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Put Globalization to Work for Democracies (and not the other way around)

By Dani Rodrik We need to rescue globalization not just from populists, but also from its cheerleaders. Globalization evangelists have done great damage to their cause not just by underplaying the real fears and concerns on which the Trumps of this world thrive, but by overlooking the benefits of a more moderate form of globalization. We must reassess the balance between national autonomy and economic globalization. Simply put, we have pushed economic globalization too far — toward an impractical version that we might call “hyperglobalization.” The transition to hyperglobalization is associated with two events in particular: the Organization for Economic Cooperation and Development’s decision in 1989 to remove all restrictions on cross-border financial flows, and the establishment in 1995, after almost a decade of negotiations, of the World Trade Organization, with wide-ranging implications for domestic health and safety rules, subsidies and industrial policies. The new model of globalization stood priorities on their head, effectively putting democracy to work for the global economy, instead of the other way around. The elimination of barriers to trade and finance became an end in itself, rather than a means toward more fundamental economic and social goals. Societies were asked to subject domestic economies to the whims of global financial markets; sign investment treaties that created special rights for foreign companies; and reduce corporate and top income taxes to attract footloose corporations.

International Institutions Today: An Imperial Global State in the Making, by B. S. Chimni

"The article argues that a growing network of international institutions — economic, social, and political — constitute a nascent global state, whose current task is to realize the interests of an emerging transnational capitalist class in the international system to the disadvantage of subaltern classes in the third and first worlds. The evolving global state formation can therefore be described as having an imperial character. Underpinning the emerging imperial global state is a web of sub-national authorities and spaces that represent, along with non-governmental organizations, its decentralized face. These developments, it is contended, seriously undermine substantive democracy at both inter-state and intra-state levels. Eight possible objections to the thesis that a nascent global state having an imperial character has evolved are next considered and rejected. The concluding section briefly explores the question as to whether international institutions can be reformed, the vision that should inform change, and some concrete proposals in this regard. It argues the case for a complex internationalism in which statist reforms are necessary in the short and medium terms. These reforms can only be brought about by a powerful global social movement."

Neoliberalism is a species of fascism

by Manuela Cadelli, President of the Magistrates’ Union of Belgium, via Defend Democracy "The time for rhetorical reservations is over. Things have to be called by their name to make it possible for a co-ordinated democratic reaction to be initiated, above all in the public services. Liberalism was a doctrine derived from the philosophy of Enlightenment, at once political and economic, which aimed at imposing on the state the necessary distance for ensuring respect for liberties and the coming of democratic emancipation. It was the motor for the arrival, and the continuing progress, of Western democracies. Neoliberalism is a form of economism in our day that strikes at every moment at every sector of our community. It is a form of extremism. Fascism may be defined as the subordination of every part of the State to a totalitarian and nihilistic ideology. I argue that neoliberalism is a species of fascism because the economy has brought under subjection not only the government of democratic countries but also every aspect of our thought. The state is now at the disposal of the economy and of finance, which treat it as a subordinate and lord over it to an extent that puts the common good in jeopardy. The austerity that is demanded by the financial milieu has become a supreme value, replacing politics. Saving money precludes pursuing any other public objective. It is reaching the point where claims are being made that the principle of budgetary orthodoxy should be included in state constitutions. A mockery is being made of the notion of public service."

The neoliberal (counter-) revolution

G Duménil, D Lévy There is a dramatic contrast between the last twenty years of the 20th century and the previous decades since World War II. It is common to describe the last twenty years of capitalism as “neoliberalism”. Indeed, during the transition between the 1970s and 1980s, the functioning of capitalism was deeply transformed, both within countries of the center and in the periphery. The earlier capitalist configuration is often referred to as the “Keynesian compromise.” Without simplifying too much, those years could be characterized, in the center countries—United States (and Canada), Europe, and Japan—by large growth rates, sustained technological change, an increase in purchasing power and the development of a welfare system (concerning, in particular, health and retirement) and low unemployment rates. The situation deteriorated during the 1970s, as the world economy, in the wake of the decline of the profit rate, entered a “structural crisis.” Its main aspects were diminished growth rates, a wave of unemployment, and cumulative inflation. This is when the new social order, neoliberalism, emerged, first within the countries of the center—beginning with the United Kingdom and the United States—and then gradually exported to the periphery. We explore below the nature of neoliberalism and its balance sheet after nearly a quarter of a century. Neoliberalism is often described as the ideology of the market and private interests as opposed to state intervention. Although it is true that neoliberalism conveys an ideology and a propaganda of its own, it is fundamentally a new social order in which the power and income of the upper fractions of ruling classes—the wealthiest persons—was reestablished in the wake of a set back. Although the conditions which accounted for the structural crisis were gradually superseded, most of the world economy remained plagued by slow growth and unemployment, and inequality increased tremendously. This was the cost of a successful restoration of the income and wealth of the wealthiest