Transcript The Collapse of Global Neoliberalism and the Emergence

New Regionalism in a Multi-Polar
World
Core readings: Schmidt, Johannes Dragsbaek (2007) Social Compacts in Regional and Global
Perspective, Canadian Journal of Development Studies, vol. 28, number 3-49
Deacon, Bob (2001) The Social Dimension of Regionalism. A Constructive Alternative to Neo-Liberal
Globalization
http://gaspp.stakes.fi/NR/rdonlyres/02A8960F-764F-4E8C-9477-B0CECCFC3478/0/gaspp82001.pdf
Guerrero, Dorothy (2001) Regionalisms and Alternative Regionalisms in Asia and the Pacific Basin,
Project Discussion Paper No. 5/2001, University of Duisburg, (Institute for East Asian Studies/East Asian
Politics)
http://www.wun.ac.uk/cks/teaching/horizons/documents/robertson/Guerrero.pdf
Secondary
readings: Dieter, Heribert and Richard Higgott (2002) Exploring alternative theories of economic
regionalism: From trade to finance in Asian co-operation, Centre for the Study of Globalisation and
Regionalisation, University of Warwick,
http://www2.warwick.ac.uk/fac/soc/csgr/research/workingpapers/2002/wp8902.pdf
Söderbaum, Fredrik and Timothy M. Shaw (2003) Theories of New Regionalism, A Palgrave Macmillan
Reader, Chapter 1 and 2
Agenda - New Regionalism in a
Multi-Polar World
 Intro
 End of Neoliberal Globalization
 Core problems of Global Change
 A Cacophony of Crises
 Potential Outcomes of the Crises
 Alternative (New) Regionalism vs Neoliberal
Globalization
 The Nationalism option
 Other Alternatives
The main argument is that we have reached the end
of globalization and will probably move into a
period of renewed nationalism and protectionism.
It seems that energy depletion and climate change
are important factors converging with a global
economic meltdown, exacerbating it and creating
the grim post-neoliberal collapse of the world
economy.
There are specific and uncovered strengths for
mobilizing an alternative in the informal sector.
Finally these discussions are put into the greater
picture concerning the current debate about
rights, democracy and civil society based
organizations in Asia and Europe under the
cacophony of crises.
1 The End of Globalization
 Point of departure: Neoliberal globalization has reached its
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end-point! Why?
1 - Never delivered what was promised
2 – compromised as ideology and strategic policy device
3 – lost legitimacy – its main pillars – the Brettonwoods
inst. have failed (not even one economy can be used as
success example)
4- deregulation and privatization have led to
informalization of grand-scale economies and labor
markets
5 - Even adherents of utopian “free-markets” seem to fear
that it has reached its end-point
6-Social crisis of inequality, poverty and increasing NorthSouth gap
Furthermore the unequal distribution of health-damaging experiences “is not in
any sense a ‘natural’ phenomenon but is the result of a toxic combination of poor
social policies and programmes, unfair economic arrangements, and bad
politics”
“…. unequal distribution is not in any sense a ‘natural’ phenomenon but is the
result of policies that prize the interests of some over those of others – all too
often of a rich and powerful minority over the interests of a disempowered
majority”
“….. social injustice is killing people on a grand scale”
A cacophony of crises
 Five simultanous crises – embedded in a systemic
conjuncture of failure
 A nexus between climate change, food and
primary commodity crisis and the depletion of oil
(speculative price hikes lead to environmental
disaster) – has cast the EOI model into jeopardy
 Financial crisis has reached the real economy –
created recession/depression in the US economy –
spreading to Europe and parts of Asia
 It appears that 1929 is repeating itself with a world
economy sliding towards recession or even a new
Great Depression
 The deep systemic causes of the social and environmental dramas
unfolding around us are related to the growth of endless consumption,
increasing levels of inequality, and the unwise institutional pathology
which to a very large degree has been induced by US administrations.
The neoliberal imperative has depleted the natural life support system of
the planet, disrupted hydrology and climate systems, and is indeed
threatening human survival
 Climate change which before was interpreted as a transnational ethical
problem has become a major political issue and might increasingly be
identified as a security issue
 This is especially the case when it is linked to the systemic failure of the
current mode of production – no matter the type of political and
institutional layer in which the market economy is embedded in. There
are also horizontal links and close connections between the failures of
capitalism and the depletion of oil
 Scarcity of water and oil is already a security issue which has led to wars
The contagion effects of the crisis of capitalism
represents nothing less than what Paul Baran and
Paul Sweezy aptly described as a "gigantic system
of speculating, swindling, and cheating." It has
reached the global level and pose tremendous
challenges to people’s organizations, solidarity
movements and those who fight for increasing
social, political and ecological rights of ordinary
people. The dominant response on both left and
right is the call for more regulation and
government intervention. But this answer “fails to
shed light on the convergence of interests of
business and political elites as well as the ongoing
class war that has eviscerated the ranks of
unionized labor, stagnated wages, and casualized
workers across all sectors of the economy”
 In principle this crisis could be resolved by a major
systemic shake-up, involving (for example) new
economic doctrines and new forms of
international relations.
 But this time it is more unlikely because of two
reasons:
 First, non-renewable natural and human resources
are being exhausted and no form of capitalism can
resolve that
 Second based on historical experience the decline
of US hegemony – a declining superpower armed
to the teeth - is unlikely to give up power
voluntarily – combined with shift in world
economic gravity to the East! A new situation
Potential outcomes of the crises
 Outcomes:
 Regionalism!
 Positive or negative Nationalism!
Alternative Regionalism vs Neoliberal Globalization
 We live in a complex and multi-hegemonic world where the emerging regional social compacts
can be seen as one of the most important responses to the crisis of neoliberal globalization
 This is in essence what some authors refer to as multilayered global governance and it is in this
context that a comparative analysis of regional systems of social redistribution, regulation and
empowerment becomes relevant as a new form of resistance. Regional governance is becoming
a more entrenched feature of the global political economy, whilst inter-regional diplomacy,
through which regional associations seek to build global alliances and preferential agreements,
is a potential countervailing influence to the power of the United States, in dominating global
agendas and setting global priorities
 The political ambition of establishing regional coherence and regional identity is of primary
importance.
 Distinguish between three kinds of region building initiatives:
 1) integration through trade liberalisation; regional governance;
 2) and regionalism as citizenship or political identity.
 3) Along these variants of regionalism enter questions of redistribution, democracy,
accountability, participation, transparency, security, labor market regulation, and social policy.
This has brought with it a new set of social and political actors but also highlights the fact that
regionalism in many cases is based on the idea of regional identities and the catalytic
challenges posed by external challenge
In this respect, regional social compacts ought to be understood as constructed
endeavours of resistance by social actors in response to the looming crisis of
contemporary international capitalism. In this sense, the regional dimensions
of structural change have been something of an inconvenience for the less
reflexive globalizers who have used the hegemonic discourse of globalisation to
dispense with any meaningful notion of a national state
To claim that there are oppositional regional resistances and in some cases like the
power structured WTO alliances to this may seem challenging. However it
might be the only route out of the crisis of a dysfunctional global governance
system and at the same time the only “rational choice” of policy makers,
politicians, and other socieral actors.
Thus I claim that it is possible to identify four regional social compacts all based
on different institutional structures and cultural orientations - from
government monetary, fiscal and industrial policies to labor legislation, work
ethic, trust and even the creation of new identities. Regionalism itself
constitutes an element of an increasingly complex system of governance
operating at a variety of levels in which questions about public goods, welfare,
economic organisation and political participation are addressed
 1)
The Anglo-Saxon political and economic liberalist compact
which still is the dominant global model claims that coping with
globalization - maximizing gains and minimizing risks - requires
flexible domestic economic structures so that economic agents can
adapt speedily and effectively to external pressures. Small rule-bound
government upholding property and contract, within which framework
private actors interact freely on the basis of a decentralized world pricemechanism, best serves national flexibility. Here the deregulated labor
market is prevalent. This model is furthermore characterized by weak
labor unions and lack of bargaining power.
 2)
The so-called Flexicurity model rests on negotiated social
contracts between labor, employers and the state - social corporatism is
a way to cushion and spread the costs of adjustment to global
liberalisation. Extensive social security systems. Trust, long-term
cooperation, and acceptance of collective objectives are based on the
social, industrial and political citizenship rights. Together, these
constitute a highly developed welfare state securing a high floor of
provision for each citizen, as well as institutionalized rights of
individuals and organized groups to participation and voice in the
polity and at the workplace , making exit less necessary for expressing
discontent. The model rests on politically negotiated social compacts
in a bargained economy.
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3) The East and Southeast Asian Model, including
China and Japan, has been characterized by a
corporatist arrangement without labor, and a
substantial state involvement in economic affairs.
This compact relies on a specific type of highly
cohesive and disciplined civil society, structured by
strong developmentalist institutions and
orientations, which is easy to mobilize for collective
action and protects society from the dysfunctions of
possessive individualism, excessive competition, and
noncooperative, particularistic rationality. By putting
‘politics in command’ the developmental state in East
Asia played an important role in the capitalist growth
process. The developmental state restrains market
rationality in order to pursue a policy of
industrialization and growth per se. China plays a
major role as catalyst and fascilitator in the creation
of an East Asian alternative to US hegemony.
4) There are other important attempts to redress existing or new
defensive regional social compacts There are interesting similarities
as well as important differences between the SARDC, African Union
and MERCOSUR and ALBA regions. The most important being that
Southern Africa has spend numerous efforts and energy on
reconciliation and the creation of stability and security in the
aftermath of apartheid and wars. The experience of resistance has
been heroic regardless of the conditionalities of the IFIs in the
region. Venezuela plays an important role together with Brazil in
Latin America but it remains to be seen whether it is a viable counterhegemonic project!
The Latin American and African models today are characterized by a
massive restructuring of capital-labor relations. The contraction of
domestic markets, the dismantling of “uncompetitive” national
industry, the growth of the informal economy, revised labor codes
directed at making labor flexible and austerity programs have
resulted in the informalization of the work force, mass under- and
unemployment, a compression of real wages, and a transfer of
income from labor to capital, but as mentioned new types of proactive regionalisms are emerging
 The Nationalism option
 The vacuum the disappearence of aggressive
neoliberalism creates will be filled by a massive return
of nationalism. Whether it is positive or negative
nationalism remains to be seen. There are clear signs
today of an aggressive rivalry between the two as both
gain strength
This is indeed the case in corporate driven EU where the central
problem is its undemocratic nature which partly translates
into more and more EU scepticism on the part of the European
populations. We are witnessing a swing back to national
agendas taking precedence over regional problem-solving;
furthermore the general lack of democratic transparency – the
socalled democratic deficit - in the commission and the
European Council and the lack of real democracy has together
with the stalemate surrounding the constitution turned the
vulnerable segments of the populations against the EU.
 Another reason why democracy and human rights are in
jeopardy in Europe is the migrant issue and the campaign
against terror which has created a draconian climate of fear,
extra-judicial detention and expulsion of socalled illegal
immigrants leading to serious violation of human rights
and a virtual and physical surveillance system of Orwellian
scope. Combined anti-terror laws and European foreign
policy support for the wars in Palestine, Iraq, Afghanistan
and the hostility towards real democratization, secularism
and human rights in the region show the hypocrisy
involved and create the real paradox – more fear and more
terror – thus paving the way for an authoritarian solution to
the present financial crisis!
 Increasing protectionism and nationalism in Europe and
the US
 Rise of xenophobia – also on the Left
 China bashing – India bashing (to a lesser degree)
 Anti-immigrant measures in the name of War on terror
 Democracy in distress in Europe
 Capitalim does not need democracy
 This point is also illustrated in the contemporary world by
the attractiveness of China and Vietnam to foreign capital –
these countries are the real darlings of private capital and
in this equation, democracy and human rights are regarded
as obstacles to high-speed economic profit.
 In the context of the mood against economic and
political refugees, xenophobia fuels rightwing
“identity politics” in Europe
 progressive civil society organizations in Europe
are facing rightwing social movements who appeal
to widespread anxieties, prejudices, and
resentments, in order to exploit them for political
gain
 The inherent contradiction between capitalism
and democracy is likewise visible in Europe where
negative nationalism in the form of new levels of
islamaphobia against first and foremost
immigrants and refugees with a Muslim
background
 We see the introduction of measures limiting civic rights in
European and other Western societies. This solution
potentially prepares the ground for a proto-type of fascism
which can be used against progressives and labor
movements in case the economic crisis becomes politically
uncontrollable
 In fact the question we may ask in Europe (and the
US) today is whether the political and economic elites
are looking to China for a model to solve the inherent
contradictions between individual human rights in the
political sense and economic efficiency and profit!
Alternatives - New Regionalism in a Multi-Polar
World
 Difficult to find a way of transgressing the capital–
labor nexus, which is the fundament for the
accumulation process, can be said to be the
precondition for the most radical break with history
 The current and emerging alternatives that are
emerging can indeed be seen as examples of a break
with the very holy grail of capitalism namely private
property
 What is at stake for anti-systemic forces is first and
foremost to acknowledge that it is not the removal of
market failure or governing the market that is
important. In the last instance, such an approach relegitimizes capitalism as a socio-economic system
based on class differentiation and competition,
thereby representing more of an alternance than an
alternative to real existing capitalism
In the contemporary international system, two types of actors are seeking a
return to a multipolar international order.
One is China, whose dramatic ascendancy poses the most serious
challenge to the post-Cold War balance of power.
Another country seeking multipolarity is France, which asserted its
independence from the US by refusing to endorse the Bush administration’s
plans to invade Iraq.
Both see American hegemony as a grave threat to world order, challenging
the possibility of both peace and justice.
But China is a rising power, while France by itself is not.
China’s desire for multipolarity is hence motivated to a greater degree by its
perception of American dominance as a threat to its own regional power
ambitions. And while China’s is largely a national quest for multipolarity
France’s is framed within a “Euro-nationalism”- calls the EU to become an
actor in the world stage to counterbalance the United States.”
 1930’s
 1970’s
Seven Great Powers
Global Great Depression
Democracies deeply fearful of war and
fail to maintain balance of power
No consensus on international system
and No moral-intellectual consensus
International law and League weak ‘
Universal pursuit of ‘national interests
Germany, Italy and Japan reckless
No monolithic Berlin-Rome-Tokyo Axis,
but great threat to democracies, USSR
and China
Military developments not major barrier
to war
Two Superpowers, three Great Powers
Western, Communist, Third World
economic ills
Democracies refuse to “think about the
unthinkable”
No consensus on international system
and No moral-intellectual
consensus
International law and U.N. weak
Universal pursuit of national interests
Russia and China both cautious
No monolithic Communist bloc,
indeed deep and bitter MoscowPeking rift
Nuclear weapons major deterrent to
total war, but may not maintain
balance of power
2010
 G2 – An emerging multi-polar world system (BRIC)
 Global crisis – similarities to Great Depression
 No consensus on international system
 No moral-intellectual consensus
 Weak and illegitimate global governance system
 Multiple crisis in energy, climate, food, finance and
real economy
 Increasing pursuit of national interests
 Unclear security situation