It is often said that the economy is a dull subject. I disagree. The rise and fall of globalization and neoliberalism, the ideological paradigm that promoted it, is the most dramatic story of the last quarter of a century. This was an epic drama, and it was one in which I was fortunate enough to participate both as a public intellectual and an activist.

Let me begin my story in Singapore in November 1996. I don’t know why other civil society representatives and I were invited to the first ministerial meeting of the World Trade Organization, but I guess it was to impress on us critics and skeptics that corporate-driven globalization was the future, and it was useless to resist.

As several speeches by Western government officials confidently affirmed, a borderless world would soon come into being, and presiding over its establishment would be the “Big Three” multilateral institutions.

The World Bank would play the leading role in transforming the economies of the Global South along free-market, neoliberal lines, the International Monetary Fund would ensure freedom of capital flows, and the World Trade Organization, which was portrayed by one of its future director generals as the “jewel in the crown of multilateralism,” would preside over the establishment of a “rules-based global trading system of free trade.”

The unraveling of the globalist project

It is noteworthy that while global trade was the principal focus of liberalization in this vision of globalization, it was in the area of finance that what was expected to be a smooth market-led process would break down. In 1997, capital account liberalization that had been aggressively pushed by the International Monetary Fund triggered the Asian Financial Crisis and ended the three-decade-long stretch of high-speed growth of the so-called miracle economies of the Pacific Rim.

And in 2008, financialization, which became the cutting edge of the transformation of the central capitalist economies, triggered the Global Financial Crisis—the worst crisis of global capitalism since the Great Depression.

Still, it was in the area of trade that the subjective factor crystallized, without whose intervention globalization would not have been reversed. I am referring to the global mass movement against trade liberalization that exploded in the Battle of Seattle in late November and early December 1999.

As I wrote in one of my most quoted pieces a few years ago, one can appreciate the significance of the Battle of Seattle if one notes that in the decade before it,

[T]here were a lot of studies, including United Nations reports, that questioned the claim that globalization and free market policies were leading to sustained growth and prosperity. Indeed, the data showed that globalization and pro-market policies were promoting more inequality and more poverty and consolidating economic stagnation, especially in the global south. However, these figures remained “factoids” rather than facts in the eyes of academics, the press, and policymakers, who dutifully repeated the neoliberal mantra that economic liberalization promoted growth and prosperity. The orthodox view, repeated ad nauseam in the classroom, the media, and policy circles, was that the critics of globalization were modern-day incarnations of Luddites, the people who smashed machines during the Industrial Revolution, or, as Thomas Friedman, the pro-globalization columnist at the New York Times, disdainfully branded us, believers in a flat earth.1

Then came the Battle of Seattle in late fall 1999.

After those tumultuous days, the press began to talk about the “dark side of globalization,” about the inequalities and poverty being created by globalization. After that, we had the spectacular defections from the camp of neoliberal globalization, such as those of the financier George Soros, the Nobel laureate Joseph Stiglitz, and the star economist Jeffrey Sachs. True, neoliberalism continued to be the default discourse among many economists and technocrats.

But even before the 2008 global financial collapse, it had already lost much of its credibility and legitimacy. What made the difference? Not so much research or debate but action. It took the anti-globalization actions of masses of people in the streets of Seattle, which interacted in synergistic fashion with the resistance of developing country representatives in the Sheraton Convention Center and a police riot, to bring about the spectacular collapse of a WTO ministerial meeting—to translate factoids into facts, into truth.

Seattle merits the term bestowed by the philosopher Hegel on the advent of Napoleon—that is, a “world-historical event.” Its enduring lesson is that truth is not just out there, existing objectively and eternally. Truth is completed, made real, and ratified by action. In Seattle, ordinary women and men made truth true with collective action that smashed an intellectual paradigm that had served as the ideological warden of corporate-driven globalization.2

The left, the critique of globalization, and deglobalization

It must be pointed out that the critique of globalization came originally from the left.

The contribution of my institute, Focus on the Global South, to this critical analysis was to pose the alternative paradigm of “deglobalization.” The Economist, the ideological font of free market economics, cited me—in a disapproving context—as having coined the term. I plead guilty. Deglobalization was never meant to be a neutral term. It was conceived in political struggle.

If globalization was what we were opposing, then we had to counter it with the strongest idea possible: deglobalization. When we advanced it a quarter of a century ago, deglobalization was a vision, a strategy, not a description of an empirical reality or process, as it is used now to describe current trends away from globalized production and global supply chains or “reshoring,” though we foresaw these.

This did not mean it was simply a slogan. It was a program, the main points of which were refocusing the economy back on production for the domestic market than for export markets, resubordinating the market to society, reasserting cooperation over competition, replacing the pursuit of narrow efficiency with that of social effectiveness, and allowing for a diversity of ways of organizing and economy, rather than fitting all economies into one mold, the neoliberal template.

It was also an idea that sprang from a rich intellectual tradition associated with the Hungarian thinker Karl Polanyi. In his classic book The Great Transformation that came out in 1944, Polanyi wrote that the unregulated market championed by neoliberals emerged from a process of “dis-embedding” the market from the broader social system, so that market relations came to drive the whole system. But he also argued that this dis-embedding was the first phase of a “double movement.”

When the disembedded market began to run out of control, creating tremendous social crises, society reasserted its supremacy over the market. The second phase occurred after the Great Depression of the twentieth. century, in the shape of strong state intervention to “re-embed” the market in society.

Inspired by Polanyi’s double movement, the deglobalization paradigm called for a second re-embedding of the market in society after the crisis unleashed by the unfettered market under neoliberalism. “Something fundamentally similar is necessary today, with the current crisis of neoliberalism,” I wrote. “Unlike classical socialism, deglobalization does not call for the abolition of the market and its replacement by central planning. What it does call for is the ‘re-embedding’ of market relations in society, meaning that social relations must reflect the subordination of market efficiency to the higher values of community, solidarity, and equality.

The market’s role in exchange and the allocation of resources is important, but this must not only be balanced but also subordinated to the maintenance and enhancement of social solidarity. Acting to balance and guide the market must not only be the state but also civil society, and in place of the invisible hand as the agent of the common good must come the visible hand of democratic choice. In place of the economics of narrow efficiency, we proposed what we might call “effective economics.”

How the left lost its way

In a speech in honor of Nelson Mandela in Johannesburg on July 17, 2018, former US President Barack Obama noted that “challenges to globalization first came from the left but then came more forcefully from the right, as you started seeing populist movements [that] tapped the unease that was felt by many people who lived outside of the urban cores; fears that economic security was slipping away, that their social status and privileges were eroding, that their cultural identities were being threatened by outsiders, somebody that didn’t look like them or sound like them or pray as they did.”

Obama was right: the far right ate the left’s lunch. But he was obviously oblivious to what role his own policies played in this development, but we will come to that.

Seattle was an exclusively left-wing affair, as were the protests against the Group of Eight that culminated in a massive 200,000-person rally in Genoa in July 2001. While the September 11 events dented the momentum of the anti-globalization movement, the World Social Forum, which enjoyed the support of the Brazilian Workers’ Party that came to power in 2002, provided a North-South avenue for the elaboration of anti-globalization strategies. With the outbreak of the global financial crisis in 2008, the anti-globalization movement reemerged in force in the North in what came to be known as the Occupy Movement, the key political products of which were the coming to power of Syriza in Greece and the rise of Podemos as a political force in Spain.

The left’s ability to ride on the anti-globalization agenda was, however, severely compromised by the fact that since the 1990’s the center left in the US and Europe had bought into and aggressively promoted the free-trade, neoliberal agenda. Thus, in the US, it was under the leadership of the Democratic Clinton administration that the North American Free Trade Area (NAFTA) and the WTO came into being, and the New Deal-era Glass-Steagall Act separating commercial from investment banking was repealed. Later, in the wake of the 2008 financial crisis, Obama’s Democratic Party presidency prioritized saving the banks instead of bringing relief to millions of bankrupt homeowners.

Then, in what must rank as a historic misjudgment, Obama promoted the Trans-Pacific Partnership (TPP) that, to the working class, meant a continuation of the export of their jobs to China. Obama’s advocacy of the TPP and poor record in bringing back jobs were likely to be one of the central factors that led significant numbers of traditionally Democratic working-class voters in the Midwest to spurn Hillary Clinton, thus providing Trump the edge in the key states that determined the outcome of the 2016 elections.

In the United Kingdom, Tony Blair and Gordon Brown’s New Labour pushed the “Third Way,” key elements of which were support for thoroughgoing financial liberalization and state promotion of the drive to make London supplant New York as the global financial center. In Germany, the Social Democrats (SPD) under Gerhard Schröder did what the center-right Christian Democrats could never have accomplished: push neoliberal “reforms”—the so-called Hartz reforms—that loosened wage, tenure, and social security protections for workers.

French socialist figures, for their part, became the most enthusiastic proponents of the euro, the adoption of which required countries to maintain tight non-expansionary fiscal policies that militated against social spending and the reduction of unemployment. Indeed, a French socialist, Pascal Lamy, assumed the leadership of the WTO and became the austere face of globalization worldwide.

Having embraced neoliberalism, the established workers’ parties became defenders of the pro-globalization agenda, leading not only to failure to expand their mass base but also to part of that base leaving their ranks, like the leaders and rank-and-file that left the SPD in the mid-2000’s and helped form Die Linke (the Left).

How the far right hijacked the anti-globalization agenda

Even as the mainstream left failed to capitalize on the independent left’s critique of the ills of globalization and neoliberalism to expand its domestic base, the extreme right was detaching itself, albeit in a halting and selective fashion, from the free trade, neoliberal agenda that it had formerly supported along with the center-right. In the US, Donald Trump broke with the Republican Party and big business when he opposed the Trans-Pacific Partnership that they almost unanimously endorsed.

Seeking to make inroads into the working class, right-wing parties in Europe gradually abandoned or diluted the anti-tax, anti-big-government, and free-market concerns of their original petit bourgeois base and opportunistically embraced an anti-neoliberal and anti-globalization agenda and the welfare state—though grudgingly when it came to the latter.

The strategy paid off. In France, the “new look” bestowed on the National Front by Marine Le Pen, who succeeded her father, the notorious racist Jean-Marie Le Pen, elicited this observation from a French socialist senator: “Left-wing voters are crossing the red line because they think that salvation from their plight is embodied by Madame Le Pen… They say ‘no’ to a world that seems hard, globalized, implacable. These are working-class people, pensioners, office workers who say, ‘We don’t want this capitalism and competition in a world where Europe is losing its leadership’.”

Stealing the left’s working-class base by opposing neoliberalism and free trade and defending the welfare state became the extreme right’s passport to power or to the antechamber of power throughout Europe. But there were two ingredients that the right added that marked off its anti-globalization agenda from the left: racism and a reactionary nationalism aimed at migrants.

In Denmark, the People’s Party broke with its parent group’s anti-tax focus, becoming a defender of that country’s generous public sector instead, provided that its benefits would be limited to Danes. Norway’s Progress Party followed suit. So did Austria’s Freedom Party.

Other right-wing groups in Europe were not far behind in skillfully cherry-picking elements of the traditional left’s program and inserting them into a framework of equity, sharing, and community, but one based on blood, ethnicity, and race—in short, an exclusionary nationalist welfare political economy.

Welfare but only for “our kind” is a theme that also began to resonate on the right in the United States. Richard Spencer, one of the most outspoken and controversial white nationalists, has argued that “universal healthcare is less confusing and nonsensical (and probably cheaper) than what White people have to deal with now,” but that “we must accept that healthcare is an issue we cannot rationally address until we have a European nation.” That the Affordable Care Act or Obamacare has not been repealed is due to its grudging acceptance by Trump’s Make America Great Again (MAGA) base, even as it is denounced rhetorically by Republican Party legislators.

Donald Trump and deglobalization

Let me focus on the United States, where Donald Trump rode the rhetoric of anti-globalization or deglobalization to power and is currently refashioning a world that is quite distant from the liberal internationalist globalized world that was in existence just one year ago.

There is no going back to that predictable world favored by both liberal and conservative elites. I may disagree on other points Canadian Prime Minister Mark Carney made in his speech in Davos a few weeks ago, but I fully agree with his assertion that “We are in the midst of a rupture, not a transition.” There are three major reasons why--all relating to US policy under Donald Trump.

First, the politics of rage, not the economics of narrow efficiency in the service of corporate profitability, is now in command. In the United States, globalization created two antagonistic communities: one that benefited from it due to their superior education and incomes, the other that suffered from it owing to their lack of both economic and educational advantages. The latter is the vast sector of the population that Hillary Clinton called the “deplorables,” but is better known as the “Make America Great Again” folks or MAGA base. That community will not easily forget either the sufferings brought about by the deindustrialization spearheaded by Apple, General Motors, and other well-known TNCs or the slights they endured from Hillary, whom they regard as being in the pocket of Wall Street.

A second reason for the strength of the deglobalization wave is that the multilateral order that served as the political canopy or system of governance for free trade and unobstructed capital flows is on the brink of collapse. The World Trade Organization, which was once described as the jewel in the crown of multilateralism, no longer functions as a system for governing world trade, partly owing to sabotage by the United States, when, under Obama and later Trump and Biden, Washington could no longer rely on favorable rulings in trade disputes.

The International Monetary Fund has not recovered from its reputation for promoting austerity in developing countries and its push for unfettered capital flows that brought down the Asian tiger economies. The World Bank is also discredited for its complicity in imposing austerity measures as well as for the wrong-headed policy of export-oriented industrialization for Global North markets that the Bank prescribed as the route to prosperity for developing countries—one that is now especially fatal for those who followed it, given the ultra-protectionism sweeping the United States.

Third, national security, both economic security and military security, has displaced corporate prosperity through trade and investment as the principal consideration in relations among countries. Both the Biden and Trump administrations have banned the transfer of advanced computer chips and other strategic IT products and processes to China, and more such measures will follow.

Reorganizing and regionalizing, if not nationalizing, access to and supply lines for key resources for advanced technologies like lithium, rare earth, copper, cobalt, and nickel is now an overriding concern, the aim being not only to monopolize these sensitive commodities but to prevent competitors from getting hold of them.

The “Donroe Doctrine”

The convergence of the geoeconomics of deglobalization and geopolitics is articulated in the recently released National Security Strategy 2025, now popularly known as the “Donroe Doctrine:”

Strengthening critical supply chains in [the Western] Hemisphere will reduce dependencies and increase American economic resilience. The linkages created between America and our partners will benefit both sides while making it harder for non-Hemispheric competitors to increase their influence in the region. And even as we prioritize commercial diplomacy, we will work to strengthen our security partnerships—from weapons sales to intelligence sharing to joint exercises… The Western Hemisphere is home to many strategic resources that America should partner with regional allies to develop, to make neighboring countries, as well as our own more prosperous… The United States must be preeminent in the Western Hemisphere as a condition of our security and prosperity—a condition that allows us to assert ourselves confidently where and when we need to in the region. The terms of our alliances, and the terms upon which we provide any kind of aid, must be contingent on winding down adversarial outside influence—from control of military installations, ports, and key infrastructure to the purchase of strategic assets broadly defined.

That last point refers to, among other assets, “broadly defined,” Greenland and the Panama Canal.

TNCs and Donald Trump

How transnational corporations are relating to the world being shaped by Donald Trump is shown by the moves of Apple. Probably the US corporation that benefited most from globalization, Apple has adjusted to the direction where the wind is blowing, and that is towards deglobalization Trump-style.

It is now leading the so-called reshoring process. It has read the handwriting on the wall and, though this will negatively affect its bottom line and scramble its operations, to protect the remainder of its super profits, it is leading the reshoring of its supply chains, with a planned $600 billion investment in the manufacture within the United States of its iPhone, iPad, MacBook, as well as in the fabrication of semi-conductor chips.

Boasting that Apple's manufacturing plans will create 450,000 jobs in the United States, CEO Tim Cook admitted to being a hostage to Trump’s push to deglobalize the operations of American firms, saying, “The president has said he wants more in the United States… [and] we want more in the United States.” Where Apple goes, others follow, among them U.S. chipmakers Intel and Nvidia, automotive leader Tesla, and pharmaceutical giant Johnson and Johnson.

But American firms are not the only hostages to politics. Among the foreign firms that have bowed to Trump’s ultra-protectionist push via unilateral tariff increases by regionalizing or nationalizing their supply lines are Hyundai Motors, Honda Motors, Samsung Electronics, Taiwanese chipmaker TSMC, and pharmaceutical firm Sanofi.

Although reshoring or relocation has proceeded by fits and starts over the last decade, under the first Trump administration and the Biden administration, it is likely to accelerate over the next few years, despite constraints and inefficiencies, as economic nationalism rises in the United States and the West. With Trump imposing unilateral tariffs on Mexico and Canada, companies are realizing that relocating to these partners of the US in the USCMA may not appease Trump; they will have to relocate to the United States itself, despite the disruption and chaos that might accompany that process, such as that which saw 300 workers vital to the Hyundai facility in Georgia arrested by ICE and deported to Korea.

Reclaiming deglobalization

The issue, then, is not the inevitability of deglobalization but what form deglobalization will take. Deglobalization marked by ultra-protectionism in trade relations, unilateralism and isolationism in economic and military relations, and the creation of a domestic market geared principally towards the interests of the racial and ethnic majority is one way to deglobalize. That is indeed where Trump is leading the United States.

But there is another way to deglobalize, the key elements of which I laid out in my book Deglobalization: Ideas for a New World Economy 25 years ago.3

One, we do not demand a withdrawal into autarky but continued participation in the international economy, but in a way that ensures that, instead of swamping it, international market forces are harnessed to assist in building the capacity to sustain a vibrant domestic economy.

Two, we propose that via a judicious combination of equality-enhancing redistributive measures and reasonable tariffs and quotas, the internal market will again become the engine of a healthy economy instead of being an appendage of an export-oriented economy.

Third, we promote participation in a plurality of economic groupings–those that allow countries to maintain policy space for development, instead of imprisoning them in a single global body, the World Trade Organization, with a uniform set of rules, one that favors the interests of transnational corporations instead of the interests of their citizens. The BRICS is one such grouping, but it is not the only one.

Fourth, we feel that progressive deglobalization does not contradict but complements international cooperation in the positive sense of solidary efforts in pursuit of our common interests and values. Such an endeavor is more than ever a necessity, especially in light of the climate emergency, but it must be truly equal and not imposed by a hegemon.

Fifth, inspired by the work of Karl Polanyi, we advocate the re-embedding of the market in the community, so that instead of driving the latter, as in global capitalism, the market is subject to the values and rhythms of the community.

And finally, in contrast to the far right, we uphold the notion of community as one where membership is not determined by blood or ethnicity but by a shared belief in democratic values.

In short, it’s time for the long-postponed swing of the pendulum, Polanyi’s second movement, to take place, with the state and civil society cooperating to aggressively discipline and regulate the market and capital. That is the alternative we offered a quarter of a century ago. This fluid system of international trade that allows, especially, the economies of the Global South, the space to pursue sustainable development, is not far from the flexible global trading system before the takeoff of globalization in the late eighties, the General Agreement on Tariffs and Trade.

Twenty-five years later, we continue to promote a route of progressive deglobalization, one that avoids the extreme of the doctrinaire dystopia of corporate-driven globalization, on the one hand, and, on the other, savage unilateralism and protectionism. This route to deglobalization is not new, nor, some would claim, particularly radical. Keynes’ common sense advice, addressing the global situation in the 1930s, is very relevant to our times: “Let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national.”

Had we taken this route, I dare say, the chances are great that we would not be in the terrible mess the world is in today, with the threat not only of trade war but of real war at its doorsteps. There is still time to take this route, or some path close to it, but the window of opportunity is closing fast.

Let me end with my favorite quote from the Italian Marxist Antonio Gramsci, one that is so apt for our times: “The old world is dying, and the new one is struggling to be born. Now is the time of monsters.” Gramsci is right: We live in an era of multiple crises, or to use a fashionable term, polycrisis, but this can also be one of multiple opportunities.

Notes

1, 2 Walden Bello, The Meaning of Seattle: Truth Only Becomes True Through Action, Common Dreams, Nov 28, 2009.
3 Walden Bello, Deglobalization: Ideas for a New World Economy (London: Bloomsbury/Zed, 2002).