A Defense of Moderated Globalization against its Critics from the Right and the Left

Grazia Borgna
Former Director of CESI

Colin Crouch

The Globalization Backlash

Polity, Cambridge, Oxford, Boston, New York, 2018

With this book, Colin Crouch analyzes and partly denounces globalization and wants to draw our attention to the fact that it is generating, in some people and in some places, a refusal and a dangerous return to nationalistic closures, that could jeopardize democracy.

He underlines how globalization, following the acceleration it exerted to the creation of a world market, has increased competition between economic subjects and provoked drastic productive reconversions, unemployment, underemployment and unstoppable migratory waves. A deep sense of disorientation, insecurity and the consequent search for "safe havens" and certainties regarding the future has spread everywhere.

The feeling of loss of identity concerns above all the countryside more than the cities, the traditional productive sectors more than the new digitized enterprises. Consequently, it does not concern so much people and places that have benefited from the expansion of trade and the new technologies, as those who have suffered from the process, losing their status and prospects for the future.

But, Crouch observes, it concerns only marginally young people, who have anyway suffered a strong regress in the quality of their life and live in a condition of precariousness and underemployment which makes their present and future uncertain. Despite all this, for the most part they are bearers of a cosmopolitan mentality and culture, that makes them feel citizens of the world, without any ethnic, religious and gender preconception or constraint. This is an element that can form the basis of a new multidimensional conception of citizenship and identity which, starting from the local level, may gradually extend to the national, continental and planetary levels.

The natural cosmopolitanism of young people is a culturally fertile ground that can counteract neo-nationalism, that brings about hatred and closure, and can oppose it with the values ​​and advantages of an open and inclusive multilevel citizenship. To confute the arguments of the nationalists, "the starting point is to demonstrate the constructed nature of the idea of a nation state". The national identity (which especially the right, but also a fringe of the left, refers to) was born in a relatively recent era, and is linked to the birth of the European national states. It follows from the French Revolution and the creation of the tools put in place to "build up" the national identity: compulsory military service, state schools, common language, etc. Therefore, “States have certainly been highly successful in their nation-building project, but they remain constructs, not essential, immutable realities”.

Today the reference to one's "ancient roots", the favorite slogan of the nationalists, is consequently a deception, an exploitation to motivate their opposition to globalization. It affects both the far right and the far left. Some components of the left argue that labor and democracy, being strongly linked to a nation, cannot be protected and defended at the supranational level. The right proposes the closure of borders and the return to a society based on "tradition": God, homeland and family. Both visions, notes Crouch, although starting from antithetical ideological assumptions, have common proposals for limits to ethnic heterogeneity, contemplating restrictions on immigration, especially Islamic, opposition to any transfer of sovereignty, and defense of borders, even if the left takes care to avoid an open hostility towards immigrants.

Despite this objective convergence, the author does not share the opinion of those who believe that globalization has canceled out the difference between left and right. As proof of this, he cites the fact that, although a part of both social-democracy and the moderate right have embraced the neoliberal project uncritically, the responses of their electorate have been very different. On the one hand, the left has been accused of not defending the weaker classes sufficiently from the attack on working conditions and welfare systems. On the other hand, large sectors of the economy and businesses accuse the parties of the right of not having defended them from the invasion of low-priced goods, coming from countries where labor, fiscal and environmental protections are not respected. To regain the confidence of their electorate, left and right must consequently take divergent paths. The left must choose to move towards a supra-national democracy, and extend democracy above the nation-state.

Crouch says that the most effective response to counter the serious economic, social, fiscal and environmental distortions produced by the "neoliberal globalization project" is not fencing within one's own borders, but launching collaborative policies open to confrontation. “The dominance of neoliberal policies made it difficult for governments in poor countries to protect their economies from fitting in with whatever fate participation in global markets assigned to them". “There can be no simple ‘return’ to a pre-globalized world of autonomous national economies… The idea of national economic sovereignty needs to give way to one of pooled sovereignty in pursuit of a better transnational regulation of the globalized economy”.

According to the author, the solution cannot be found, as the nationalists propose, in the return to a world divided into national states, in a climate of strong competition. Firstly because, despite the undoubted distortions, globalization has significantly attenuated the absolute poverty that was afflicting a great part of the world. Secondly, he invites the reader to consider the consequences that would arise following a block of the globalization process and a return to self-sufficient national borders. “Were globalization now to go into reverse, the world would become poorer”. A return to national frontiers would inevitably lead to isolation, wars, protectionism, and to hamper innovation. It would penalize development and well-being, at the expense of the weakest.

Crouch is convinced that the globalization process must proceed, but proposes to launch strong policies to combat the distortions that exist both at European and global level, a “smart globalization” which only apparently would block development, but would allow instead to adopt those social and environmental policies capable of hindering nationalism and xenophobia. According to Crouch, new rules are needed "tied to the achievement of clear labour and environmental standards ... [hindering] the offering of very low corporate tax rates ... [G]lobal corporations force governments into races to the bottom in taxation. Some governments find these races attractive, as by offering very low corporate tax rates they can encourage global firms to base themselves in their territory, ... not even bringing much employment with them...The situation has now reached a point... that there will be international action on rules about fiscal location. Reduced fiscal competition among countries could also lead to a reversal of the recent tendency for corporate and capital taxes... to be far lower than those on employment incomes, a tendency that accounts for part of the rise in inequality that has affected many countries...[G]overnments are beginning to call for international cooperation to deal with the problem. ... It is not enough to provide generous social support for people who are unemployed or left in low-income occupations as a result of these processes, or to encourage firms and government organizations to locate back-office and warehouse activities in such places. We need collaboration among EU, national and local authorities…

Globalization can work only if it is ruled by international Agencies like the OECD and WTO, which have to obtain democratic legitimacy and the means to stem the geographical and social inequalities produced by the neo-liberal policies. Extending democracy beyond the nation-State means also extending citizens' rights.

A globalized world needs citizens who are at ease with a variety of layered identities – matryoshka dolls. But this means paying attention to the lower levels of little dolls, as well as to the larger ones. We need to be able to feel loyalties and identities of varying strengths – to our local community, our town or city, our region, our country, our world region, our common humanity". Democracy is participation, and “Participation in democracy requires a balance between reason and emotion ... If it is technocrats who dominate the world governed by reason alone, the world of emotions is ruled over by those who know how to manipulate powerful feelings”. And it must be acknowledged that “among the few social identities remaining that can both have political meaning and carry powerful emotions is nationhood."

It is possible to create democratic assemblies at world-regional level, and then “national and world-regional democratic levels can reach out to embrace global ones”.

An example of this is today's Europe, where unique supra-national institutions have been created: a European Parliament elected by universal suffrage, a supranational Court that allows citizens to take action against their governments, a Charter of fundamental rights that has established a European citizenship. Europe, Crouch observes, still leads the world in the pursuit of improved social and environmental standards, and could influence choices at the global level towards “a more civilized globalization”. This demonstrates the potential benefits deriving from supra-national institutions. He affirms that “the neoliberal deregulation has been damaging” and that in order for globalization to be managed, “national communities can only reassert regulation of that process by pooling their sovereignty and trying to introduce as much democracy as is practicable into that process”. Precisely the opposite of nationalism. Differently from what Rodrik argued in The Globalization Paradox, that there is incompatibility between democracy, national sovereignty and hyper-globalization and that we could have only two of these (his famous trilemma), Crouch says that the alternative solution is to “moderate” globalization “through regulation by international agencies...[and] the extension of democracy within world-regional economic associations...Within such a framework, the nation state continues to play its role, both directly, in areas of autonomy where it remains capable of regulating globalization, and by democratizing its relationship to institutions of global governance”.

Even if in this phase of the globalization process the weight of sovereignist governments (like the American one and those in some European countries) has increased, with the consequent weakening of the international Organizations, their rise has found a halt in Europe in the last European Parliament elections. Nationalist parties stopped at 20% of the votes. The relative majority party, the Popular Party, despite having lost consensus, came out the first party in Europe. After lengthy consultations with liberals and socialists, it was able to win the Presidency of the Commission. The European Greens have greatly increased their weight.

The inauguration speech by the President of the Commission, Ursula von der Leyen, highlighted some very important programmatic points. Among these we mention the consideration of an ecological tax at European borders, a carbon pricing scheme and the launch of a broad consultation to collect the proposals by citizens and civil society organizations on the future of Europe. If these proposals are rapidly followed up, both to increase the European Union's own resources and to give a green turn to the European economy, and to launch a Conference on the future of Europe, the Commission will be able to bring the European institutions closer to the citizens and to bring about a turnaround towards a more participatory and politically committed European society.

But the start of a green economy can represent a turning point only if the impact on the environment will have a decisive impact on employment and the quality of work. The transition phase, aimed at the ecological conversion of the economy, will require huge investments and therefore cannot be left, as happened in the past, in the hands of multinational companies and their monopolistic or oligopolistic use of the market. There will be a turning point only if that phase is accompanied by a vast global plan to safeguard common goods, aimed at improving the quality of life of citizens. A plan that includes a permanent and continuous training, especially for young people, that prepares them to be protagonists and not passive subjects of the process, a plan that is aimed at creating the millions of jobs that are currently missing. Not precarious jobs, but stable and of good quality. What young people all over the world are asking is to be able to take back their future in their hands. The green conversion of the economy must represent an opportunity for young people to put their skills to good use, count on a decent and continuous income, form a family and look at old age with serenity. And see themselves recognized in facts and rights as full-fledged citizens.