Debate on Deglobalization
Globalization was planned
Deglobalization was not
25th of May, 2020
In The Great Transformation (TGT), Polanyi analyzed the long-term transformation from an agrarian to an industrial society that was ideologically underpinned by the liberal creed, a deliberate strategy of economic liberalism to introduce the logic of One Big Market. This was the first wave of globalization as world-wide marketization. Laissez faire as well as the creation of a world market were planned. But its objective was illusory from the beginning, leading to diverse countermovements of protection and planning – including tariffs and restrictions on migration. After 1929, the inherent contradictions of this first wave of globalization, centered on the Gold Standard, caused the collapse of liberal capitalism and cosmopolitan civilization. This led to political revolutions in the 1930s which Polanyi denominated “great transformation”, signifying the unexpected, somehow unplanned implementation of a new socio-economic and spatial order. This specific, deglobalizing spatiality of the great transformation is crucial, but often overlooked. Socialism has been internationalist until Stalin embarked on his road to “socialism in one country” in the 1930s. Democratic reformism, especially the US New Deal, focused on national economic recovery too. In the periphery, especially in Latin America, forced delinking from global markets from 1929 to the end of the great war, and in part the Corean War (1953), strengthened import substitution policies, the internal market and industrialization. Post-war Fordism of mass production for mass consumption was inward-oriented.
The second wave of globalization started in the 1970s with the demise of Bretton Woods and fixed exchange rates, followed by the Big Bang of financial deregulation in the 1980s. In the 1990s, “hyperglobalization” (Rodrik) was institutionalized by the World Trade Organization (WTO) and other trade and investment agreements. This universalized “deep integration”, that means global rule setting which cannot be changed by national and democratic politics: capitalist rules of property, contract and consumer sovereignty dominate over democracy and popular sovereignty. As Quinn Slobodian described in “The Globalists”, this was the implementation of neoliberal plans that have been elaborated in rudimentary forms already in the 1920s in Geneva, partially executed by the League of Nations in austerity programs, eg. in Austria. Countermovements, once again, popped up rather spontaneously. First, from the Left, in Seattle in 1999, protesting against WTO. The hope that “another world is possible” did not materialize. In the West, not even the Great Financial Crisis in 2008 led to a systematic, “planned” shift away from hyperglobalization. While China started a project of strengthening internal markets as well as building a proper global infrastructure (Belt and Road Initiative), the West under the guidance of Obama and Merkel repeated the “conservative twenties” (Polanyi) with a vain attempt to stabilize liberal capitalism and cosmopolitan civilization. First right-wing populism, then Orbán, Trump and Bolsonaro challenged the liberal mainstream. Today, a new reactionary politics promotes nationalism and criticizes globalization, combining the persecution of the Left with a strong rejection of Enlightenment values, from human rights to scientific reasoning. Ugly forms of deglobalization emerge: from white supremacy to open military threats and the cancellation of international cooperation and universal human rights. This might signify a new lasting transformation of politics, culture and the economy, again accompanied with a spatial shift away from globalization. The Corona crisis accelerated deglobalization by chaos. The Left, once again, is a latecomer, divided in futile disputes between cosmopolites and communitarians, unable to acknowledge the necessity of selective economic deglobalization (esp. in finance, transport and rent-based activities, like patenting and digital platforms) as a prerequisite for a proper territorialized space of manouevre, including national sovereignty, but also enlarged urban and regional policy space. Today, Polanyi would be a fierce critic of globalization and he would most probably have searched for innovative forms of planetary coexistence of diverse regionalized mixed economies. Enlarging and democratizing policy space from below (eg. via remunicipalization and the strengthening of the foundational economy) is a precondition for new forms of international cooperation that are urgently needed to deal with burning issues of planetary importance: climate change, disaster relief (eg. currently the Corona crisis) and global peace keeping. Deglobalization must not be left to reactionary politics, it has to be planned as a progressive regionalizing project, bottom linked, from below as well as from above. In a nutshell: deglobalization by design.
Head of the Institute for Multi-Level Governance and Development at the Department of Socioeconomics at WU Vienna
President of IKPS
Read the other essays on Deglobalization here: