The current global downturn, the worst since the Great
Depression 70 years ago, pounded the last nail into the coffin
of globalization. Already beleaguered by evidence that showed
global poverty and inequality increasing, even as most poor
countries experienced little or no economic growth,
globalization has been terminally discredited in the last two
years. As the much-heralded process of financial and trade
interdependence went into reverse, it became the transmission
belt not of prosperity but of economic crisis and collapse.
End of an Era
In their responses to the current economic crisis, governments
paid lip service to global coordination but propelled separate
stimulus programs meant to rev up national markets. In so doing,
governments quietly shelved export-oriented growth, long the
driver of many economies, though paid the usual nostrums to
advancing trade liberalization as a means of countering the
global downturn by completing the Doha Round of trade
negotiations under the World Trade Organization. There is
increasing acknowledgment that there will be no returning to a
world centrally dependent on free-spending American consumers,
since many are bankrupt and nobody has taken their place.
Moreover, whether agreed on internationally or unilaterally set
up by national governments, a whole raft of restrictions will
almost certainly be imposed on finance capital, the untrammeled
mobility of which has been the cutting edge of the current
crisis.
Intellectual discourse, however, hasn't yet shown many signs of
this break with orthodoxy. Neoliberalism, with its emphasis on
free trade, the primacy of private enterprise, and a minimalist
role for the state, continues to be the default language among
policymakers. Establishment critics of market fundamentalism,
including Joseph Stiglitz and Paul Krugman, have become
entangled in endless debates over how large stimulus programs
should be, and whether or not the state should retain an
interventionist presence or, once stabilized, return the
companies and banks to the private sector. Moreover some, such
as Stiglitz, continue to believe in what they perceive to be the
economic benefits of globalization while bemoaning its social
costs.