Global Policy Forum

By Adam Parsons

Since the term globalization became a buzzword in the mid-1990s, our common understanding of the world has been defined by a succession of promised ‘ends'; the end of history, the end of poverty, the end of geography and the nation state. Today, in the midst of the worse financial crisis since the Great Depression, we are instead witnessing a very different end; that of neoliberalism itself, of laissez-faire capitalism, and of globalization theory as once studied. The result is an emerging new debate on the political economy as defined by the welcome question: what comes next?

The insufficient word ‘globalization', as the late sociologist Paul Hirst once said, soon turned into the shorthand for getting people to accept their lot fatalistically - knowing that employees and wage deals can always be bought cheaper somewhere else. Globalization may well involve the spread and connectedness of communication and technologies across the world, but for politicians, journalists and business leaders it is more easily understood in terms of trade flows, international investment, and the liberalization of market economies.

For its proponents this has remained a political project since the late 1970s; to exploit the larger process of international integration for a specific outcome, one based on investor rights and the profit imperative above the basic concerns of ordinary people. As notably reasoned by Noam Chomsky, no sane person - not even a so-called ‘anti-globalization' protester - is against international integration.

It was this successful political project, not ‘globalization', that infiltrated world affairs in the early 1980s through the polices of Thatcher, Reagan and Helmut Kohl. When stripped of such descriptive adjectives as ‘late twentieth century capitalist' or ‘neoliberal', globalization as a highly internationalized economy is a phenomenon that stretches back for several centuries. Globalization skeptics may disagree on trends and dates, some tracing its origins from France in the 1760s, others from the belle époque in the 1920s, but free trade and its accompanying theories about letting ‘natural' market forces rule is a repetitive feature of economic history.

As Hirst and Thompson argued in Globalization in Question (Polity Press, 1999), the developmental myth of the 1950s and 1960s - that capitalism without victims was a clear prospect - was subsumed by the contemporary and equally wrong-headed myth of a global free market without alternative; one that required international competition at any cost, or else the fate of being an abandoned ‘loser'. The academics arguing a hyperglobalist position, from this point of view, were guilty of a certain intellectual sin; robbing us of hope by overstating the extent of dominance and inevitability of the world market.

We are now living through "a veritable age of globalization studies", one in which one academic discipline after another is "gaily expanding its remit into the ‘global' sphere and relocating its own subject matter in a geographically extended, worldwide perspective". Sceptics like Justin Rosenberg, author of The Follies of Globalization Theory (Verso, 2001), are content to vigorously argue that no-one really understands what is happening at all, thus mistaking an outcome of change for the change taking place - an inversion of explanans and explanandum. Globalization theory, in this perspective, is a "collapsing temple" built on a category error from the outset.

As the world in 2009 faces unprecedented levels of hunger, poverty, environmental degradation, global inequality and financial collapse, fewer students or economists are so embroiled in such interpretations or abstract evaluations. That something fundamental has happened to human society over the past 30 years is without question; whether it is defined as a new era, a new world order, or an inexorable process is of less importance. The most urgent scholarly battleground today for globalization students and researchers is in the real-world analysis of economic development.

It is suddenly factual and no longer eccentric to maintain, like Joseph Stiglitz in Globalization and its Discontents (Allen Lane, 2002), that the central tenet of free market economics - the invisible hand of unfettered international competition - is a theoretical nonsense. Previous renegades of the economics profession are everywhere being consulted by the mainstream press, and not only Stiglitz; even city bankers are widely rejecting Ricardo and Adam Smith in favor of Marx, Schumpeter and Keynes in an attempt to understand the retreating globalised economy.

Another academic renegade that should be added to the reading list is Erik S. Reinert, author of How Rich Countries Got Rich... and Why Poor Countries Stay Poor (Constable, 2007). Like his contemporary Ha-Joon Chang, Reinert emphasizes one of the main paradoxes of the globalization debate - that countries who have not taken the recommended medicine of immediate economic integration have constantly been used as proof of the excellence of globalization.

It may not be necessary to agree with Reinert's ‘pro-economic growth' perspective and his staunch endorsement of state-supported industry to agree with his position on ending poverty. The end-of-history euphoria surrounding globalization, he writes, completely disregarded 500 years of experience in building welfare - replaced by what Reinert calls "welfare colonialism" in the form of overseas aid that increases the Western dependency of poorer countries.

The Millennium Development Goals are cited as a case in point: a "bad idea" based on "palliative economics", says Reinert, that prefers to put a large number of nations effectively ‘on the dole' rather than institute an effective form of economic development (based initially on protectionism and state activism). To summaries crudely, the real reason why global poverty persists is not simply down to a lack of political will, but moreover a lack of understanding based on bad economics. The problem of development and the distribution of resources, in other words, is far from being solved as most economic experts would have us believe.

As the political theorist David Held acknowledges (see his debate with Paul Hirst in Open Democracy, 2002), the issue is not being for or against markets, but how do we frame and regulate markets? Trickle-down theory has not delivered, and none of the goals of social justice advocates - environmental sustainability, disarmament, debt cancellation, the end of poverty and so on - can be achieved without a new global redistributive system. The principle of ‘just me' that underpins the world economic order, based on unequal competitiveness and self-interest, has exhausted its tenure as the guiding assumption of global resource distribution.

What the true skeptics of economic globalization require is a new political narrative that goes beyond mere opposition to neoliberal policies, towards an alternative that begins with bottom-up participation and cosmopolitan democracy. In the wise words of Amartya Sen: the "central issue of contention is not globalization itself, nor is it the market as an institution, but the inequity in the overall balance of institutional arrangements - which produces very unequal sharing of the benefits of globalization. The question is not just whether the poor, too, gain something from globalization, but whether they get a fair share and a fair opportunity."