(Interesing article by Bello that claims a "global social democracy"
is unfolding that will replace neoliberalism. You will see, however,
that he opposes GSD from the left. I would only question this
analysis which places emphasis on the importance of Joseph Stiglitz,
George Soros et al. If there has been any evidence of Stiglitz's
economic thinking in the new administration, it has escaped my attention.)
http://www.fpif.org/fpiftxt/5765
The Coming Capitalist Consensus
December, 26 2008
By Walden Bello
Not surprisingly, the swift unraveling of the global economy combined
with the ascent to the U.S. presidency of an African-American liberal
has left millions anticipating that the world is on the threshold of
a new era. Some of President-elect Barack Obama's new appointees - in
particular ex-Treasury Secretary Larry Summers to lead the National
Economic Council, New York Federal Reserve Board chief Tim Geithner
to head Treasury, and former Dallas Mayor Ron Kirk to serve as trade
representative - have certainly elicited some skepticism. But the
sense that the old neoliberal formulas are thoroughly discredited
have convinced many that the new Democratic leadership in the world's
biggest economy will break with the market fundamentalist policies
that have reigned since the early 1980s.
One important question, of course, is how decisive and definitive the
break with neoliberalism will be. Other questions, however, go to the
heart of capitalism itself. Will government ownership, intervention,
and control be exercised simply to stabilize capitalism, after which
control will be given back to the corporate elites? Are we going to
see a second round of Keynesian capitalism, where the state and
corporate elites along with labor work out a partnership based on
industrial policy, growth, and high wages - though with a green
dimension this time around? Or will we witness the beginnings of
fundamental shifts in the ownership and control of the economy in a
more popular direction? There are limits to reform in the system of
global capitalism, but at no other time in the last half century have
those limits seemed more fluid.
President Nicolas Sarkozy of France has already staked out one
position. Declaring that "laissez-faire capitalism is dead," he has
created a strategic investment fund of 20 billion euros to promote
technological innovation, keep advanced industries in French hands,
and save jobs. "The day we don't build trains, airplanes,
automobiles, and ships, what will be left of the French economy?" he
recently asked rhetorically. "Memories. I will not make France a
simple tourist reserve." This kind of aggressive industrial policy
aimed partly at winning over the country's traditional white working
class can go hand-in-hand with the exclusionary anti-immigrant
policies with which the French president has been associated.
Global Social Democracy
A new national Keynesianism along Sarkozyan lines, however, is not
the only alternative available to global elites. Given the need for
global legitimacy to promote their interests in a world where the
balance of power is shifting towards the South, western elites might
find more attractive an offshoot of European Social Democracy and New
Deal liberalism that one might call "Global Social Democracy" or GSD.
Even before the full unfolding of the financial crisis, partisans of
GSD had already been positioning it as alternative to neoliberal
globalization in response to the stresses and strains being provoked
by the latter. One personality associated with it is British Prime
Minister Gordon Brown, who led the European response to the financial
meltdown via the partial nationalization of the banks. Widely
regarded as the godfather of the "Make Poverty History" campaign in
the United Kingdom, Brown, while he was still the British chancellor,
proposed what he called an "alliance capitalism" between market and
state institutions that would reproduce at the global stage what he
said Franklin Roosevelt did for the national economy: "securing the
benefits of the market while taming its excesses." This must be a
system, continued Brown, that "captures the full benefits of global
markets and capital flows, minimizes the risk of disruption,
maximizes opportunity for all, and lifts up the most vulnerable - in
short, the restoration in the international economy of public purpose
and high ideals."
Joining Brown in articulating the Global Social Democratic discourse
has been a diverse group consisting of, among others, the economist
Jeffrey Sachs, George Soros, former UN Secretary General Kofi Annan,
the sociologist David Held, Nobel laureate Joseph Stiglitz, and even
Bill Gates. There are, of course, differences of nuance in the
positions of these people, but the thrust of their perspectives is
the same: to bring about a reformed social order and a reinvigorated
ideological consensus for global capitalism.
Among the key propositions advanced by partisans of GSD are the following:
* Globalization is essentially beneficial for the world; the
neoliberals have simply botched the job of managing it and selling it
to the public;
* It is urgent to save globalization from the neoliberals
because globalization is reversible and may, in fact, already be in
the process of being reversed;
* Growth and equity may come into conflict, in which case one
must prioritize equity;
* Free trade may not, in fact, be beneficial in the long run and
may leave the majority poor, so it is important for trade
arrangements to be subject to social and environmental conditions;
* Unilateralism must be avoided while fundamental reform of the
multilateral institutions and agreements must be undertaken - a
process that might involve dumping or neutralizing some of them, like
the WTO's Trade-Related Intellectual Property Rights Agreement (TRIPs);
* Global social integration, or reducing inequalities both
within and across countries, must accompany global market integration;
* The global debt of developing countries must be cancelled or
radically reduced, so the resulting savings can be used to stimulate
the local economy, thus contributing to global reflation;
* Poverty and environmental degradation are so severe that a
massive aid program or "Marshall Plan" from the North to the South
must be mounted within the framework of the "Millennium Development Goals";
* A "Second Green Revolution" must be put into motion,
especially in Africa, through the widespread adoption of genetically
engineered seeds.
* Huge investments must be devoted to push the global economy
along more environmentally sustainable paths, with government taking
a leading role ("Green Keynesianism" or "Green Capitalism");
* Military action to solve problems must be deemphasized in
favor of diplomacy and "soft power," although humanitarian military
intervention in situations involving genocide must be undertaken.
The Limits of Global Social Democracy
Global Social Democracy has not received much critical attention,
perhaps because many progressives are still fighting the last war,
that is, against neoliberalism. A critique is urgent, and not only
because GSD is neoliberalism's most likely successor. More important,
although GSD has some positive elements, it has, like the old Social
Democratic Keynesian paradigm, a number of problematic features.
A critique might begin by highlighting problems with four central
elements in the GSD perspective.
First, GSD shares neoliberalism's bias for globalization,
differentiating itself mainly by promising to promote globalization
better than the neoliberals. This amounts to saying, however, that
simply by adding the dimension of "global social integration," an
inherently socially and ecologically destructive and disruptive
process can be made palatable and acceptable. GSD assumes that people
really want to be part of a functionally integrated global economy
where the barriers between the national and the international have
disappeared. But would they not in fact prefer to be part of
economies that are subject to local control and are buffered from the
vagaries of the international economy? Indeed, today's swift downward
trajectory of interconnected economies underscores the validity of
one of anti-globalization movement's key criticisms of the
globalization process..
Second, GSD shares neoliberalism's preference for the market as the
principal mechanism for production, distribution, and consumption,
differentiating itself mainly by advocating state action to address
market failures. The kind of globalization the world needs, according
to Jeffrey Sachs in The End of Poverty, would entail
"harnessing...the remarkable power of trade and investment while
acknowledging and addressing limitations through compensatory
collective action." This is very different from saying that the
citizenry and civil society must make the key economic decisions and
the market, like the state bureaucracy, is only one mechanism of
implementation of democratic decision-making.
Third, GSD is a technocratic project, with experts hatching and
pushing reforms on society from above, instead of being a
participatory project where initiatives percolate from the ground up.
Fourth, GSD, while critical of neoliberalism, accepts the framework
of monopoly capitalism, which rests fundamentally on deriving profit
from the exploitative extraction of surplus value from labor, is
driven from crisis to crisis by inherent tendencies toward
overproduction, and tends to push the environment to its limits in
its search for profitability. Like traditional Keynesianism in the
national arena, GSD seeks in the global arena a new class compromise
that is accompanied by new methods to contain or minimize
capitalism's tendency toward crisis. Just as the old Social Democracy
and the New Deal stabilized national capitalism, the historical
function of Global Social Democracy is to iron out the contradictions
of contemporary global capitalism and to relegitimize it after the
crisis and chaos left by neoliberalism. GSD is, at root, about social
management.
Obama has a talent for rhetorically bridging different political
discourses. He is also a "blank slate" when it comes to economics.
Like FDR, he is not bound to the formulas of the ancien regime. He is
a pragmatist whose key criterion is success at social management. As
such, he is uniquely positioned to lead this ambitious reformist enterprise.
Reveille for Progressives
While progressives were engaged in full-scale war against
neoliberalism, reformist thinking was percolating in critical
establishment circles. This thinking is now about to become policy,
and progressives must work double time to engage it. It is not just a
matter of moving from criticism to prescription. The challenge is to
overcome the limits to the progressive political imagination imposed
by the aggressiveness of the neoliberal challenge in the 1980s
combined with the collapse of the bureaucratic socialist regimes in
the early 1990s. Progressives should boldly aspire once again to
paradigms of social organization that unabashedly aim for equality
and participatory democratic control of both the national economy and
the global economy as prerequisites for collective and individual liberation.
Like the old post-war Keynesian regime, Global Social Democracy is
about social management. In contrast, the progressive perspective is
about social liberation.
Walden Bello is a columnist for Foreign Policy In Focus, a senior
analyst at the Bangkok-based Focus on the Global South, president of
the Freedom from Debt Coalition, and a professor of sociology at the
University of the Philippines.
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