenophobic forces’.
We claimed that these were all invaluable glimpses of what reglobalisation needs to be like (that is, sane, cooperative, decentralised, regulated), but argued that, nevertheless, they did not specify with enough precision the political bargain that necessarily has to underpin such a process if it is to gain ground and take off. To frame this properly, we looked back to look forward and recalled the precise definition of the ‘embedded liberalism’ that John Ruggie defined as the key ingredient restored to the world economy at Bretton Woods in 1944.
As Ruggie saw it, the task at Bretton Woods was to manoeuvre between the extremes of both nationalism and liberalism and craft a ‘compromise’ (Ruggie’s telling but often-forgotten word) that would ‘safeguard and even aid the quest for domestic stability without, at the same time, triggering the mutually destructive external consequences that had plagued the interwar period’. In a key passage he went on to say this of his celebrated ‘embedded liberalism compromise’:
Unlike the economic nationalism of the thirties, it would be multilateral in character; unlike the liberalism of the gold standard and free trade, its multilateralism would be predicated upon domestic interventionism.
This contains the vital clue that opens up the politics of reglobalisation. It shows how we can begin to create a new normative framework within which to reshape globalisation. We chose to describe this as ‘re-embedded post-neoliberalism’, a phrase that obviously needs some unpicking despite its manifest reference back to, and adjustment of, Ruggie’s original, and very well-known, formulation.
So, firstly, what do we mean by the open-ended notion of ‘post-neoliberalism’? Like all critical political economists, we acknowledge the power of path-dependency, but contend nevertheless that we are entering an era beyond the neoliberalism of the recent past, even if we’re not quite there yet and cannot, as such, be sure of its precise ideological shape. Indeed, while some have sought to envision theoretical and practical forms of post-neoliberalism – most notably, as Jean Grugel and Pia Riggirozzi have noted, in Latin America during the so-called ‘Pink Tide’ – these have not been developed or expressed fully, have remained regional rather than becoming global in scope, and have experienced a sustained backlash from reactionary populist forces.
The lesson is clear: if progressives don’t envision an ordered and socially-beneficial form of globalisation to fill this emerging space, reactionaries will quickly chart an illiberal and regressive one, probably around a malign, destructive, authoritarian form of intensified neoliberalism. Indeed, this process of ‘disaster capitalism’ is already underway and is increasingly well understood. From Naomi Klein’s Shock Doctrine to her more recent book This Changes Everything, as well as Saskia Sassen’s striking Expulsions and Mariana Mazzucato’s Value of Everything, it seems that highly unequal battles over resources, land and access to capital or decent jobs (and perhaps even clean oxygen to breathe) in a context of continued hyper-capitalist growth, the rise of digital monopolies and debilitating environmental degradation, will come to define the middle of the 21st Century.
Nonetheless, we also suggest that globalisation as a political project can still only be expressed as a form of liberalism, albeit one that is ‘post-’ (meaning distinct to) neoliberalism. It is, after all, fundamentally grounded in notions of openness and freedom. If the challenges we face as a society – regarding the rules we set about environment, tax, finance, migration and so on in a context characterised by the disorientating upheavals hinted at above – are to be managed in a way that is remotely equitable, this can only happen at the global level according to some kind of post-neoliberal ideological settlement.
However, it is vital to note here that liberalism as an intellectual tradition in political economy has long contained within it a tension between a ‘pure’ and a ‘compensatory’ variant, with each ascendant at different times. Although ‘pure’ neoliberalism crashed and burned in the 2008-9 global financial crisis, the ‘compensatory’ strand – which first emerged in the English ‘new liberalism’ of T.H. Green and L.T. Hobhouse from 1880 to the First World War and was rejuvenated in the writings of John Maynard Keynes – remains available to us when faced with the challenge of rethinking globalisation beyond neoliberalism.
Much could be said to elucidate this body of thought fully, but for now the summary provided by Robert D. McKinlay & Richard Little will suffice: ‘the major divergence of the compensatory from the pure liberal is the contention by the former that the pure liberal devotes insufficient attention to the issue of the equality of the distribution of choice and opportunity’. We suggest that ‘post-neoliberalism’ can most plausibly be built around a renewed ‘compensatory’ liberalism that is both markedly different and substantially ‘dialled down’ from the excesses of the hyper-neoliberal era. This might not sound very ambitious and it’s certainly not utopian. But it has the great merit of being politically realistic, genuinely ‘post-neoliberal’ and of itself still quite radical. As our former Sheffield colleague Anthony Arblaster once put it, what is ‘best about liberalism’ – i.e. a belief in freedom and equality – ‘is too good to be left to the liberals’. Possessed of that concern about the equality of the distribution of choice and opportunity, highly compensatory forms of liberalism effectively constitute meaningful social democracy.
Secondly, what is the significance in this context of the concept of embeddedness and why do we need to attach it to this vision of ‘post-neoliberalism’? The term derives from the economic history of Karl Polanyi, makes a strong appearance in sociology via the work of Mark Granovetter and, as we’ve seen, was picked up in political economy by Ruggie. It refers to the endowment within public agencies of the authority and capacity to manage domestic and international economic affairs actively. As Orfeo Fioretos and Eugénia C. Heldt put it in a recent paper: ‘A highly embedded system is one in which public agencies have the authority to intervene in capital, labor, product and other markets. In highly disembedded systems, by contrast, public agencies lack effective means to structure the behaviour of market participants’.
Such agencies come in many forms, but at the global level we are talking essentially of the ability and willingness of ‘our’ nation-states, acting on behalf of us as their citizens, to respond with a ‘compensatory’ instinct to intervene energetically in economic and social matters in order to enlarge, and equalise to some degree, the range of choice available to their peoples. In this conception of global governance states would once more be permitted to pursue legitimate social purposes and enjoy the necessary national policy spaces to manage their economic development successfully, without fear of retreat into a regressive nationalism. They would in fact be encouraged to work together in a collective, cooperative way, acknowledging the multilateral imperative to ensure the fairest distribution of gains over time.
We’ve done our best to elaborate what is unquestionably a complicated notion! We see ‘re-embedded post-neoliberalism’ as distinctive in its normative ethos, but also flexible and malleable in its practice, providing a framework for different positive futures. The series will now move in subsequent posts to detailed explorations of the limits of the possible in reforming the global political economy in the spirit of reglobalisation.