Globalisation doesn’t have to be neoliberal. Our challenge is still to alter it

There are more people now who are aware that we are facing the deep, joint and linked crises of the environment and inequality. Both have already reached very unsustainable levels never seen before.

The coal industry-sponsored COP24 climate negotiations closed another annual summit in December without a substantial achievement corresponding to the climate crisis. The stern warning of civilisational collapse and extinction of much of the natural world from Sir David Attenborough and 15 year-old Swedish climate activist Greta Thunberg’s shaming of climate negotiators for not doing enough and stealing children’s future trended online and were widely reported in various media. However, their very sensible words did not send extractive industry firm executives to alter their business plans and announce either immediate or long-term transition.

This year’s Fat Cat Friday news shows the appalling figure that top executives are earning 133 times more than the average worker, at a rate of around £1,020 per hour or £3.9m annually. That’s an increase of 11% compared to last year. The rising inequality in the UK can no longer be rationalised. It is also unacceptable that in this rich country, more than a fifth of the population now live below the poverty line and that there are increasing numbers of people who are using food banks. 

No one will disagree that these linked crises must be addressed as soon as possible. The environmental crisis, for one, will hit much earlier than we want. However, the understanding of how we all ended up in these double crises differs. At the same time, there is widespread sentiment that people are tired of the old politics that never delivered and there is that desperation to believe in something new and a new vision that makes sense. The big challenge is: the far right has been effective in the political theft of the left’s core critique and everywhere far-right populism is becoming the new normal.

Are we entering the period of Deglobalisation?

All of this shows that questions about global political economy and security have still not been answered in a sustainable way. Many are wondering whether the trend of shifting back to bilateral economic partnerships, Brexit and the more protectionist stance adopted by an increasing number of states mean that we are now in a period of ’deglobalisation‘. It seems that globalisation is under attack these days from all quarters and that the world is now going the opposite way. Paradoxically, Trump seems to be single-handedly doing, from a far-right US nationalist perspective, what social and economic justice groups have long fought for from a left internationalist perspective.

Far right populism is exploiting the massive sentiment of people that 'the establishment' is ignoring them and forgetting that they exist, that the political and economic elite is governing for themselves. Their proposals espouse a defensive stance for state management of the economy without changing the system for wealth creation and the priorities that created inequalities. Worse, the perceived means to solve problems is to keep the borders sealed to migrants.

Globalisation depends on, and at the same time produces, a complex system of regulating cross-border flows, and on the embedding of domestic rules in an international order. Some regulations are changing, but the pendulum is definitely not swinging against globalisation. As we have seen in the last couple of decades, globalisation, which still needs to be altered towards a more redistributive and just character, will be resilient, whether we like it or not.

All political economy has for some decades already taken place on a global stage. It will be very difficult, if not impossible, to achieve a full-scale retreat from a world in which so much economic activity is now shaped by the complex linkages formed by global value and production chains.  But – and a very big and important but – globalisation does not have to be neoliberal globalisation. It is possible to conceive of and create a different mode of globalisation, especially if our starting point is to have more democracy.

New power rivalries do not mean new power relations

The rise of China to superpower status occupies and concerns many people. Understanding what goes on in the process of the expansion of Chinese capital and in the heightening economic rivalry between old powers and new powers is crucial in understanding today’s global political economy. The rise of new powers does not mean there is now new leadership by the global south, far from it. The BRICS grouping (Brazil, Russia, India, China and South Africa), which should actually be CRIBS if we base it on political and economic impacts, is not as cohesive now as when it started. With all the current leaders not offering a different political economy, but rather supporting the status quo and benefitting from it, there can be no substantial changes.

The BRICS countries are also emulating the global north in how they are producing wealth, which is through unproductive investments or 'rentier capital'. In chapter seven of their 2017 report, UNCTAD economists conclude that there has been “the emergence of a new form of rentier capitalism as a result of some recent trends:

  • highly pronounced increases in market concentration and the consequent market power of large global corporations;
  • the inadequacy and waning reach of the regulatory powers of nation States, and the growing influence of corporate lobbying to defend unproductive rents.

As we start the year, we see the joint crises heightening and we are also entering a world we haven’t been in before. Government policies still need to matter so if and when the chaos of Brexit settles we need to ensure that there will be policies for welfare transfer, to address climate change, regulate corporations and for people to have the government they deserve. More importantly, to make a dent on the joint crises of the environment and inequality we need to support the radical alternatives here and everywhere else to ensure that positive change will indeed happen.


Image: World Economics Forum/ Flickr

 

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