The end of globalism?
Last week, John Ralston Saul, a renowned philosopher, novelist, political penseur came to Demos and provocatively pronounced the “end of globalism”, presenting a thesis he developed in his recent book The Collapse of Globalism and the Re-birth of Nationalism. John believes that grand economic theories rarely last more than a few decades, and the current one, globalism, is dead. Sounds crazy? Not quite. He’s far too smart to suggest that things like the internet, global communication & media, or international travel are all on the verge of disappearing. Rather, he is talking about a growing rejection around the world of the dominant economic theory which globalism is pushing: free market capitalism (including of capital), privatisation, limited government intervention, and the expansion of international trade.
John batters the sceptics with a litany of telling examples. Latin America’s – some of it anyway – conscious rejection of neo-liberalism. Rising protectionism (especially anti-Chinese) in the US and Europe. A reassertion of the nation-state’s power (think for example of developing countries at Cancun in 1999). He could go on.
Something is definitely happening. But John pushes his thesis too far. Firstly, extant indices of economic globalism do not bear his thesis out. The think tank KOF’s index of political, economic, social globalization shows that since 1970, the world is becoming more globalised every year. Foreign Policy magazine’s index finds the same. Foreign direct investment levels are increasing year on year. International trade in goods is increasing, and international trade in services is growing even more quickly – which is doubly hard to control. Alan Blinder, a prominent American economist, estimates that 30 million US jobs – in services as well as manufacturing – will be outsourced within a generation. I could go on.
Secondly, it is difficult to disentangle economic globalism from its social, cultural, and political equivalents. To take on example among many, India & China’s booming economies (the result in large part of better integration in the world economy) has stimulated another surge – India sends more students to America than any other country. China is second. They are returning home in greater numbers, equipped with the educational skills, cultural knowledge, and know-how to take advantage of, and so continue the expansion of, economic globalism. And so it continues.
What is actually happening, and been happening for at least a decade, is a realisation that pure neo-liberal policy prescriptions do not work in the way the theory would suggest. The WTO, the Bretton Woods institutions, and individual nation-states are becoming less dogmatic. The Doha round, however imperfect, is one example. DFID’s new White Paper, which explicitly accepts that markets aren’t the answer to every country’s ills, is another. The cautious Global Compact, California’s efforts to sue the Environmental Protection Agency, the Enhanced Analytics Initiatve, offer furtehr testimony. We are not seeing the collapse of globalism in the way John suggests, but a humanising of economics. After all, the underlying principles of neo-liberalism remain: that markets are essential for economic growth, that private enterprise is positive, and that cross border trade can benefit everyone, if done in the right way.
Economic globalism is here to stay. But John’s stirred up the debate. And if it helps to make our current model of globalisation more democratic, and enables more people to capture the benefits, then so much the better.