Globalism’s  Rise and Fall

The Chinese say “when it rains, it pours”. As the Great Recession, eurozone crisis, stalled trade deals, increased conflict between Russia and the West, electoral revolts against European political elites, and finally Brexit followed the 2008 global financial meltdown. Experiencing all these, it seemed clear that globalization was running out of steam. Yet few expected that the likes of Donald Trump, one of the opponents of globalization would claim the top prize, the White House.

It was indeed surprising that world powers scrambled to react to Donald Trump’s paradigm-shifting election as President of the United States. Japan’s Prime Minister Shinzo Abe, after repeatedly expressed concern about a potential Donald Trump presidency and pointedly met only with Hillary Clinton before the election, before rushing to New York for face time with the president-elect.

European leaders have been more ambivalent, with German Chancellor Angela Merkel even putting conditions on working with Donald Trump. And the Russians have seemed downright gleeful. In a congratulatory note, Russian President Vladimir Putin wrote that Trump’s victory could bring a constructive dialogue between Russia and the United States on the principles of equality, mutual respect and real consideration. Reuters reported on last Friday that President Vladimir Putin, who spoke positively of Donald Trump before his election win, said that only Moscow had believed in his victory however. “Trump understood the mood of the people and kept going until the end, when nobody believed in him except me” Putin said with a smile.

The feelings of perhaps the most consequential power, China, remain  somewhat unclear. During the campaign, China was a primary target of Donald Trump’s dissatisfaction with trade. Yet Donald Trump’s likely jettisoning of the Trans-Pacific Partnership (TPP) trade agreement would immediately benefit China. And for obvious reasons, his anti-interventionist foreign policy outlook suits the Chinese.

Eric X. Li, a venture capitalist and political scientist in Shanghai argued that in the new era ushered in by Donald Trump’s electoral victory, the Chinese have the most to gain or to lose. He noted that as the world’s second-largest economy and its largest trading nation, China’s response could mean the difference between prosperity and stagnation, and even war and peace, around the world.

Globalization started as an innocent enough concept in the 1970s. The world was becoming increasingly connected through trade, investment, travel, and information. But after the Cold War, it was injected with an ideological component: globalism. And now one can hardly distinguish between the two.

Globalism is rooted in the neo-liberal doctrine of the Washington Consensus, which was initiated by the first post–Cold War United States President, Bill Clinton, and carried out by the successive administrations of George W. Bush and Barack Obama. Pierre Rosavallon, Professor of Political History at the College de France stated that it envisioned a world moving inextricably toward the adoption of a unified set of rules and standards in economics, politics, and international relations. National borders would gradually lose relevance and even disappear. Cultural distinctions would give way to universal values. Electoral democracy and market capitalism would spread the world over. Eventually, all countries would be governed in more or less the same way.

According to Pierre Rosavallon, the process would be backed by the United States’ hard and soft power. Indeed, it was partially according to this logic that neo-liberalism’s offspring, the neo-conservatives and liberal interventionists, took America to war in Afghanistan and Iraq. And therein lies the problem; globalism was a Trojan Horse. It devoured globalization, turning it into a force that seemed unstoppable until it collapsed under the weight of its own hubris.

Douglas Irwin, Professor of Economics at Dartmouth College argued that, in the West, the leading disciples of globalism became its greatest beneficiaries. Wealth and power concentrated at the top, among the owners and those handing out  capital, who favored free trade, multiculturalism, multilateral institutions, and even regime change and nation building in foreign lands. But their vision harmed the vast majority that constituted the middle class. Douglas Irwin further noted that just one generation after winning the Cold War, the United States saw its industrial base hollow out, its infrastructure fall into disrepair, its education system deteriorate, and its social contract rip apart.

Beyond the economic damage, changes in social values propagated by globalism threatened social cohesion. The political scientist Robert Putnam captured the process best in his important book, “Bowling Alone”, in which he described in painful detail the collapse of American communities. In the name of globalization, in other words, American elites had been building an empire at the expense of a nation.

The same thing happened in Europe. As Douglas Irwin noted, technocrats in Brussels, along with their allies in national capitals, pushed an ever-expanding set of standards onto an ever-expanding European Union, relegating to the back-burner the interests of the people in its member states. In some European countries, youth unemployment reached and stayed at 50 percent. Now the globalist elites have been overthrown at the very same ballot box that used to sustain their rule.

Donald Trump’s victory was not an accident. It was the culmination of structural changes within American society that elites had ignored for too long. These forces will continue to push the United States and the world down a different path than the one they’ve been on for 25 years now. The death of globalism does not mean the end of globalization as the idea was originally understood. On the contrary, interconnectedness will probably continue to increase, driven by secular trends in technology and economics. Effective global governance is needed more than ever. But it can no longer be based on the narrative of globalism.

According to Pierre Rosavallon, the world needs a new order grounded not in twentieth-century ideological fault lines and the idea that history would soon reach its end, but in respect for diversity among nations, state sovereignty, and cultural integrity. Instead of trying to run the world according to a singular set of global standards, nations can cooperate freely in ways that are suited to their particular circumstances.

Only strong sovereign states can effectively cooperate with each other and, when appropriate, willingly moderate their sovereignties for the benefit of world order. With so much doomsday thinking in which so many dire predictions about what’s going to happen to America and the world, a dose of optimism is needed. Globalism has committed suicide. A new world order has been born.