http://www.commondreams.org/view/2009/09/04-4
Published on Friday, September 4, 2009 by Foreign Policy in Focus (FPIF)
The Virtues of Deglobalization
by Walden Bello
The current global downturn, the worst since the Great Depression 70
years ago, pounded the last nail into the coffin of globalization.
Already beleaguered by evidence that showed global poverty and
inequality increasing, even as most poor countries experienced little
or no economic growth, globalization has been terminally discredited
in the last two years. As the much-heralded process of financial and
trade interdependence went into reverse, it became the transmission
belt not of prosperity but of economic crisis and collapse.
End of an Era
In their responses to the current economic crisis, governments paid
lip service to global coordination but propelled separate stimulus
programs meant to rev up national markets. In so doing, governments
quietly shelved export-oriented growth, long the driver of many
economies, though paid the usual nostrums to advancing trade
liberalization as a means of countering the global downturn by
completing the Doha Round of trade negotiations under the World Trade
Organization. There is increasing acknowledgment that there will be
no returning to a world centrally dependent on free-spending American
consumers, since many are bankrupt and nobody has taken their place.
Moreover, whether agreed on internationally or unilaterally set up by
national governments, a whole raft of restrictions will almost
certainly be imposed on finance capital, the untrammeled mobility of
which has been the cutting edge of the current crisis.
Intellectual discourse, however, hasn't yet shown many signs of this
break with orthodoxy. Neoliberalism, with its emphasis on free trade,
the primacy of private enterprise, and a minimalist role for the
state, continues to be the default language among policymakers.
Establishment critics of market fundamentalism, including Joseph
Stiglitz and Paul Krugman, have become entangled in endless debates
over how large stimulus programs should be, and whether or not the
state should retain an interventionist presence or, once stabilized,
return the companies and banks to the private sector. Moreover some,
such as Stiglitz, continue to believe in what they perceive to be the
economic benefits of globalization while bemoaning its social costs.
But trends are fast outpacing both ideologues and critics of
neoliberal globalization, and developments thought impossible a few
years ago are gaining steam. "The integration of the world economy is
in retreat on almost every front," writes the Economist. While the
magazine says that corporations continue to believe in the efficiency
of global supply chains, "like any chain, these are only as strong as
their weakest link. A danger point will come if firms decide that
this way of organizing production has had its day."
"Deglobalization," a term that the Economist attributes to me, is a
development that the magazine, the world's prime avatar of free
market ideology, views as negative. I believe, however, that
deglobalization is an opportunity. Indeed, my colleagues and I at
Focus on the Global South first forwarded deglobalization as a
comprehensive paradigm to replace neoliberal globalization almost a
decade ago, when the stresses, strains, and contradictions brought
about by the latter had become painfully evident. Elaborated as an
alternative mainly for developing countries, the deglobalization
paradigm is not without relevance to the central capitalist economies.
11 Pillars of the Alternative
There are 11 key prongs of the deglobalization paradigm:
1. Production for the domestic market must again become
the center of gravity of the economy rather than production for
export markets.
2. The principle of subsidiarity should be enshrined in
economic life by encouraging production of goods at the level of the
community and at the national level if this can be done at reasonable
cost in order to preserve community.
3. Trade policy - that is, quotas and tariffs - should
be used to protect the local economy from destruction by
corporate-subsidized commodities with artificially low prices.
4. Industrial policy - including subsidies, tariffs, and
trade - should be used to revitalize and strengthen the manufacturing
sector.
5. Long-postponed measures of equitable income
redistribution and land redistribution (including urban land reform)
can create a vibrant internal market that would serve as the anchor
of the economy and produce local financial resources for investment.
6. Deemphasizing growth, emphasizing upgrading the
quality of life, and maximizing equity will reduce environmental
disequilibrium.
7. The development and diffusion of environmentally
congenial technology in both agriculture and industry should be
encouraged.
8. Strategic economic decisions cannot be left to the
market or to technocrats. Instead, the scope of democratic
decision-making in the economy should be expanded so that all vital
questions - such as which industries to develop or phase out, what
proportion of the government budget to devote to agriculture, etc. -
become subject to democratic discussion and choice.
9. Civil society must constantly monitor and supervise
the private sector and the state, a process that should be
institutionalized.
10. The property complex should be transformed into a
"mixed economy" that includes community cooperatives, private
enterprises, and state enterprises, and excludes transnational
corporations.
11. Centralized global institutions like the IMF and the
World Bank should be replaced with regional institutions built not on
free trade and capital mobility but on principles of cooperation
that, to use the words of Hugo Chavez in describing the Bolivarian
Alternative for the Americas (ALBA), "transcend the logic of
capitalism."
From the Cult of Efficiency to Effective Economics
The aim of the deglobalization paradigm is to move beyond the
economics of narrow efficiency, in which the key criterion is the
reduction of unit cost, never mind the social and ecological
destabilization this process brings about. It is to move beyond a
system of economic calculation that, in the words of John Maynard
Keynes, made "the whole conduct of life...into a paradox of an
accountant's nightmare." An effective economics, rather, strengthens
social solidarity by subordinating the operations of the market to
the values of equity, justice, and community by enlarging the sphere
of democratic decision making. To use the language of the great
Hungarian thinker Karl Polanyi in his book The Great Transformation,
deglobalization is about "re-embedding" the economy in society,
instead of having society driven by the economy.
The deglobalization paradigm also asserts that a "one size fits all"
model like neoliberalism or centralized bureaucratic socialism is
dysfunctional and destabilizing. Instead, diversity should be
expected and encouraged, as it is in nature. Shared principles of
alternative economics do exist, and they have already substantially
emerged in the struggle against and critical reflection over the
failure of centralized socialism and capitalism. However, how these
principles - the most important of which have been sketched out above
- are concretely articulated will depend on the values, rhythms, and
strategic choices of each society.
Deglobalization's Pedigree
Though it may sound radical, deglobalization isn't really new. Its
pedigree includes the writings of the towering British economist
Keynes who, at the height of the Depression, bluntly stated: "We do
not wish...to be at the mercy of world forces working out, or trying
to work out, some uniform equilibrium, according to the principles of
laissez faire capitalism."
Indeed, he continued, over "an increasingly wide range of industrial
products, and perhaps agricultural products also, I become doubtful
whether the economic cost of self-sufficiency is great enough to
outweigh the other advantages of gradually bringing the producer and
the consumer within the ambit of the same national, economic and
financial organization. Experience accumulates to prove that most
modern mass-production processes can be performed in most countries
and climates with almost equal efficiency."
And with words that have a very contemporary ring, Keynes concluded,
"I sympathize...with those who would minimize rather than with those
who would maximize economic entanglement between nations. Ideas,
knowledge, art, hospitality, travel - these are the things which
should of their nature be international. But let goods be homespun
whenever it is reasonably and conveniently possible; and, above all,
let finance be primarily national."
© 2009 Foreign Policy in Focus
Walden Bello, a Foreign Policy In Focus columnist, is professor of
sociology at the University of the Philippines and senior analyst at
the Bangkok-based research and advocacy institute Focus on the Global
South. He is the author of, among other books, Dilemmas of
Domination: The Unmaking of the American Empire (New York: Henry
Holt, 2005).
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