29 Oct

Reversing the globalization backlash

Posted By Politybooks

By Colin Crouch

Reversing the backlash against globalization requires active politics in two opposite directions: the strengthening of democracy beyond the level of the nation state; and strenuous efforts at local economic development.

In The Globalization Paradox Dani Rodrik argued that we have a choice among democracy, national sovereignty and hyper-globalization, a trilemma, and that we could have any two of these, but not all three. ‘Hyper-globalization’ clearly implies the neoliberal ideal of totally unregulated globalization. Democracy separated from the nation state – the only form of democracy capable of dealing with the global economy – implies global democracy, which is impossible to achieve. A non-democratic nation state is compatible with hyper-globalization, because it implies a national ‘sovereignty’ willing to accept governance by the market and corporate power alone. This seems to lead to the conclusion that we can preserve democracy only by limiting political ambitions to the nation state and seeking to use it somehow to evade globalization.

But there is an alternative. Globalization does not have to be ‘hyper’. It can be moderated, through regulation by international agencies, which, although they cannot be fully democratic, can be subjected to far more democratic pressure than is common today. It is not feasible for global bodies like the World Trade Organization or the International Monetary Fund to have directly elected parliaments, as has been possible in the European Union, but there can be public debate over the policies that national governments will pursue within these organizations. National politicians need freely to admit that there are problems that are beyond their reach, that they need to cooperate with others within international agencies. Governments’ policies within those agencies must then become fiercely debated within national politics. Is it unrealistic to imagine a general election in which an opposition made a major issue out of a government’s failure to work with other countries within the WTO to suppress slavery, child labour and inhuman working hours? If Donald Trump had demanded the incorporation of International Labour Organization standards within the rules of the WTO instead of retreating into protectionism, he would have made a major contribution to good global economic governance.

The world needs political will across a number of countries based on recognition that: the high tide of neoliberal deregulation has been damaging; and that national communities can only reassert regulation of that process by pooling their sovereignty and trying to introduce as much democracy as is practicable into that process. The gap between the three points of the Rodrik triangle is reduced when it is accepted that globalization requires some regulation, that the international agencies necessary to such regulation need elements of democracy, and that the democracy of the nation state best expresses itself as pooled sovereignty within that framework.

The local in the global
This approach then has to be combined with attention to local economic development and subsidiarity. Across the democratic world there has been a notable geography to the appeal of xenophobic forces. Cities whose residents can feel they are part of a flourishing future have resisted that appeal – from Budapest and Vienna to Liverpool or San Francisco.
Market forces in the post-industrial economy favour a small number of large cities, with very little trickle down from them. Whole regions and many smaller cities have been left without any dynamic activities that can retain the young and give people a sense of pride in their local Heimat. It is not enough to provide generous social support for people who are unemployed or left in low-income occupations as a result of these processes, or to encourage firms and government organizations to locate back-office and warehouse activities in such places. We need collaboration among EU, national and local authorities to identify new activities that can thrive outside existing successful centres, and provide the infrastructure that will facilitate them. Quite apart from economic development in itself, people also need high quality local environments of which they can be proud. This requires considerable public spending – a strategy that belongs to the left, not the populist right that claims to be the main defender of Heimat. Success in this task will not be achieved everywhere; there will always be sad areas that fail to find a place in a changing world. But combinations of imaginative national and local planning with entrepreneurship, and determined attention to the geography of dynamism, can reduce their number and therefore the numbers of those who feel left behind.

These strategies address the discontent of those who feel neglected, particularly working-class men of the dominant ethnicity who believe that politicians, especially of the left, have shifted their attention to the inequalities endured by women and ethnic minorities in post-industrial sectors. Their complaint is justified: widespread acceptance of neoliberal ideas made purely economic inequalities an unmentionable. But it cannot be addressed by an attempted return to an industrialism that is lost, less still through misogyny and xenophobia.

Multi-layered citizens
The globalization backlash has a cultural as well as an economic dimension, and so must the fight against it. A globalized world needs citizens who are at ease with a variety of layered identities, happy in our skins with loyalties and identities of varying strengths to our local community, our town or city, our region, our country, Europe, and with good will to our common humanity. These loyalties must be able to feed on and reinforce each other, not be set in zero-sum conflict. Many people have shown a capacity to do this, but to continue like it they need to feel confident and secure. The task of future politics is to create environments in which these values can flourish, not snuff them out under an insistence on the monopoly claims of national or ethnic identity. And neoliberals must learn that unless they are willing to accept the public policies and taxation levels that sustain such environments they will lose the globalization project that is so dear to them.

Colin Crouch is Professor Emeritus of the University of Warwick, and the External Scientific member of the Max Planck Institute for Social Research at Cologne. His new book The Globalization Backlash is now available from Polity.