Building the world back realistically

My last post on the need to build the world back better said that most discussion of the post-covid recovery is mistakenly confined to national borders and should have a global dimension.

It’s a view that could be read as idealistic and naive. The world is retreating from physical globalisation. Building the world back better is probably far from most people’s minds.

The G20 can’t even coordinate itself as it did during the last crisis. The world’s multilateral institutions are under attack: the World Trade Organisation and the World Health Organisation, and more broadly the United Nations. Europeans squabble. The United States and China are Punch and Judy.

But even if world leaders look like they’re intent on turning back the clock rather than building back better, it’s at least worth saying something. As I said in the conclusion to my post, sometimes things change quickly.

For progressives or internationalists it’s also important to think about how and why change happens. The cynic who imagines everything always gets worse is just as inaccurate as the relentless optimist. We’re not heading for an entirely splintered, uncoordinated world where all countries shut in on themselves.

Progress occurs, but it has to be fought for. Who’d have thought a couple of months ago that US protests against police discrimination and violence could have shut down a police department and spread worldwide? Certainly not me.

The end of segregation and votes for black people and women – as ordinary as these outcomes can now sound – were hard-fought struggles against entrenched reaction and commercial interest which echoed around the world. The anti-apartheid movement wasn’t assured of success.

At one time the idea of most countries signing a charter urging world peace and harmony would have sounded silly – yet that is what the United Nations is (with all its shortcomings): a popular attempt at a punctuation mark on mass, mechanised death – supported, of course, by powerful lobbies and nations whose interests it served.

The Treaty of Rome in 1957 had democratic and elite support. It led to the longest period of peace in modern European history.

So positive international change happens and it can be grand in scale, even if progress is far from guaranteed and has to be fought for in order for it to benefit ordinary people rather than only the powerful. The interests of the 1% can at times be made to coalesce with those of the rest of us.

It’d be wrong to imagine that recent trends toward nationalism or insularity can only lead one way, even if further fragmentation looks likely and things can deteriorate across time or place.

At times of stress things can pivot one way or another, making it more important than ever to put ambitious ideas on to the agenda and for good people who’d otherwise do nothing to get off their backsides.

Useful change is usually the result of thoughtful people engaging in protest and democracy, with coherent political objectives: pressure from below, with an eye beyond national borders.

Back on the idealistic subject of the need to build the world back better, it’s important not to see things in binary. Globalisation will moderate and perhaps retreat, but it won’t end. It benefits large, rising powers like China, which needs the high-spending United States to buy its exports. Americans need somewhere to make their stuff, cheaply. And integration was obviously to the advantage of the United States and European corporations in recent decades.

Goods trade will probably continue to stagnate or wobble. Supply chains are shortening after Covid-19. Environmental concerns are prompting some to ask why goods need to be shipped so far.

Robots will take over some jobs from workers, so there’s less need to make products on the other side of the world. America and Europe won’t need to make so many goods in China (even if they still make a lot of things there).

But multinational companies need lower barriers to trade and investment. States usually adapt to the demands of capital.

The institutions that facilitated and accompanied the last phase of globalisation won’t just crumble. They’re needed to smooth the flow of capital and trade with rules and norms for commerce.

A small but significant chance exists that new global institutions emerge to service the changed environment, just as during previous crises. New types of global governance might centre around the digital economy where so much trade now takes place.

International digital trade is largely unregulated but some argue we’re at the start of a new era — like the age of steam, container ship or airline.

Companies (mostly big ones in the US, Europe and increasingly China) will demand protection of their intellectual property. They’ll need rules for selling their stuff to other countries, which needs legislation and common formats. The current talks on digital trade at the World Trade Organisation are among the most interesting and important.

A shift to a new, online, less labour-intensive type of globalisation might already be happening – although any shift won’t be absolute, and shoppers in the rich world will for a long time still want to take advantage of cheap labour in poor countries.

Unfortunately financial globalisation is rushing ahead. That sort of integration has boomed in recent years and doesn’t necessarily look like slowing down nor being regulated better. The world economy will remain a casino for financial market speculators.

Source: Financial Times, H/T @DanielaGabor

What’s likely is that we’re seeing the ending of one phase of international consolidation and the dawn of another. It needs to be bent toward the needs of the majority.