Posts Tagged ‘globalism’
“There’s class warfare all right, but it’s my class, the rich class, that’s making war, and we’re winning”*…
Trevor Jackson on Martin Wolf‘s new book, The Crisis in Democratic Capitalism, and a fundamental question it raises: if globalization has allowed elites to remove themselves from democratic accountability and regulation, is there any path toward a just economy?…
Something has gone terribly wrong. In his 2004 book Why Globalization Works, the economics journalist Martin Wolf wrote that “liberal democracy is the only political and economic system capable of generating sustained prosperity and political stability.” He was articulating the elite consensus of the time, a belief that liberal democratic capitalism was not only a coherent form of social organization but in fact the best one, as demonstrated by the West’s victory in the cold war. He went on to argue that critics who “complain that markets encourage immorality and have socially immoral consequences, not least gross inequality,” were “largely mistaken,” and he concluded that a market economy was the only means for “giving individual human beings the opportunity to seek what they desire in life.”
Wolf wrote those words midway through a four-decade global expansion of markets. Throughout the 1980s in Britain, the United States, and France, governments led by Margaret Thatcher, Ronald Reagan, and François Mitterrand set about privatizing public assets and services, cutting welfare state provisions, and deregulating markets. At the same time, a set of ten policies known as the “Washington Consensus” (because they were shared by the International Monetary Fund, the World Bank, and the US Treasury) brought privatization, liberalization, and globalization to Latin America following a series of sovereign debt crises. In the 1990s a similar set of policies, then known as “shock therapy,” suddenly converted the formerly Communist economies of Eastern Europe and the Soviet Union to free markets. Around the Global South, and especially in the rapidly industrializing countries of East Asia after the 1997 financial crisis, “structural adjustment” policies that were conditions for IMF bailouts again brought liberalization, privatization, and fiscal discipline. The same policies were enforced on the European periphery after 2009, in Portugal, Ireland, Italy, Greece, and Spain, again, either as conditions for bailouts or through EU fiscal restrictions and restrictive European Central Bank policy. Today there are far more markets in far more aspects of human life than ever before.
But the sustained prosperity and political stability that these policies were meant to create have proved elusive. The global economy since the 1980s has been riven by repeated financial crises. Latin America endured a “lost decade” of economic growth. The 1990s in Russia were worse than the Great Depression had been in Germany and the United States. The austerity and high-interest-rate policies after the 1997 East Asia crisis restored financial stability but at the cost of domestic recessions, and contributed to political instability and the repudiation of incumbent parties in Indonesia, the Philippines, and South Korea, as they did again across Europe after 2009–2010. Global economic growth rates in the era of globalization have been about half what they were in the less globalized postwar decades. Around the world, violent racist demagogues keep winning elections, and although they all seem very happy with the idea of private property, they are openly hostile to the rule of law, political liberalism, individual freedom, and other ostensible preconditions and cultural accompaniments to market economies. Both democracy and globalization seem to be in retreat in practice as well as in ideological popularity. Or, as Wolf writes in his new book, The Crisis of Democratic Capitalism:
Our economy has destabilized our politics and vice versa. We are no longer able to combine the operations of the market economy with stable liberal democracy. A big part of the reason for this is that the economy is not delivering the security and widely shared prosperity expected by large parts of our societies. One symptom of this disappointment is a widespread loss of confidence in elites.
What happened?
Martin Wolf is probably the most influential economics commentator in the English-speaking world. He has been chief editorial writer for the Financial Times since 1987 and their lead economics analyst since 1996. Before that he trained in economics at Oxford and worked at the World Bank starting in 1971, including three years as senior economist and a year spent working on the first World Development Report in 1978. This is his fifth book since moving to the Financial Times. The blurbs and acknowledgments are stuffed with central bankers, financiers, Nobel laureates, and celebrity academics. The bibliography contains ninety-six references to the author himself.
Wolf’s diagnosis is impossible to dispute: “Neither politics nor the economy will function without a substantial degree of honesty, trustworthiness, self-restraint, truthfulness, and loyalty to shared political, legal, and other institutions.” But, he observes, those values have run into crisis all over the world, and, especially since about 2008,
…people feel even more than before that the country is not being governed for them, but for a narrow segment of well-connected insiders who reap most of the gains and, when things go wrong, are not just shielded from loss but impose massive costs on everybody else…
He describes in detail the mistaken policies of austerity in the US and Europe, the rise of a wasteful and extractive financial sector, the atomization and immiseration of formerly unionized workers, the pervasiveness of tax avoidance and evasion, and the general accumulation of decades of elite failure…
Read on for Wolf’s proposed remedies and Jacksons critiques: “Never Too Much,” from @nybooks.com.
And for an interview with Jackson that elaborates on his thoughts and their historical context, see here.
* Warren Buffett
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As we assess systems, we might send provocative birthday grretings to Founding Father Thomas Paine; he was born on this date in 1736 (O.S.; on February 9, 1737 per N.S., which accrued in Britain and its colonies in 1752). He is best known for Common Sense and The American Crisis, two influential pamphlets that helped to inspire colonial era American patriots in 1776 to declare independence from Great Britain.
But relevantly to the article above, in 1797 (after witnessing the birth and early years of the U.S. and spending time in France) he wrote Agrarian Justice, in which he proposed remedies for several of the (then nascent) ills discussed by Wolf and Jackson…
In response to the private sale of royal (or common) lands, Paine proposed a detailed plan to tax land owners [the “capitalists” of their day] once per generation to pay for the needs of those who have no land. Some consider this a precursor to the modern idea of citizen’s dividend or basic income. The money would be raised by taxing all direct inheritances at 10%, and “indirect” inheritances, those not going to close relations, at a somewhat higher rate. He estimated that to raise around £5,700,000 per year.
Around two-thirds of the fund would be spent on pension payments of £10 per year to every person over the age of 50, which Paine had taken as his average adult life expectancy.
Most of the remainder would be used to make fixed payments of £15 to every man and woman on reaching the age of 21, then the age of legal majority.
The small remainder of the money raised that was still unused would be used for paying pensions to “the lame and blind.”
For context, the average weekly wage of an agricultural labourer was around 9 shillings, which would mean an annual income of about £23 for an able-bodied man working throughout the year.
Paine’s proposal presaged the social safety net of later eras and governments, proposing seven entitlements to protect the poorest citizens from the ravages of market capitalism:
- Grants to subsidize schooling of 4 pounds per annum
- One-time payments to adults on reaching maturity
- One-time payments to newly married couples and new parents
- Eliminate taxes on working poor
- Back-to-work schemes
- Pensions for seniors
- Burial benefits to surviving spouses
and also provided a scheme of how to pay for them.
– source
“The bond of our common humanity is stronger than the divisiveness of our fears and prejudices”*…
Inanna Hamati-Ataya on the importance of understanding our place in the world…
In the 1990s, an entire generation was robbed of its historical consciousness by a powerful and seemingly unprecedented tale. This story, crafted as the Cold War came to an end, declared that real or imagined boundaries had stopped working as they once had. Humans were no longer contained within their old geographies or identities. They now inhabited a new world that appeared to be unhinged from the normal evolution of human society.
The concept chosen to capture this transformational moment in human history was ‘globalisation’. It described how new technologies and networks of connectivity had suddenly brought human communities closer together and made them permeable to an uncontrollable flow of people, ideas, goods and cultural practices, which all moved freely across the integrated markets of the world economy. In the wake of this transformation, new jargon emerged, expressing new anxieties: the world had truly become the ‘global village’ that Marshall McLuhan anticipated in the 1960s, but it was a world shaped by multinational corporations and ‘elite globalisers’, who spoke a common, hegemonic ‘global English’, and were spearheading a destructive ‘homogenisation’ (or ‘McDonaldisation’) of human cultures that national borders were too fragile to withstand.
During the past three decades, more people have begun viewing our ‘global’ world as a cursed fate. With its suffocating time-space compression, globalisation seems to have uncoupled us from the logic and flow of history. Our suspicious, bastard identities – patched together from a mishmash of cultures – appear incompatible with our ancestors’ ‘authentic’ traditions and ways of life. We have become strangers to the places they called home, to the ways they dressed, ate or communicated with one another. And, with no template for how to live and no experience to learn from, the deafening siren songs of anti-globalisation movements are now luring us back into the safer identities and boundaries of a lost, golden past.
This tale of globalisation is the most successful scare story of our times. And like all scare stories, it stimulates our fear of an overwhelming unknown.
But it’s all an illusion. There is no new global world.
Our present appears that way only because we have forgotten our common past. Globalisation didn’t begin in the 1990s, or even in the past millennia. Remembering this older shared history is a path to a different tale, which begins much, much earlier – long before the arrival of international supply chains, ocean-going sailing ships, and continent-spanning silk roads. The tale of globalisation is written across human history. So why do we keep getting the story so wrong?…
[She unpacks the answer to her questions, then turns to it implications…]
… In our own contemporary era, anti-globalisation movements have recently shifted from the far Left to the far Right of national and global politics. Justified resentment against the locally experienced injustices of the global economy and the growing disruptive effect of global climate change are now couched in resentment for the social and cultural dimensions of globalisation. Identitarianism, a political ideology that stresses the preservation of narrowly conceived ‘Western’ ethnicities and cultures, has accordingly become the easiest and most efficient strategy to mobilise local grievances, and direct them at whatever is perceived as a threat to the wellbeing of those suffering within. The ugly age of nationalism is back.
Is nationalist identitarianism the ethos we will now deploy to confront the common existential threats that await us in the coming century? Why wouldn’t it be? Does anyone doubt that national borders will be turned, once again, into sacred physical boundaries and fiercely defended against those fleeing the environmental, economic or military devastation of their homes? Do we doubt that eloquent voices animated by the most (ig)noble intentions will rise to justify patriotic bullets being aimed at ‘alien migrants’ and climate refugees? And that leaders will say these displaced people cannot be accommodated because of their numbers and cultures, and the threat they pose to our secure lives – to our ‘identity’?
Such scenarios are far too likely given the rise of xenophobic worldviews, such as the conspiratorial idea of a ‘Great Replacement’, in which elites – imagined to be Jews and other minorities – have begun executing a plan to replace so-called indigenous white Europeans with other populations of apparently greater and threatening reproductive vitality. These racialist worldviews dangerously converge with a public misunderstanding of ‘race’ as reflected in the recent craze for DNA ‘ancestry tests’. DNA has little to do with ‘identity’, as social and political ideologies have constructed it, and much to do with physical and social geography. Our genes are a result of human adaptive mobility, and the journeys, rich encounters and kin-making that our freedom of movement made possible over tens of thousands of years. Our genome does not tell our whole story, but the story it does tell shows how past globalisations made us what we are today.
As we search for ways of communing with one another beyond the stubborn ideology of difference, we should also prepare for vicious future distortions and manipulations of our current scientific and historical understanding of identity. Some humans today carry a few genes that their Pleistocene ancestors inherited from intercourse with our Eurasian Neanderthalian and Denisovan cousins, whom some communities of Homo sapiens encountered on their journeys of cosmopolitan expansion. How might such a genetic difference among us be interpreted and used in the future by those intent on pursuing identitarianism to its silliest or most murderous conclusions? Might they declare that some humans are not ‘pure’ enough to enjoy the full freedom, security and dignity we recognise as the natural rights of humankind? Or might they, on the contrary, elevate the Neanderthalian or Denisovan gene as a marker of Eurasian ‘distinction’ to recreate narratives of racial superiority, similar to those that once plagued archaeological thinking about the allegedly more ‘advanced’ nature of those human fossils laying the farthest away from the species’ original African homes?
Palaeontologists who insist on ascribing the label ‘humans’ to the entire Homo genus while reserving that of ‘modern humans’ to the surviving representatives of the lineage (ie, us) probably understand better than most the dangers of ideological manipulations of scientific taxonomies. But in the open marketplace where ideas freely flow in the name of freedom of thought and expression, how can we protect ourselves and one another from such dangers, if we still perceive plurality as a threat to survival, and cannot see the richness of our shared human culture?
The wars we wage against one another are all civil wars. Until we recognise them as such, they will remain tragedies we accept as natural – or horrors we cheer on in the name of grand notions sold to us by loud voices who know our fears too well (and know too little of the richness of our world and our history). We have always been global, and this is our shared identity. It is our unique way of being and remaining in the world as one family. Whatever we cherish in our humanity and culture has been crafted by our global journeys and encounters. Through them, we will continue to write the story of how we become us…
All of our religions, stories, languages, and norms were muddled and mixed through mobility and exchange throughout history: “There are no pure cultures,” from @berytia.bsky.social in @aeon.co.
Still, as Venkatesh Rao reminds us, the “vacuous over-large abstractions like “globalization” make us underestimate the horizontal historicity of the world.”
* Jimmy Carter
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As we go with the flow, we might recall that it was on this date in 1690 (or so musicologists believe) that Johann Christoph Denner, inspired by a reeded recorder-like instrument called the chalumeau, designed and created a longer and keyed (so more widely-ranged) instrument that was quickly copied and modified by other makers– and became what we know as the clarinet. By 1791, Mozart was composing for the instrument; by Beethoven’s time, the clarinet was a staple member in the orchestra.
To the point of the essay above, it’s worth noting that the chalumeau– and thus the clarinet– were direct descendants of ancient Greek and ancient Egyptian reeded pipes… that may themselves have been modeled on similar instruments from Central and East Asia.
The clarinet, as depicted in Diderot’s Encyclopedia, 1776 (source)
“The international situation is desperate, as usual”*…
… so desperate, an increasing number of pundits argue, that globalization– the “flat world” proclaimed by Tom Friedman– that was to totem of the turn of the century, is no longer possible. But as the estimable Martin Wolf argues, we shouldn’t be too hasty– nor too sweeping and blunt– in our judgements. Trade in goods may be slowing, but the potential for technology-enabled trade in services remains huge…
What is the future of globalisation? This is among the biggest questions of our time. In June, I argued that, contrary to increasingly widespread opinion, “Globalisation is not dead. It may not even be dying. But it is changing.” Among the most important ways in which it is changing is via the growth of services provided at a distance.
…
A crucial point is that the expansion of trade in such services has depended little on trade agreements. The regulation of service activities focuses on final services, not intermediate ones. There exist, for example, strict rules on selling accounting services in the US. Yet there are few rules on the qualifications of the workers that do the paperwork behind the provision of such services.
Thus, a “US accountant can employ pretty much anybody to tally up a client’s travel expenses and collate them with expense receipts”. Examples of occupations that provide intermediate as opposed to final services include book-keepers, forensic accountants, screeners of CVs, administrative assistants, online help staff, graphic designers, copy-editors, personal assistants, X-ray readers, IT security consultants, IT help staff, software engineers, lawyers who check contracts, financial analysts who write reports. The list goes on. As Baldwin argues in The Globotics Upheaval, the potential for this sort of technology-enabled trade is huge. It will also be highly disruptive: the white-collar workers who provide these services in high-income countries are an important part of the middle class. But it will be hard to protect them.
In all, the evidence suggests that natural economic forces have largely been responsible for past changes in the pattern of world trade. Growing concern over the security of supply chains will no doubt add to these changes, though whether the result will be “reshoring” or “friendshoring” is doubtful. More likely is a complex pattern of diversification. Meanwhile, technology is opening up new areas of growth in services…
“Globalisation is not dying, it’s changing,” from @martinwolf_ in @FT.
* Tom Robbins, Even Cowgirls Get The Blues
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As we contemplate commerce, we might send muckraking birthday greetings to Upton Sinclair; he was born on this date in 1878. A writer, activist, and politician, he is probably best remembered for his classic novel, The Jungle, which exposed labor and sanitary conditions in the U.S. meatpacking industry, causing a public uproar that contributed in part to the passage a few months later of the 1906 Pure Food and Drug Act and the Meat Inspection Act.
Many of his novels can be read as historical works. Writing during the Progressive Era, Sinclair describes the world of the industrialized United States from both the working man’s and the industrialist’s points of view. Novels such as King Coal (1917, covering John D. Rockefeller and the 1914 Ludlow Massacre in the coal fields of Colorado), Oil! (1927, the Teapot Dome Scandal), and The Flivver King (1937, Henry Ford– his “wage reform” and his company’s Sociological Department, to his decline into antisemitism) describe the working conditions of the coal, oil, and auto industries at the time.
Sinclair ran unsuccessfully for Congress as a nominee from the Socialist Party. Then he ran, as a Democrat, for Governor of California during the Great Depression, under the banner of the End Poverty in California campaign, but was defeated in the 1934 election.
He was awarded he Pulitzer Prize for Fiction in 1943 for Dragon’s Teeth, which portrayed the Nazi takeover of Germany during the 1930s.
It is difficult to get a man to understand something, when his salary depends upon his not understanding it.
Upton Sinclair, ruminating on his gubernatorial loss
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