Those of us interested in trying to understand the deep political divide that has emerged in the U.S., the UK and other capitalist democracies trace the gulf to citizens’ starkly contrasting experiences of globalization.
The prescient and prolific Harvard political economist Dani Rodrik suggests we’ve entered an era of hyperglobalization, in which globalization has become an end in itself that drives policy choices and constraints rather than serving as a means to prosperity.
Rodrik argues that negotiation of international trade agreements has been captured by lobbyists, with gains accruing narrowly to powerful transnational businesses such as financial institutions and pharmaceutical companies.
As a consequence, he points out, we are witnessing an “insurrection against business and political elites” by workers bypassed by the gains of globalization.
In his work, Rodrik considers two ways of reining in hyperglobalization: intensified global economic governance or greater reliance on domestic economic control.
Rodrik makes the case for the latter. His argument rests on two premises: any effort to derive global standards would encroach on and deny the norms and preferences of varying societies; and inclusion, transparency and accountability of policy making do not operate effectively at a global level. The excesses of globalization are very real, and must be balanced by greater national autonomy if we are to avoid still deepener societal fissures and to begin healing the enormous societal divide between those thriving in a globalized world and those who are struggling.
But there’s a problem. The argument for enhanced national autonomy implicitly assumes that democratic accountability functions well at a national level. Is this true? Is this so in the contemporary U.S.? Is it true in a UK mired in a divisive and debilitating process of exiting the European Union?
Can we assume that the policies pursued by the U.S. government are any more the “will” of the American people than international trade or other agreements reached between negotiators in closed processes?
British exit from the European Union was indeed the result of a popular referendum. But the ill-advised referendum itself was a result of political maneuvering by governing elites who sought to avoid the costs of political leadership. (Put differently, it makes a great deal of democratic sense to hold a referendum on whether to build a new water treatment plant across town. Does it make equal sense to hand over to the public a decision on something with such far-reaching, multifarious and irreversible consequences for the national welfare as membership in the European Union? No. Doing so was, therefore, a gross abdication of political leadership.)
Is domestic policy making any more accountable and any less subject to control by powerful and wealthy elites than the international agreements about which Rodrik so insightfully voices skepticism? Did the American people demand steel and aluminum tariffs? Have we asked the administration to gut the Consumer Financial Protection Bureau?
Did the public clamor for the U.S. federal government to abandon the Obama-era Clean Power Plan and to withdraw from a Paris Climate Agreement based on voluntary national contributions? Did advocates of ordinary taxpayers have more than marginal input into the recent tax bill?
More directly to the point, do ANY of these policies serve the interests of those who have been left out of the gains from globalization? Or, in contrast, are these policies simply political tools to reward and retain rich and powerful political supporters, while simultaneously mobilizing a political “base”?
Sadly, we cannot – at least at present — rely on domestic democratic accountability to ensure the “sane” globalization Rodrik justifiably calls for. Rodrik is an astute student of economic incentives. At present, political incentives encourage exploitation and exacerbation of societal divisions. These divisions carve a path to political power.
No doubt, the dynamics of globalization deepen the economic and social divide. But our political leadership is dedicated to exploiting this divide, not to healing it.
Without democratic renewal, domestic politics will remain part of the problem.