Global Change and Uncertainty : The Paradox of our Time
A Research Report on Sovereignty and the Magnetic Power of Interdependency
Globalization’s Sketchy Record of Predicting Outcomes
The globalization Grand Narrative made many bold promises about the self-regulating market and the efficiency of the price system. But despite its gold-plated attraction, liberal cosmopolitanism has not become the dominant feature of globalization with its overarching vision of transnational governance. Nor has the state has withered away as many believed was an inevitable consequence of market liberalism. These powerful claims ideas seems preposterous in retrospect, considering the engine of the BRICs economic miracle is due to the rowing and steering and investing by the leading states in the global South. Instead the rising tide of inequality across all continents is the new core element in the narrative (Rodrik, 2012 ;Piketty,2014)) (See Figure 9 : Core Concepts of Globalization : Taking Stock for a more detailed examination). The purpose of this Report is to investigate the magnetic power of interdependency and the reasons why the global order remains so volatile, unstable and unpredictable.
Tectonic Structural Change : Four Game-Changers
The principal finding of this Report is that the global landscape has been transformed by widespread structural change. Much has been state centric but much has been driven by other factors. The top four tectonic forces reshaping the global economy for this Report include : the’ rise of the rest’ of the global South market economies, the precarious growth of the global middle class, the disappearance of private sector unions from the workplace throughout the industrialized world, and the instrumentalization of soft power by global publics deeply skeptical of the ‘there-is-no-alternative’ to the market mindset.
These are long historical processes that have intensified after the 2008 financial meltdown. With the implosion of the WTO Doha Round and the global banking crisis, the neoliberal global governance vision has faded from view as the uncontested public policy goal. Global governance of course is defined by the values, rules and practices of international cooperation and competition. A principal reason for the breakdown in the multilateral consensus is that states and multinationals are, by instinct and self-interest, rule-benders rather than stringent adherence to legal ordering as an absolute. They do not want to be constricted by stricter legal ordering, particularly at a time of crisis and uncertainty.
Constructing the Ur-Narrative Book-by-Book
Looking at the spectrum of globalization theorists from a variety of disciplines, it is possible to organize them into four epistemic families : Architects of the New World Order, Varieties of Capitalism, Global Governance and Legitimacy and the Global Skeptics (To see these different clusters of thinkers more clearly, we have created Figure 7 - Growing the Globalization Narrative Big and Strong). What leaps out is the wide scope of ideas and conceptual frameworks by these leading contributors. Though the globalization narrative has claimed universality, there are in fact many missing elements that remain sub-themes in a larger story such as the climate change, food security, and global health. Is it too far-fetched to imagine that any one of these themes could be globalization’s defining element of tomorrow ?
Globalization has a history of altering course driven by its own needs and contradictions. Today what happens inside countries has become the turning point of the globalization narrative, reshaping and redirecting global dynamics towards new forms of interdependency. Governments are not standing still and see the international economy as an extension of domestic need. In a state-led system of self-interest, highly polarized societies use the international economy for short-term electoral positioning and domestic coalition building (Slaughter, 2005). National politics now intrude into every effort to move global governance forward while the benefits from one size fits all Syria of globalization have often remained contested and publics unconvinced (Hirst and Thompson, 1996).
Diverse and Conflicting Varieties of Capitalism : A Shaky Pillar of World Order
We have conceptualized global governance in the last four decades as a speedometer. Through this exercise, we are able to track how far the needle has swung away from inter-war free market capitalism to Bretton Woods multilateralism, once its immovable anchor (See Figure 1). Today the needle is in free fall, having left behind a post-war global system of embedded market liberalism with its large footprint of economic oversight and support for the welfare state (Ruggie, 1982). Since the global meltdown in 2008, the retreat from liberal internationalism has pushed the global governance needle into new territory, even away from the free market deregulatory rules of Washington Consensus.
Figure 1 : Conceptualizing the Evolution of Global Governance
On the speedometer, the governance needle fluctuates between messy- multilateralism with the vanishing core consensus, every nation for itself, global G politics and the rise of the BRICs, with their diverse and conflicting varieties of capitalism. Today, global multinationals profit from a fragmented international order and they are able to operate with fewer restraints globally. It is difficult to dislodge the needle and push it backwards to revive golden age multilateralism in some new form because powerful business coalitions have not taken up the issue to realize this goal. In light of this, global governance institutions have not become more functional as Slaughter (2005) argues, but in fact are overwhelmed by the challenge of polarized domestic politics. The sovereign needs of China, the US and the EU are so different that it is impossible to envision a system of equilibrium and balance. Now more than ever, countries look towards ad hoc regional trade agreements rather than multilateral formal treaties. In these agreements, accountability remains minimal and voluntary.
Consequently, it is a misperception to regard the torrent of changes as creating a world of quirky ambiguity and ill-defined hybridity without fixed goals. The truth is, that in a time of great change and uncertainty, states have their eye on the prize, optimizing sweeping political and economic leverage over others. The fragmentation and pluralism in the global arena presents new opportunities and spaces for innovation, dramatic change and forms of governance particularly at the national and local level. But so far these geopolitical shifts have not reduced the plight of the economic losers in this winner-take-all world (Stiglitz, 2014). In the pursuit of self-interest, volatility, acute imbalance defines the international order of our era
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