The original article was published by the Organization for World Peace website on October 14, 2016. The original article can be read here.
Introduction
As the U.S. election date draws near, the world seems to be on the verge of a Trump apocalypse. From Canada to Germany, countries around the world are preparing contingency plans for the possibility that the U.S. millionaire Donald Trump will win the U.S. presidential election and implement his election promises of isolationism and coercive foreign policy.
However, Trump’s success in U.S. politics is far from being due to luck. It is not a coincidence that just as the popularity of Donald Trump is on the rise, similar nationalist phenomena such as the U.K.’s exit from the European Union and the rise of Euroscepticism are also gaining momentum. Nationalism, regionalism, and factionalism are on the rise all across the globe. Countries are increasingly looking inward and distrustful of transnational organizations. National leaders are increasingly able to play on the fear of the “outsider” to stay in office. This strategy is working in many different countries across vast geographical regions.
The rise of isolationism is not solely due to ambitious leaders. Mirroring the decline of the economic connections is the political re-fragmentation of the world. The decline of the Pax Americana and the return to multi-polarity in international relations also signals the return to regional trading blocs and local identities. The recent events demonstrate that globalization is ultimately a political outcome reached due to specific circumstances. It will disintegrate once these circumstances no longer apply.
A Brief History of Modern Globalism
Triumph of Liberalism
The modern phase of globalization, powered by new communication technologies and increased trade, first emerged during the 1970s. It accelerated after the fall of the Soviet Union. The so-called “Washington Consensus” saw world governments pledge to tear down barriers to trade, reduce government interference, and improve global capital mobility. This was the age of globalist triumphalism, with works such as The End of History proclaiming the inevitable defeat of competitors to the Western liberal-capitalist model. A global consensus emerged that agreed political liberalization and laissez-faire economics are universal human values the world will come to embrace.
Yet after almost 40 years, the once predicted inevitable future of mankind is running out of steam. Culturally, Western liberalism and secularism are on the defensive. In the Middle East, Islam re-emerged as a political and cultural force. Christianity and secular identities are again becoming intertwined in both the U.S. and Europe. Europe again raises the banner of Christianity to demarcate itself from “the rest”, as waves of Syrian refugees flee from their country’s civil war. Meanwhile, the U.S. election now pits two candidates from the supposed opposite ends of the political spectrum that are both openly distrustful of free trade.
The return of statism
The rise of China and the return of Russia to the world stage have also impacted the general perception of globalization. Western perception of both China and Russia is that both favor state sovereignty, government control over national affairs, and less freedom of capital. In sum, these governments favor policies that are opposite of what globalization prescribes. Yet, China has enjoyed a meteoric economic rise despite its statist tendencies. Similarly, Russia recovered from its 1990s economic basket-case situation by seemingly reasserting the state’s dominance over the private sector. Both of these states were also able to survive the 2008 Financial Crisis in a better shape than anticipated, thanks to massive government intervention that supplied liquidity and cut down on the potential capital flight.
The Future of Globalization
Globalization: a short history
Given the current state of affairs, what will the future of globalization be? It would seem that globalization does not necessarily correlate well with better technology. Economic historians sometimes look back to the period immediately prior to WWI as a golden age of globalization. Trade during this period reached a level that will not recover until the 1970s. Yet between 1914 and 1970 technology advanced by leaps and bounds.
Newer, faster communication technology certainly made globalization easier. But it does not mean the spread of global consciousness is inevitable. Despite the emergence of new technologies, global connections only recovered long after the disruption caused by the two world wars.
World trade only grew after the Bretton Woods system of “managed capitalism” collapsed amid high inflation, a global energy crisis, and political chaos in the democratic world in the 1970s. Since then, neoliberalism has become the dominant economic ideology, and the continued relaxation of government control has led to more global trade and investment. With this history in mind, it can be said that globalization is the result of political decisions rather than merely a function of technological improvement.
Growing Regionalization
With the political environment of the world turning against globalization and becoming increasingly security-driven, globalization is losing steam. The world is increasingly carved up into regional trade blocs that also increasingly bear political responsibilities. Power and responsibility are devolving from post-war international organizations back to more localized institutions.
The new emerging local institutions are taking on the tasks of facilitating regional trade through unified trade policies and tariff barriers. Regional organizations such as ASEAN in Southeast Asia, the African Union, and of course, there is the European Union, have evolved into regional governing bodies that greatly influence local trade policies. The European Union has taken this regional integration approach further. Now people debate it will evolve into a super-state.
Politics, it would seem, are becoming more locally driven. The days of the Washington Consensus, when global institutions such as the IMF and the World Bank were able to direct policies to Third World states, might be truly over. In its place is a patchwork of regional organizations that coordinate regional economic, political, and security policies.
Conclusion: A More Regional World
The re-emergence of multi-polarity
The rise of regional blocs goes hand-in-hand with the re-emergence of big power politics. Major powers often seek to create an area around themselves where they exercise privileged political and economic influences on their neighbors. This has the benefit of both creating buffer states in case of war, as well as a guaranteed market for the major power’s exports.
As far back as 1992, Russia had sought to revive its traditional sphere of influence. Russian interference in Ukraine and the Russian revival of the Eurasian Economic Union are sometimes interpreted as a throwback to this policy. Similarly, Chinese preoccupation with island chains, regional institutions such as the Asia Infrastructure Investment Bank and RCEP, is seen by some in the West as Chinese efforts to increase its own influence in its immediate neighborhood.
The Future
If globalization is truly due to the existence of a global superpower as some theorized, then we should not be surprised at the demise of the globalized world with the relative economic decline of the United States from its almost unchallenged post-war position. In its place will be a patchwork of regional trading blocks. Some of these blocks will be dominated by one major state, while influence in others will be more evenly distributed. But whether such arrangements will be beneficial to their residents compared to the globalized system of the late 20th century, none can say.
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