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The Virtues of Deglobalization

Walden Bello

 by Foreign Policy In Focus

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."


© 2021 Foreign Policy In Focus
Walden Bello

Walden Bello

Walden Bello is the co-founder and current senior analyst of the Bangkok-based Focus on the Global South and the International Adjunct Professor of Sociology at the State University of New York at Binghamton.  He received the Right Livelihood Award, also known as the Alternative Nobel Prize, in 2003, and was named Outstanding Public Scholar of the International Studies Association in 2008. His books include: "Counterrevolution: The Global Rise of the Far Right" (2019) and "Capitalism's Last Stand?: Deglobalization in the Age of Austerity" (2013).

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