Shifts in the nature of globalization

I'll quote John Gray, reviewing three different books in the New York Review of Books, at length here because I think this is a crucial part of understanding where we are today. Note first the myth Gray cites of peaceful economic interdependence prompted by Norman Angell's work. Reading through the Hersh article linked below, you see this between the lines in the present administration, for example. Democratization of other countries is not the goal, but rather economic liberalization. This is absolutely integral to an understanding of the failures of Iraq and the looming failures of Iran, as well as to what only seems like hypocrisy when dealing on friendly terms with other "rogue states" or oppressive regimes. The latter form of hypocrisy is only hypocrisy if one assumes what is actually the incorrect starting point - that democratization is a real goal, even if Bush administration rhetoric appears to really believe it. The hypocrisy evaporates when one begins to see the extent to which American interests are identified as economic interests and thus the liberalization of other economies (especially, of course, those sitting on huge pools of oil).

Second, there is the obvious environmental line that Gray picks up in this review. It's a little over-evident to me, so I won't mess with it further. I'm doing some non-blog writing on it anyway right now, so I'm sure some will pop up on the blog. But suffice it to say at least that economies do not expand into mysterious infinite voids; they expand into ecosystems. Think of what that means for "growth."

...As [Barry] Lynn notes, the failure to confront the risks of global production is partly owing to the anachronistic revival of classical liberal ideologies in which it is believed that free trade promotes peace. In his celebrated book The Great Illusion, Norman Angell argued that growing economic interdependence made war unprofitable and improbable—a view that had been advanced in the nineteenth century by enthusiasts for free trade such as Richard Cobden. Angell's tract was published in 1909 and its argument was overturned five years later by the outbreak of the most destructive war in history. But the belief persists that as the economies of different nations become more integrated with one another their political systems will become more democratic, with the result that the world becomes more peaceful.

In practice, increasing global economic integration often works the other way. Lynn observes that because of the strong economic links between the two countries, a democratic upheaval in China would be highly destabilizing for the American economy. If ports in China were shut down or production plants closed—whether by the Chinese government or as a result of popular dissent—the flow of goods to the American economy would be severely disrupted. In such circumstances the US could well find itself propping up the current regime in Beijing: "If anything, to protect our supply lines, we may find ourselves cooperating with Beijing hard-liners to suppress the will of the Chinese people."

The long supply lines of the global production chain extend into many countries ruled by authoritarian regimes. Any serious threat to these regimes will have global repercussions, and it will not be easy for democratic states to side with dissident movements. Free trade requires stability more than democracy, and this is especially true when production is globally dispersed. At the same time, stability is not ensured in the current state of international affairs. As in the past, states have divergent strategic objectives; they prize their own security highly and will seek to thwart global market forces if they seem to threaten what are seen as vital national interests. It is only reasonable to expect that these differences will sometimes lead to conflict.

Insofar as it is a prescription for policy, End of the Line is a plea for a reassertion of American national interests. Unlike many analysts in America and other countries, Lynn—a senior fellow in the New America Foundation—recognizes that the present global economic regime is not a spontaneous growth. It is largely an artifact of American power, which was constructed in the belief that it would serve American interests. But the system that has been established does not always work to America's advantage, nor is it self-stabilizing:

The global economy was created by the American state. Absent a clear-minded effort by the United States to manage this system—in ways amenable to the large majority of the peoples around the world who now depend on it—it will slowly fall to pieces.

Lynn's proposals for policy change are wide-ranging, but their common feature is that they represent a clear shift from the naive faith in the benign effects of global market forces that has shaped American policy since the end of the cold war. Here his analysis is symptomatic of an ongoing shift in opinion. The steadily deteriorating prospect in Iraq and the negative impact of outsourcing are undermining public faith that globalization works overall in the American interest. In conjunction with the spiraling cost of the war, this change in mood could well shift US policies in a more inward-looking direction. Having led the world to globalization, the US may not be far from taking the lead in retreating from it.

Models of economic development that anticipate societies converging in a harmonious universal system have deep roots in Western thinking. It is not surprising that they should have been revived in theories of globalization in the aftermath of the cold war; but they reflect the conditions of the nineteenth century, when the environmental limits of industrial expansion were hardly suspected. They fail to take account of the fact that industrialization on a global scale intensifies scarcity in vital natural resources while triggering a powerful ecological backlash. These developments, which form the other side of globalization, will shape its future course.