Category Archives: Deglobalization

The neoliberal world market project has failed

May 28, 2020DeglobalizationIKPS

Debate on Deglobalization

The neoliberal world market-project has failed

25th of May, 2020

Alexandra Strickner

In the face of the corona crisis, almost every country is desperately trying to buy protective equipment, masks and medicine on the world market. Today, most of the production of these medical items is limited to a few places in Asia. Intergovernmental cooperation in production and procurement is currently in short supply – a disgraceful credential for global governance. The motto “My country first!” applies, sometimes at the expense of others. The initial lack of cooperation between EU countries has now been replaced by an EU export ban on a number of medical products. This is particularly bad for countries of the global south, which have so far imported these goods from the EU.

The Corona Pandemic shows: The neoliberal world market project has failed. It not only endangers our climate, it endangers lives of human beings. Over the last three decades and with the help of trade and investment agreements, the EU has massively pushed this project forward for the benefit of EU companies. The production of essential goods has thus increasingly shifted into the hands of a few corporations operating in “low-cost” countries. For the companies, the conditions in these countries are “favourable” because of very low wages, hardly existing labour rights and environmental regulations and tax advantages.

Two sides of the coin
For a few corporations, the world trade flows and profits have grown steadily – that is one side of the coin. The other side is marked by social cuts, the destruction of local supply structures for essential goods and the worsening of the climate crisis. In favor of a few and the expense of many, a vulnerable, unstable economy has been created.

Not so long ago, conservative and neo-liberal politicians ignored or delegitimised our criticism of the effects of radical market trade agreements. Now, during the crisis, they suddenly talk about how vital products such as protective equipment and medicines need to be produced in Europe or in their own country again. Austrian Minister of Economic Affairs Margarete Schramböck is propagating this in the same manner as German Health Minister Jens Spahn and many others. We will keep an eye on ensuring that these words are followed by action once the crisis is over.

Solidarity and cooperation
For one thing is clear: a world market where those with enough money can buy everything while the others do not have enough to live on is unethical, socially inefficient and unstable in the long term. A world market which aggravates the climate crisis through unbridled transport of goods on a daily basis and increases the power of transnational corporations, is harmful for all of us. We need a regionalised economy of short distances more than ever. The production of essential goods must be organised as locally or regionally as possible – in the sense of the macro-region Europe or Asia, for example. All service sectors covering basic essentials of life must be excluded from all trade agreements. Our everyday economy – the local supply of e.g. food, bank services etc. and the infrastructure of services of general interest (water, energy, health, education, telecommunications, refuse collection) needs to be oriented towards the common good and must be democratically organised and controlled. Trade and investment agreements must be restructured in such a way that the production of these goods and the provision of these services is possible according to these principles. World trade must then be based on complementary products and cooperation. The name of this approach is Glocalisation; a concept that Attac already presented in 2010.

There are already examples of new forms of international solidarity and cooperation: Cuba and China are now sending doctors to Italy, Nicaragua, Jamaica, Argentina and Surinam to help these countries to overcome the crisis. Cities and municipalities around the world are cooperating in areas such as climate protection measures or in receiving refugees. And many social movements, trade unions and civil society initiatives are organising themselves in international networks, for example in the fight for climate protection measures, the maintenance and expansion of public services or for a different trade policy.

New rules of the game
The EU must therefore stop all ongoing negotiations for further neoliberal trade and investment agreements. Now is the time to restructure trade relations on the basis of a new economic concept, focusing on the good life for all.

We now need different framework conditions and new multilateral rules for trade; we need investments and financial markets that ensure the production of high-quality essential goods and services for all people, climate protection and the protection of our livelihoods. We need a different kind of globalisation and a new multilateralism for a good life for all.

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Neo-liberalism and Globalization

May 24, 2020DeglobalizationIKPS

Debate on Deglobalization

Neo-liberalism and Globalization

25th of May, 2020

Heiner Flassbeck

Globalization was a wonderful idea. The premise it rested on—that all national institutional obstacles would be cleared away to create a social order in which each could contribute according to their individual abilities for the benefit of all—was hard to resist. A universal division of labour as the crowning achievement of liberalism.

But things turned out differently. Widespread dissatisfaction in the Global North, continuing poverty in the South—these demonstrate liberalism’s inability to strike a balance between freedom and equality; moreover, they reveal its inability to make adequate sense of the social and economic interrelationships of complex modern societies in their mutual interactions and to develop viable political models on that basis.

While the philosophical and political problems with liberalism are by and large understood, what is still not understood is why liberalism has failed so spectacularly on its own home territory: the shaping of economic cooperation. The vast majority of economists cling to the dogma that “the market” should take the lead in nearly all important social decisions and the state be allowed merely to define the framework and plug any gaps.

That has always been an inadequate idea of the tasks of a state. Today, however, it is simply being refuted by reality itself. It is no exaggeration to say that the decline of liberalism was inevitable from the outset, since liberalism had developed satisfactory intellectual tools neither for global cooperation between nation states, which is indispensable, nor for the consequences resulting therefrom at a national level.

People still fail to appreciate the fact that the economic theory behind liberalism is not merely inadequate in particular areas that are in need of improvement. No, this “theory”—which really ought not to be accorded the rank of theory in the first place—is by nature unsuited to comprehending the dynamics of a market economy, and thus to the task of deducing valid plans of political action.

Anyone who undertakes an historical or political analysis on the basis of the theoretical foundations of economic liberalism inevitably goes awry. Theories based in economic liberalism, particularly so-called neo-classical economics, interpret social systems, each of which is dynamic and historically unique, as a cyclical pattern of equilibrium states whose fundamental character is completely static and ahistorical.

Taking a dynamic process which essentially consists in sequential interrelations—i.e., in the succession of events that can only be comprehended in the context of their real temporal sequence—liberal economics has developed a doctrinal artifice in which supply curves and demand curves intersect in an atemporal and ahistorical plane. At its core, liberal economics is the failed attempt to explain almost all relevant economic phenomena as the solution to the problem of distributing scarce goods via a perfect market mechanism.

Economic liberalism’s conceptual deficiencies became obvious in 2008 and 2009’s major global crisis of the financial markets. But after the crisis—after a brief intermezzo of state intervention and a widespread appreciation of the fundamental failure of markets—economic liberalism returned with a vengeance. In the immediate aftermath of the crisis, sheer economic power made it clear to political decision-makers that while in an emergency the state has permission to play the saviour’s role, under no circumstances should the conclusion be drawn that the division of responsibility and power between market and state needs to be reconsidered.

Today, under the sign of the global corona shock, the crisis of the system that revealed itself in those moments has to be discussed anew, and much more resolutely. Deflationary tendencies, zero-percent interest rates, consistently high levels of unemployment, the crisis of free trade, and the inability to reinvigorate the investment dynamics of days gone by all demonstrate that there was no question of things returning to normal, even before the pandemic with its devastating effects on the global economy.

Today, the tasks that need to be dealt with on a global basis are much more comprehensive and much more complex. In particular, the ecological dimension of global cooperation needs to be brought into harmony with the economic re-building after the depredations of corona. It has to be said—and without exaggeration—that the global community today stands before the greatest challenge of human history. Translated by Marc Hiatt and Sam Langer for Gegensatz Translation Collective

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Deglobalization as a cornerstone of a new phase of organized capitalism

May 24, 2020DeglobalizationIKPS

Debate on Deglobalization

Deglobalization as a cornerstone of a new phase of organized capitalism

25th of May, 2020

Andreas Nölke

Karl Polanyi is probably the most useful classical political economist if we want to understand current global developments. His ideas about the inherent instability of liberal-universalist capitalism have informed much scholarship over the last decade. In his treatment on “Universal capitalism or regional planning?” he does not only highlight many undesirable features of US-style liberal capitalism, but also dares to offer an alternative, namely regional planning. The concept contains two core elements, on the one hand planning as an alternative to pure market mechanisms and, on the other hand, economic as well as political regionalism as an alternative to the global liberal market system. He was a bit too harsh with the United States of his time, given that the New Deal and the subsequent era of “embedded liberalism” clearly differed from the ultra-liberal global capitalism of the 1920s and later turned out to be at the origin of the “socially friendliest” phase of capitalism so far. The three decades until the 1970s were a phase of organized capitalism, with clear limits to the destructive power of global financial markets (Nölke 2012, Nölke and May 2019)

However, Polanyi´s vision is of renewed importance for the second collapse of liberal capitalism that is taking place since the bursting of the Dotcom bubble in 2001. Over the last two decades, the liberal model of capitalism that was (re-)established in the 1980s has eroded at both national and international levels. Its instability was first exposed by the 2001 crisis, then by the Global Financial Crisis and now by the coronavirus crisis. Core pillars of the liberal global order are currently under attack, from the erosion of the World Trade Organization, via anti-liberal political movements in many countries to the decoupling of global production networks. Polanyi, however, teaches us that deglobalization does not have to be a regressive development, but may lead to a better political control over capitalism, given that it reestablishes the power of the nation states.

The more controversial aspect of Polanyi’s vision is the alternative to global liberal capitalism. Polanyi proposed a controlled exchange between peaceful empires, based on his experience in the 1940s. On the surface, this looks like an interesting suggestion for the 2020s, with at least three regional empires developing around the US, the European Union and China. However, there are several problems with this proposal. First, the focus on these regional empires may look attractive to the inhabitants of the three empires but not to people outside of the latter. Second, there is little evidence of the willingness of the major powers to embark on a project of controlled exchanges between these three empires. For the US economy in particular, uncontrolled global financial flows are crucial. The Trump administration may be willing to negotiate over trade, but the latter is quite harmless if compared to financial markets with regard to their ability to destabilize economies around the world. Finally, the European Union may look like a tame and peaceful empire in political terms. In economic terms, however, it is among the most aggressive force of liberalization in the current order, both with regard to the enforcement of liberal markets internally but also with regard to liberal trade agreements externally. Moreover, the EU is also not suitable to empower democracy vis-à-vis the economy, as it rather erodes national democracy in the member states without replacing it with a working democracy on the European level.

Polanyi (again) is right in his prediction that liberal world capitalism is in retreat, that globalization will (and has to) be reduced and that many societies will try to regain control by following a more organized form of capitalism. Today, we can see many developments pointing into this direction, including the Brexit vote, the election of President Trump, the weakness of the global institutions of the liberal order and the rise of state capitalism in large emerging economies (Nölke 2017). As during the 1930s, it is an open question whether this turn towards organized capitalism will lead to a better democratic control of capitalism via the nation state and inter-governmental co-operation, or to a degeneration into Fascism and international confrontation.

Nölke, Andreas 2012: The Rise of the ‘B(R)IC Variety of Capitalism’: Towards a New Phase of Organized Capitalism? In: Henk Overbeek/Bastiaan van Apeldoorn (eds.): Neoliberalism in Crisis, Basingstoke: Palgrave Macmillan, pp. 117-137.

Nölke, Andreas 2017: Brexit – Towards a new global phase of organized capitalism? In: Competition & Change 21 (3), pp. 1-12.

Nölke, Andreas and May, Christian 2019: Liberal Versus Organised Capitalism: A Historical-Comparative Perspective. In Tamás Gerőcs/Miklós Szanyi (eds.): Market Liberalism and Economic Patriotism in the Capitalist World-System. Basingstoke: Palgrave Macmillan, pp. 21-42

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What kind of Deglobalization?

May 24, 2020DeglobalizationIKPS

Debate on Deglobalization

What kind of Deglobalization?

25th of May, 2020

Michele Cangiani

The pandemic disease has caused a global lockdown affecting both people and commodities. The consequences in terms of decreasing global GNP and trade, and increasing unemployment are going to be as dramatic as in major economic crises.

Even before the present sanitary emergence, however, global capitalism did not enjoy good health. The problem of systemic over-accumulation could not be solved by neoliberal globalization. Increasing opportunities for financial rent, bottom-top income redistribution, also through tax system reforms, “extractive capitalism”, de-localization of production and outsourcing at the global scale allowed satisfactory gains for an exiguous minority, but fueled a creeping economic depression, deceptively delayed by bubbles and debt, and finally resulting in the crisis of 2007-2008. Democracy underwent a considerable decay. The human and natural environment has been ravaged, while huge “social costs” have been shifted onto it by an economic system based on “business enterprise” (K. W. Kapp). Furthermore, the “limits of growth” have been abundantly reached.

Present, past and possible future pandemic can too be counted among “social costs”. Scientific research has found a connection between pandemic, on the one hand, and, on the other, growing land grabbing, destruction of biodiversity, agribusiness and industrial breeding (cf. e. g. Robert G. Wallace, Big Farms Make Big Flu, Monthly Review Press, 2016). The paradox is that the pandemic can result in a “shock economy” dynamics supporting present-style globalization and even aggravating its above-mentioned consequences.

President Trump is going to enhance protectionist plans well beyond the old American tradition and the recent Sino-American trade war. Moreover, customs barriers are not the sole obstacle. Both production and trade of wide areas all around the world have been ravaged, not only by economic sanctions, but also by destabilization policies, blockades and wars. As a world power risking to lose its economic supremacy, the U.S. is tempted to support it by non-market means, by its military presence and deterrence in the first place – not to mention its war-addiction. The budget for 2020 of the U.S. Department of Defense is $721.5 billion, but the total military spending will be 1.5 or 2 times greater, if expenditures falling under the competence of other Departments and administrations are included. This approximately amounts to one half of the total world military expenditure, which was 7.2 per cent higher in 2019 than it was in 2010.

This existing kind of globalization, as an expression of “universal capitalism”, including imperial rivalries, is supported by the biggest economic interests and by most governments all around the world; then, it is likely to continue to dominate the scene. The absence of a substantial recovery of international trade will rather strengthen than undermine this tendency.

As Karl Polanyi argues in his 1945 article “Universal Capitalism or Regional Planning?”, global financial interests, expropriating control on economic resources and choices from people and democratic organizations, feed social uneasiness and ethnic and civil conflicts. This helps explaining not only current armed conflicts, but also populist and souveranist movements, that, combined as they are with systematic dis-information, can better function as a support than a menace to current-style globalization.

Deglobalizing pecuniary interests and armament competition, globalizing “regional planning”, environment-conscious production and democratic cooperation among people and among nations: the question is, would this kind of de-globalization and alternative globalization be possible? This is the path shown by both Polanyi and several scholars and social movements of our times. Let us guard this seed, even if the plant is unable to develop in the foreseeable future.

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Deglobalization and the EU: In search of a new balance between markets and states

May 24, 2020DeglobalizationIKPS

Debate on Deglobalization

Deglobalization and the EU:
In search of a new balance between markets and states

25th of May, 2020

Anna Ząbkowicz, Maciej Kassner

To our knowledge, the term deglobalization was first coined by Walden Bello in the book Deglobalization. Ideas for a New World Economy (2002). The idea behind the concept is simple: global economy as we know it should be progressively dismantled and replaced with more local economic arrangements. The concept of deglobalization also takes us back to a half-forgotten essay by Karl Polanyi “Universalism or regional planning,” published in 1945 in the London Quarterly of World Affairs. Polanyi argues there that universalistic projects such as Soviet-style communism or American-style capitalism have failed and should give way to a new world order based on regional treaties, national planning, and managed trade. What we would like to propose here is a state-centered approach to the question of globalization and its possible reversal. If one practical effect of globalization is the weakening of the state, then a deglobalizing response should seek to restore the state’s capacity to regulate the economy. According to Bello, the best way to achieve this goal is to roll back economic integration and restore rigid economic controls. Alternatively, the states could cede some aspects of their formal sovereignty to a regional organization like the EU and develop the capacity to regulate the economy on a regional level. This strategy seems closer to Polanyi’s vision of regional economic planning.

Following in the footsteps of the Polish economist Władysław Szymański, we define globalization as the progressive diminishing of state power vis-à-vis transnational capital markets. With taxes and controls scaled down, they find themselves less and less autonomous in shaping their economic and social policies. The power of international financial markets, which constitutes the essence of globalization, derives from enhanced capital mobility, which although legally guaranteed by states, stems at the same time from the failure of international coordination. In Europe, many institutional changes that benefit capital at the expense of sovereign states have been introduced as part of the integration process. Nevertheless, we argue that regional integration and successful coordination offer a chance to re-empower governments.

The EU project is now facing increasing skepticism and resistance. However, further integration remains the main goal of European elites. It is hard to imagine that our current political leaders would suddenly change their minds. More importantly, even relatively poorer Europeans benefit from cheaper foreign products, holidays abroad, and other fruits of economic integration. Middle-class families tend to rely on foreign workers for care and domestic services, while the interests of the European working class are closely tied to export-oriented industries. Brexit notwithstanding, there is every reason to believe that economic integration enjoys much broader support in Europe than its opponents tend to assume.

Thus, rejecting economic integration in Europe is neither possible nor desirable. As it becomes increasingly clear, the crisis caused by the CORVID-19 pandemic actually calls for more cooperation at both global and regional level. Recovering from the economic shock will require a coordinated response similar to the Marshall Plan. Moreover, policies dealing with issues such as labor rights, climate change or tax evasion demand political action on international scale. By giving up certain attributes of formal sovereignty to the EU, its member states possibly reinforce their real sovereignty.

Two adjustments are necessary if the EU is to successfully deal with the above problems. First, the fundamental goal of the European project should be reconsidered. Instead of emancipating capital, the EU should aim to subordinate it to the needs of society. We need to rediscover the sources of European solidarity, which is rooted in the socialist heritage of the labor movement and the tradition of Christian social thought. The EU needs a common investment policy focused on a green transformation of the economy, as well as a common social policy centered around some version of universal basic income or guaranteed minimum income. Integration should be deeper, with the EU becoming a confederation of states.

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Does the Covid-19 Crisis Lead the EU Towards De-Globalization?

May 23, 2020DeglobalizationIKPS

Debate on Deglobalization

Does the Covid-19 Crisis Lead the EU
Towards De-Globalization?

25th of May, 2020

Kurt Bayer

The deep economic crisis which follows the Pandemic exhibits some signs towards deglobalization: the recognition that the most important pharmaceutical base materials are produced in China and India; the fact that Europe has hardly any producers of the necessary protective equipment left; the break-up of global supply chains for European lead companies; the threat that falling stock prices might make it easier for foreign (esp. Chinese) „predators“ to buy up European high-tech firms; the recognition by the business and research community that lock-downs require virtual meetings to be held in spite of face-to-face meetings and that this new mode actually saves a lot of time and travel inconvenience; the need to cancel long-distance tourism patterns: all these might be interpreted as the previous neo-liberal model of cost-efficiency-driven globalization and capitalism having come to an (well-deserved) end.

More directly visible signs are the temporary lifting of the EU Stability and Growth Pact provisions by the EU, in order to enable governments to support workers and businesses from the effects of the lockdowns, as well as the EC Vice President Vestager‘s exhortation to EU governments to protect some of their essential businesses from being bought out by foreign firms by allowing the states to take equity positions in these firms. Suddenly, the role of government intervention is seen as essential for restoring economic growth.

In addition to these anti-crisis developments, there are some signs that EU officials and governments have begun to listen a little more to their citizens: the most recent trade agreements (with Japan and Mexico, for instance) do no longer insist on businesses being able to sue governments, they attempt to establish „fairer“ dispute settlement procedures and show small signs of including social and environmental criteria into the agreements.

The Covid-19 crisis makes some of these changes possible and strengthens them. However, many business leaders and politicians are already dreaming of re-establishing the previous order. Financial institutions are holding back on lending, despite extensive government guarantees. Some politicians argue that the commitments of the Paris Climate Agreement must be put behind the commitments to revive traditional growth.

But the crisis shows that previously unheard-of government interventions can be unleashed, even though priority is given by most countries to businesses, instead of workers. Some countries manage this balance better than others. This momentum could be used by the Left to regain hegemony over the sustainability discourse, that this is the time to combine the aid to business after lockdown with social and environmental targets, to replace the stranded carbon assets with investments promoting better working conditions and de-carbonized structures.

At present, citizens in Europe are speechless and frightened. But as soon as life comes back to life, they will be able to make themselves heard and fight the vested interests of the previous status quo. A more inclusive, sustainable degree of globalization for the EU might emanate from this difficult fight.

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Return to a societal steered market economy – with new ecological and social development directions

May 23, 2020DeglobalizationIKPS

Debate on Deglobalization

Return to a societally steered market economy -
with new ecological and social development directions

25th of May, 2020

Dr. Rainer Land

1) Overcoming the global crises – human-made climate change, environmental and social crises, poverty, underdevelopment and inequality – requires a different kind of globalisation. Economic development would have to be geared globally to substantive goals, not to financial market gains.

There were societally steered market economies with development goals defined in terms of content: USA 1938 to 1968, Western Europe until 1968, Japan until 1989; today in China. An alternative globalization strategy must again be oriented to the model of a controlled market economy – with new and expanded goals. This does not require that the entire world community, currently comprising 193 states, agree on that but that the centres of economic development, China, the USA and the EU, must work together for mutual and shared benefit instead of fighting each other.

2) A controlled market economy is not a centrally administered economy; it presupposes goods and financial markets and independent enterprises (private and public, municipal, national and international), but steers innovation and investment in certain societally desired directions. It uses legal frameworks for this purpose and controls development using defined instruments: monetary and fiscal policy, credit management, exchange rate policy, innovation and industrial policy, science, wage policy, regional development, etc.

Guided economic development requires shared substantive goals, both nationally and globally. Ecological transformation and coping with climate change, social progress in the form of overcoming poverty, work with sufficient income, participation, health and social services, education – a better life for all. Decisions on economic development directions and the use of steering instruments must be based on these goals, which must be worked out in an open discourse, democratically decided and politically institutionalised. In a controlled market economy, framework conditions are designed in such a way that profits and returns on capital can only be achieved in accordance with such shared goals.

3) A comprehensive investment programme for a new globalisation strategy, oriented towards such goals, would be the starting point. A new, ecologically sound and societal progressive globalisation strategy requires an update of the regulatory system, an overcoming of the neo-liberal idea that economic development is determined by financial markets and shareholder value and cannot or must not be politically defined.

This requires a review of how historically successful steered market economies – the USA and Western Europe until 1973, Japan until 1989 and China today – have functioned or are functioning. Important points are: The regulation of financial markets and their subordination as serving the real economic development, controls on capital flow, regulation of exchange rates in a new international monetary system, participatory involvement of social groups (workers, environmental and consumer associations, regional actors) in long-term global investment programmes, public holdings in companies, management of ecological resources to ensure their conservation, use and reproduction, instruments of credit control, promotion of regional economic cycles and coordination with global cycles, regulation of the relationship between productivity and wage development.

4) Any economy that wants to steer economic development first needs a national steering system. This also applies to cooperative networks of economies that regulate and steer certain areas jointly, such as the euro zone, NAFTA, APEC, Brics and others. Only if the national regulatory systems work, economies are multinational or global capable of cooperation at all.

It is not a question of globalization versus de-globalization, but of other, societal desired directions of development instead of the dominant selection by financial markets.

5) To achieve this, one must not eliminate capital, but break the power of finance capital and neoliberal ideology. In doing so, one must include as allies companies and investors who can and want to make money with progressive developments.

At present, the change in the global balance of power necessary for this is not foreseeable. The USA and the EU continue to pursue a neoliberal strategy. The best that can be done today is to support the new Chinese globalization strategy, One Belt, One Road (The New Silk Road), to promote projects for the mutual and shared benefit of all and to participate in an ecologically and societally progressive orientation of this globalization strategy – instead of standing beside it as sceptical observers or trying to stop it. We need closer cooperation with China, because this is currently the only successful societally steered market economy with the experience and means to manage economic development on a global scale.

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Three theses for our debate on Deglobalization

May 23, 2020DeglobalizationIKPS

Debate on Deglobalization

Three Theses for our debate on Deglobalization

25th of May, 2020

Judith Dellheim

(1) When, in the 1980s the mainstream publicly started to use the term “globalisation”, many economists had already observed:

a faster rise of foreign investment in relation to international trade,
an increasing relative independence of rising financial markets,
an expansion of business processes remaining within the bounds of one corporation with branches in different countries,
an increasing use of modern information and communication technologies,
a new mode of general business strategy primarily relying on flexibilization,
an on-going process of simultaneous liberalisation, commercialisation and privatisation of economic processes, to the detriment of the public sphere and the state,
an increasing role of transnational corporations in the national and world economy and an intensification of global competition.

Already in the 1960s, in the face of an emerging new international division of labour, theories of globalization had been formulated. The US and the European ex-imperial powers had found new strategies to subordinate former colonies and semi-colonies, especially by imposing transfers of cheap resources and knowledge from them. The same “globalizing forces” have been active in the Cold War, in order to destabilise the Soviet bloc. In this confrontative ‘system competition’ the very boundaries of global ecological sustainability were beginning to be systematically exceeded.

(2) The reality addressed by the first thesis makes it possible to identify the agency underlying and driving these developments: The “globalizing forces” have not been ‘subjects of strategies’, but actors/agencies serving the interests of the most powerful owners of transnational corporations and the most powerful actors on the financial markets. These actors cooperate with agencies of government, of politics, of the military/”security” apparatuses, of law, as well as of accounting and consulting services, of science, culture and media, of lobbying and even of civil society. This co-operation is itself contradictory: Conflicts do arise from the fact that specific subjects of co-operation do not represent all actors involved. However, their co-operation is a condition for the on-going accumulation of highly concentrated and centralized capital. These subjects of capital rule act globally and established the need for global rules on credit, free trade, protection of investment and intellectual property rights. At the same time, they tend to avoid these very rules whenever they could work against their own interest. This need underlies the history of such institutions as the WTO and the emergence of rising global problems.

Any Green New Deal or any comparable project aiming at a just resolution of global problems and a socially and ecologically sustainable development, has to deal with these forms of co-operation, i.e. with the underlying capitalist oligarchies – especially with their contradictory linkages with “the state” and supra-state institutions. Any new competitor (as a particular capital oligarchy or a country) has to submit to the rules of the game of free trade, protection of investment, intellectual property and “security”. This increases the global problems and provokes attempts to change the game.

(3) Globalisation as a growing interdependence of the world’s economies, brought about by international trade and flows of resources, investment, labour force, knowledge and information in the interest of the globally dominating forces (i.e. the capitalist oligarchies) therefore leads to social exclusion, to social, economic and ecological destruction, and to a special type of competitive regionalisation. A closer look at the processes referred to in our first thesis makes it obvious that technological, ecological and health disasters, social and political strife, trans- and international confrontations (including wars), and so-called ‘globalisation’ in its complex reality, are largely determined by capitalist oligarchies. They do, indeed, primarily shape economic and societal development in global industrial regions, but these are also modified by concrete outcomes of societal and international struggles. E.g. China’s Belt and Road Initiative is aimed at becoming a winner within globalisation – and not at promoting deglobalisation, as a democratic alternative towards socially and ecologically sustainable development.

Peace, fighting global warming and countering the loss of biodiversity, a solidarity-based support for local producers of food and renewable energy, a democratic appropriation of common goods can be affirmed to be the main pillars of political strategies to overcome this situation – by struggling against capitalist oligarchies. Polanyi’s search for the deeper background of current problems has produced important starting points for a radical work on alternatives, bringing together radically democratic political forces with different social, ethnic, cultural, and political backgrounds – as an opportunity for a renewal of criticising globalisation in the perspective of a renewed alterglobalisation movement.

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Globalization was planned, deglobalization was not

May 23, 2020DeglobalizationIKPS

Debate on Deglobalization

Globalization was planned
Deglobalization was not

25th of May, 2020

Andreas Novy

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.

Read the other essays on Deglobalization here:

Debate on Deglobalization

The neoliberal world market-project has failed

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Neo-liberalism and Globalization

Heiner Flassbeck

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Deglobalization as a cornerstone of a new phase of organized capitalism

Andreas Nölke

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What kind of Deglobalization?

Michele Cangiani

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Deglobalization and the EU: In search of a new balance between markets and states

Anna Ząbkowicz

Maciej Kassner

Debate on Deglobalization

Does the Covid-19 Crisis Lead the EU Towards De-Globalization?

Kurt Bayer

Debate on Deglobalization

Return to a societally steered market economy - with new ecological and social development directions

Rainer Land

Debate on Deglobalization

Three Theses for our debate on Deglobalization

Judith Dellheim

Debate on Deglobalization

Globalization was planned Deglobalization was not

Andreas Novy

Deglobalization and the EU:
In search of a new balance between markets and states

Does the Covid-19 Crisis Lead the EU
Towards De-Globalization?

Return to a societally steered market economy -
with new ecological and social development directions

Globalization was planned
Deglobalization was not