Globalist Paper

Globalization and Grassroots Democracy (Part I)

How can Latin America guarantee that globalization translates into political equality for all citizens?

Read Part II of this Globalist Paper here.

Takeaways


  • The 2008 financial crisis has brought home the state's irreplaceable role in providing strategic planning and anti-cyclical economic policies.
  • How can Latin America guarantee that democracy translates the formal trappings of political equality into economic and social advancement for all citizens?
  • We have not been able to fashion a collective blueprint for dealing with threats that impact countries, communities and individuals very unequally.
  • For most developing countries, joining the emerging global economy comes at a very steep price. They are obliged to foreswear what little public policy space they have.

A revised early 21st century version of Marx's The Communist Manifesto might very well begin with the words, "A specter is haunting the world — the specter of globalization."

After all, we live in a world enthralled by the notion that the forces unleashed by modern technology condemn us to increasingly more intertwined and interdependent lives under powerful financial, political and environmental undercurrents largely beyond our individual and collective power to control.

Globalization has been presented as an irrepressible and yet largely benign phenomenon providing ideal conditions to disseminate liberal democracy in its market economy version. Modern-day capitalism is seen to have won over competing forms of political economy to become the foremost model for marrying prosperity to a social conscience.

Enthusiasts have gone so far as to misinterpret Francis Fukuyama’s (in)famous 1989 essay on the rise and spread of modern capitalistic culture as suggesting that globalization, especially in its Anglo-Saxon variety, is an iron law of history — just as unbending as Marx's.

Globalization, thus defined as triumphant global capitalism, appears to hurry humanity inexorably along to a glorious future of unparalleled productive power and shared prosperity, under the aegis of ever more sophisticated versions of the enlightened free market.

Underpinning this belief is the commonsensical notion that globalization — better understood as the rise in mutual economic, environmental and security interdependency — acts as a powerful incentive for communities to work towards cooperative arrangements, leveling cultural differences, dissolving political disputes and overcoming economic disparities.

Yet, the greed-stoked financial meltdown of late 2008 and the ensuing global downturn have underscored what should have been obvious all along: We live in the midst of new and growing global threats, ranging from climate change, terrorism and pandemics to transnational crime and intra-state violence.

At the same time, old challenges, such as widespread poverty and the threat of all-out thermonuclear destruction, continue unabated. Despite this growing sense of a shared fate, we have not been able to fashion a collective blueprint for dealing with threats that impact countries, communities and individuals very unequally. In the long run, we all stand to suffer from these menaces.

Worse, the very forces unleashed by globalization have helped exacerbate pre-existing disparities in living conditions and expectations within and among nations, as well as helped to magnify the impact of the attendant social and economic contrasts.

The unhampered flow of beliefs, images and people can foster admiration and emulation. Just as often, the outcome is envy, distrust and frustration. This highlights the obvious difficulties in arriving at rational undertakings to ensure that mutual dependency is a force for self-interested solidarity — rather than a pretext for some to become "free riders" or to seek to extract unilateral gains by exploiting positions of relative advantage.

From a developing-country perspective, the dilemma posed by interdependence is especially severe. The specter of climate change provides possibly the most dramatic example of how the costs of mutual reliance are unevenly distributed.

A long history of greenhouse gas emissions in the industrialized North means that many coastal or island states in the global South will bear the brunt of climate change, for which they are particularly ill-prepared.

At the same time, emerging economies are being pressured to reduce their aspirations to rapid growth in the name of the collective environment. For most developing countries, joining the emerging global economy comes at a very steep price. Relatively small and uncompetitive economies are obliged to foreswear what little public policy space they have so as to find for themselves a niche in a highly competitive environment where size and scale are paramount.

It means considerable loss of sovereign control and regulation over much of national life, as the logic of mass integrated markets tacking to uniform rules imposes itself. Government downsizing as a result of the general enthusiasm for radical free-market nostrums in the 1980s and 1990s compounded this loss of sovereign decision-making capacity.

At the same time, pushing in the opposite direction, a call has risen for a reversal of policies that have helped aggravate social gulfs and political tensions. This trend has gained force in the wake of the present worldwide recession, which is especially painful for developing countries with limited means to protect themselves from the downside of globalizing.

The 2008 financial crisis has brought home the state's irreplaceable role in providing strategic planning, anti-cyclical economic policies and basic public services in the face of major economic turmoil and social dislocation. For developing countries, this is all the more true.

The emerging economies that foreswore neo-liberal fundamentalism are riding out the present economic downturn relatively unscathed. This further underscores the importance of strong public oversight — and of a healthy reticence towards unbridled market exuberance.

Nowhere have these countervailing forces been in play more strongly than in Latin America. Nowhere was the Washington Consensus more thoroughly tested — and more harshly condemned. Nowhere has the reaction to free-market dogma been stronger, in the form of an outpouring of grassroots democracy, oftentimes expressed in radical economic nationalism and anti-globalization rhetoric.

This struggle suggests that Latin America, more than any other region, faces a double dilemma at the dawn of the 21st century.

How can it guarantee that democracy translates the formal trappings of political equality into economic and social advancement for all citizens? And simultaneously, how can it avoid both the populist temptation to weaken democratic institutions under the pretext of breaking all resistance to spreading prosperity through government activism?

Editor’s Note: Read Part II of this Globalist Paper here.

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