PHM-Exch> The virtues of De Globalisation

[Claudio Schuftan]

From: David Legge D.Legge at latrobe.edu.au


 *The virtues of deglobalization* *Walden Bello*

>From Transnational Institute - Foreign Policy in Focus, 3 September 2009 (
http://www.tni.org/detail_page.phtml?act_id=19829)

The current global downturn, the worst since the Great Depression 70 years
ago, pounded the last nail into the coffin of globalization, argues Walden
Bello.

Español<http://www.tni.org/detail_page.phtml?&lang=sp&page=bello_virtuesofdeglob&lang_help=sp>

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."


Published by Foreign Policy In Focus (FPIF)<http://www.fpif.org/fpiftxt/6399>,
a project of the Institute for Policy Studies <http://www.ips-dc.org/> ©
2009
 ------------------------------

Walden Bello, a fellow of the Transnational Institute, is a member of the
House of Representatives of the Philippines and senior analyst at the
Bangkok-based research and advocacy institute Focus on the Global South.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://phm.phmovement.org/pipermail/phm-exchange-phmovement.org/attachments/20090920/8747720e/attachment-0001.html>