In 2017, Harry Blutstein, author of The Ascent of Globalisation (Manchester University Press, 2016), will be available (via Skype) to give guest lectures on the following themes. If you would like to book Dr Blutstein for a Skype lecture, please contact him on rlwy000 [at] gmail.com.
Foundations of liberal globalisation
During the eighteenth and nineteenth century, the ideas of internationalism (as globalisation was then called) became popular among liberals in the inteligencia, such as Immanuel Kant, Richard Cobden, Giuseppe Mazzini and Ralph Waldo Emerson.
Between 1870 and 1914, the world had a taste of genuine economic integration. Tariffs were low, capital and people moved relatively freely around the world, and there was the emergence of an international currency through the Latin Monetary Union. But it ended in 1914 with the outbreak of war.
After the war, Woodrow Wilson helped create the League of Nations, which was welcome by internationalists. While it was ineffective, it provided lessons to the next generation of liberal internationalists, who emerged during the Second World War.
Men like John Maynard Keynes, Franklin Delano Roosevelt and lesser known bureaucrats like Harry Dexter White, Leo Pasvolsky, and James Meade helped create the foundations of the liberal international order during the 1940s. This included the United Nations, IMF and World Bank. The International Trade Organisation was sadly stillborn.
An integral part of the new international order was the ideal of embedded liberalism, in which welfare-based domestic policies softened the disruptive impacts of free trade.
The rise of neoliberal economic policies has seen the reduction of the welfare safety net in many countries, which may explain the current reaction against economic globalisation.
European Union: designed to fail
The architect of European integration, Jean Monnet created a structure that was deliberated designed to fail. This was an important part of the Méthode Monnet.
When he first launched the Coal and Steel Community, he hoped it would not succeed because to solve the coming crisis further integration would be needed, which was his overarching objective. And so the Europe project has grown, with each crisis leading to further integration.
We can see the same pattern with the Euro crisis, in which monetary union failed, and economists now suggest that the only solution is financial integration.
While Europe was succeeding, the people of Europe accepted the gradual dilution of sovereignty, as policy was driven by political, bureaucratic and economic elites. But the question is: will the Méthode Monnet push integration too far and will the public continue to accept a system imposed upon them by elites in which they are no longer masters of their own destiny?
Corporate influence on globalisation: the good, the bad and the ugly
In the late 1960s, a number of forward-looking CEOs saw the potential of globalisation, and were worried that there was no political will to expand trade and further integrate national economies.
Calling themselves the ‘New Globalists’ they created informal policy institutions – the Trilateral Commission, the Bilderberg Group and the World Economic Forum – that were determined to encourage members of the political elite to work with business leaders to expand the boundaries of globalisation. But this newfound influence had its problems.
This relationship turned ugly when corporate lobbyists, using negotiations on NAFTA and WTO, used their influence to carve out special deals that suited vested interests, and in some cases reduced free markets.
Rise of neoliberal globalisation: victor in the war of ideas
Neoliberal economic ideas go back to early twentieth century, but had little traction until Friedrich Hayek called on neoliberals to engage in the ‘war of ideas.’
Hayek started the ‘war of ideas’ by publishing The Road to Serfdom and creating the Mont Pèlerin Society. But Hayek was more comfortable in the quiet halls of academia rather than the noisy battlefield, and his efforts to take on Keynesian, the welfare state and liberal economics floundered.
The war of ideas was revived by a recently demobbed young air force pilot, Antony Fisher. In 1955, Fisher created the think-tank, the Institute of Economic Affairs, whose policy prescriptions had, by the end of the 1970s, influenced up-and-coming politicians: Ronald Reagan and Margaret Thatcher.
The Institute became the model for other neoliberal think-tanks around the world. To accelerate the process in 1980, Fisher created the Atlas Economic Research Foundation, whose mission was to seed the world with neoliberal think tanks. And so by the early years of the twenty-first century, neoliberals were in the ascent.
Governance of globalisation
Robert Hormats, vice chairman of Goldman Sachs International, argued that ‘The great beauty of globalization is that it is not controlled by any individual, any government, any institution.’ In his book The Lexus and the Olive Tree, Thomas Friedman agreed, when he wrote that ‘the most basic truth about globalization is this: No one is in charge.’
While it is true that there are few hard international rules on global markets, corporate behaviour or criminal activities by states, a system of governance has evolved in which values have been created to encourage responsible behaviour in the global domain.
Transnational organisations have generated these values. For example, global policies are generated by the World Economic Forum; the United Nations used its Millennium Development Goals to drive social and environmental progress, and nongovernmental organisations like Transparency International have tackled corruption by naming and shaming offenders.
Unable to create a strong governmental system of hard rules, globalisation has seen the growth of systems of governance.
Future of globalisation
Up to now, globalisation had been widely supported by the elites. The rise of xenophobic nationalism in the US and across European, however, has jeopardised this consensus. Globalisation has always been a creature of the elites and has never had widespread support among the public. While it was working, opposition to globalisation was not widespread. However, the 2008 financial crisis illustrated the weakness of global governance and resulted in popular disquiet, which was manifested in the Occupy movement and the Tea Party. Separatist movements in Europe are another sign that supranational governance is under threat.
There are other forces at work that show that globalisation is fragmenting, and these are examined.
Using the approach pioneered by Robert Heilbroner in Worldly Philosophers, a series of character-driven lectures are also available. They illustrate the construction of various parts of the institutional superstructure that support globalisation.
- Profile of John Maynard Keynes and Harry Dexter White and the formation of the World Bank and IMF.
- Profile of Leo Pavkovsky and Sumner Welles and how they fought for competing models for the United Nations.
- Profile of Jean Monnet describes how he created the European Project and how he continues to influence its evolution beyond the grave.
- Profile of Walter Wriston, who as CEO of CitiBank broke down regulatory controls to the free movement of capital and the growth of super banks. Bloomberg Businessweek magazine described Wriston as ‘the pivotal figure in the transformation of the banking industry from a somnolent business straitjacketed by regulation into the global free-for-all it is today.’
- Profile of Robert McNamara and his transformation of the World Bank from a backwater, lending little and under the thumb of the US State Department, to a global player. Under his leadership, the World Bank went a long way to free itself from US domination and aggressively invested in projects to reduce ‘absolute poverty.’His reign at the World Bank also saw the introduction of structural loans, which pushed developing countries to adopt neoliberal economic policies.
- Profile of Peter Sutherland, who drove 123 nations to adopt the Marrakesh Agreement, which saw the creation of the World Trade Organisation. Behind-the-scenes, corporate lobbyists helped shape special deals that undermined the principle of free trade and gifted vested interested with special conditions.
- Profile of Richard Epstein, who pioneered the legal concept of regulatory takings, which was incorporated into NAFTA and had since become a feature of most free trade agreements.Regulatory takings allows corporations to sue national governments for regulations that reduce the value of their assets or ability to earn profits. Investor-state dispute settlements have reduced the ability of governments to protect against health, safety and environmental risks imposed by corporate activities.
- Profile of Reverend Leon Sullivan, who popularised the use of private voluntary codes to address the misbehaviour of transnational corporations. While he applied his Sullivan Principles to corporations investing in South Africa, this concept set the scene for the growth of corporate social responsibility codes, a new way to govern the behaviour of businesses.
- Profile of Maurice Strong, who organised two Earth Summits that saw the creation of environmental rules and the United Nations Environmental Programme.Strong also sponsored experts to create a framework that married environmental protection and economic growth. Called ‘sustainable development,’ most countries use this framework to guide their environmental policies.
- Profile of Kofi Annan, who took the UN into new territory by developing moral standards or norms, which have been used to civilise globalisation by spreading its benefits more broadly. One such norm is the Millennium Development Goals, which foster partnerships between governments, NGOs and corporations to address global problems. He also sponsored the Global Compact, which encourages transnational corporations to reduce their harmful impacts on communities, human health and the environment and partner on worthwhile projects that improve human wellbeing.
- Profile of Gro Brundtland, who sponsored the controls on tobacco use, showing that the World Health Organisation was capable of marshalling global support for regulation on health issues.Through public-private partnerships, Brundtland substantially increased funds that could be spent on health programs in developing countries.