In her most recent book Kari Polanyi Levitt observes that the word “globalization” cannot be found in the Oxford Shorter English dictionaries predating 1994 nor in the spell-check programs of that era. It emerged from nowhere at that time and for a reason: to cast a light of benign inevitability over the project of Western hegemony offered up as the future following the collapse of the USSR.
Today, as I write on the 200th birthday of Karl Marx, this project has fallen short and may be teetering on the brink of its own collapse. For three main reasons. One is China. A second is Russia. And the third and most important is the misgovernment of finance in the United States and Europe.
The big idea of the 1990s was that a unified open liberal world order dominated by banks could bring democracy and prosperity to the East. This idea, to be sure, had been road-tested since the early 1980s in the Global South, and the name for the experience there was the “Lost Decade.” But in the East it was fresh – as well as being, to a degree, authentically believed in the heady moments of the disappearance of second-rate socialism in Europe.
The illusions did not last long. In Russia they were already shattered by Yeltsin’s tanks in 1993 and then by the open corruption of his re-election in 1996. Meanwhile, the promise of prosperity faded in an orgy of privatization, asset-stripping and wage and pension theft and demographic disaster. By the late 1990s, the hoax had been openly exposed, corrective measures had to begin, and the Russian flirtation with “Western” democracy was over.
China meanwhile chose a different path – Kadarism on an epic scale. Recall the Hungarian prime minister installed by the Soviets after the defeat of revolution in 1956 who then declared: “If you’re not against us, you’re with us” and found the way to social and cultural liberalization and consumer-based economics without political reform. Scale that up by orders of magnitude, and you have China. A crucial caution in the mid-1990s averted liberalization of capital controls, so that in 1997 China escaped the Asian financial crisis. Then Chinese growth in the 2000s spawned a worldwide commodities boom, making possible the South American summer, which brought a measure of sustained social democracy to that continent for the first time.
In the West George W. Bush and Dick Cheney demonstrated, in Afghanistan and Iraq, the obsolescence and futility of modern military power. At the same time, they exhausted what little remained, after NATO expansion and Kosovo, of respect in the East – and also among a significant share of European opinion – for the idea that Western values were a guiding principle rather than an empty slogan. Globalization became a synonym for accepting that one country, working in its own interest and heeding no-one else, would set the terms by which the world was governed, throwing its military force into the balance even long after it became obvious to any detached observer by how much benefits fell short of costs.
Then, at the end of the Bush era, the great crisis exposed to the entire world the hollow foundations of Western finance. In the decade since, the consequence of reactionary economic doctrines and incompetent, stubborn policymakers has been to tear apart the one great constructive project of the neoliberal age, namely the European Union. So, a decade after Wall Street followed the path of the USSR – but was rescued and propped up, unlike the Soviets, sustained in zombie form under Obama – we have a world made old, a tired hegemon and a fraying alliance, picking fights that, suddenly, it is surprised to learn, it cannot actually win short of nuclear war.
In Syria Russia has put an end to the project of regime change, with effects that will extend to Ukraine, the Caucasus and eventually to the heart of Europe. In Africa and Western Asia, China is taking charge of development engineering. These phenomena lack ideological content; they have nothing to do with Marx, Lenin, or even socialism – merely with the consolidation of a politics of national interest not dominated by the United States. In South America for the moment, US-oriented neo-fascist regimes are ascendant, but they cannot last long. And when the worm turns again, leaders of those countries will have to ask themselves, who interferes in their political affairs, and who does not?
War Or Depression
So yes, a crisis of globalization. It is one with a fair prospect of turning out badly, in either a final catastrophic war, or – more likely – a Depression in the West, alongside a consolidation of national development strategies on the Eurasian continent. China does not, in the end, really need the United States. And Russia, in the end, can forge the partnerships it needs with its geographic neighbors and near neighbors, including parts of what were once considered “Western” Europe. These processes, unless disrupted by war or internal upheaval, are likely to resist interruption from the outside.
For the West, all this poses a deep and difficult question. Having squandered your reputation for superior values, having debased democracy before finance, having shown disregard for the postwar structures of international law and, at the same time, having demonstrated that Mao was not far off when he coined the accolade “paper tiger” – how, having done all of this, do you restore your reputation and your position in the world?
A bit of humility, of recognition that the delusion of “globalization” as it was conceived twenty years ago by very foolish people, cannot be sustained, and a program of national and regional reconstruction focused on the most urgent social, resource and climate challenges – that might be the right way to start.
About James K. Galbraith
James K. Galbraith holds the Lloyd M. Bentsen Jr. Chair in Government/Business Relations and a professorship of Government at the Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin. He is the author, most recently, of The End of Normal.