Is neo-liberal globalisation running out of road?
I was inspired recently by an article in the Washington Post, which asked “what’s behind the revolt against global integration?” Partly because the policy prescriptions for getting globalisation back on a more acceptable track, and partly because its author was Larry Summers, adviser to Presidents Clinton & Obama, and one of the heroes of ‘third way’ social democracy in Europe. It was swiftly followed by the answers of Democratic Presidential hopefuls Hillary Clinton and Bernie Sanders to a questionnaire from the Pennsylvania Fair Trade Coalition which were along the same lines, and which I have quoted at some length on Touchstone.
Summers’ article is an indication that some people have, eventually, ‘got’ that people are against globalisation (or the neo-liberal version of it) because it has hurt them, and that makes them angry. That emotional response is not, of course, the answer to the problem. But recognising that this is the popular mood is surely the first step to coming up with answers that do address the problem.
Summers’ article analyses the popular mood – especially expressed on both Democrat and Republican sides of this year’s primary season – thus:
“The core of the revolt against global integration, though, is not ignorance. It is a sense — unfortunately not wholly unwarranted — that it is a project being carried out by elites for elites, with little consideration for the interests of ordinary people. They see the globalization agenda as being set by large companies that successfully play one country against another. They read the revelations in the Panama Papers and conclude that globalization offers a fortunate few opportunities to avoid taxes and regulations that are not available to everyone else. And they see the kind of disintegration that accompanies global integration as local communities suffer when major employers lose out to foreign competitors.”
That in itself would be news to the ears of many policy commentators and political leaders on both sides of the Atlantic (well, perhaps more here than in the USA, where the popular plebiscite that is the primary season has laid these wounds bare.) But what is even more positive is the prescription that Professor Summers lays out for fixing globalisation:
“Much more promising is this idea: The promotion of global integration can become a bottom-up rather than a top-down project. The emphasis can shift from promoting integration to managing its consequences. This would mean a shift from international trade agreements to international harmonization agreements, whereby issues such as labor rights and environmental protection would be central, while issues related to empowering foreign producers would be secondary. It would also mean devoting as much political capital to the trillions of dollars that escape taxation or evade regulation through cross-border capital flows as we now devote to trade agreements. And it would mean an emphasis on the challenges of middle-class parents everywhere who doubt, but still hope desperately, that their kids can have better lives than they did.”
As I say, part of my enthusiasm for Summers’ comments is that he is expressing views I could agree with, and it’s always nice to have your prejudices confirmed, even if it’s more common in reading the New York Times than WAPO. But that’s the second and more important point. This is not ‘the conscience of a liberal’ (to steal the self-description of Paul Krugman’s NYT column, with which I find it easy to agree) – it is the view of a noted neo-liberal. Not someone on the right in global terms, but the sort of political figure we have lost in the last two or three decades, and who we need to win back if we are going to re-make social democracy and the ‘free world’ in a more progressive direction.