This is a uni essay but it's the kind of thing I'd post here anyway, partly because it touches on the same themes but in more detail, and partly because the only way I can bring myself to write essays is if I write them like blogposts. I swear down this is how I sent this in, including citing Sam[]zdat, because I just don't care anymore:
Bibliography
Though one could argue
globalisation has been a phenomena since as far back as the founding of the
Dutch East India company in 1602, the question is whether the United Kingdom
voting to leave the European Union, Brexit, will fundamentally alter the
economic climate of the last forty years, which, as Robert Scott describes, has
been “an era of globalization driven by deregulation and the ceding of power
over trade and regulation to international institutions like the EU and the
World Trade Organization.” (Scott, 2016) In this essay I will firstly attempt to detail
how globalised neoliberalism came about, and then how the United Kingdom came
to the point of Brexit, using works by Bob Jessop, Ngai-Ling Sum, and Karl
Polanyi, and then evaluate Brexit’s significance with regard to the end of
globalisation, using the work of Robert Cox.
Our modern concept of a truly
globalised economy is one that has taken shape since 1980, when Margaret
Thatcher in the United Kingdom, and Ronald Reagan in the United States of
America, took influence from the economists Friedrich von Hayek and Milton
Friedman, and ushered in the neoliberal consensus. I will quickly define ‘neoliberalism’,
since I will be using the term a lot, and the usage of the term tends to vary
from one article or essay to another. In my view, neoliberalism can be
distinguished from different approaches, like social democracy or (small-c)
conservative governance, but also from similar systems like the Ordoliberalism
of Germany, by its reverence for the market as its guiding principle, above all
else. Bob Jessop (Jessop, 2018) says that “whereas neoliberalisation
promotes disruption to boost competition and competitiveness, Ordoliberalism
seeks to achieve these goals by establishing a stable institutional framework.
This contrast is reflected in the greater propensity of neoliberal regime
shifts to crisis-tendencies, ‘blowback’ effects, and resistance.”
The neoliberal orthodoxy as
professed by Friedman, Hayek, et al, was a response to the post-war consensus
(hence PWC), and one can understand neoliberalism best by comparing it to the
system that came before it, which was based around Fordist manufacturing
strategies, and Keynesian political economy. Where the PWC emphasised an almost
equal relationship between labour and capital, neoliberalism favours capital
very heavily. Unions were significantly more powerful in the PWC than they are
now, and this is part due to the neoliberal mastery of what Marxist philosopher
Antonio Gramsci called passive revolution, wherein certain concessions are
given to a subaltern group - whether that be the working class, African
Americans, women, and so on – to prevent that group from actively revolting
against its masters. In the PWC, the
role of the financial sector was almost entirely intermediary (Jessop, 2018), thanks to
legislation that limited the capabilities of banks; following the deregulatory
period of the 1980s, the financial sector became a key part of many economies,
in a relationship Jessop calls ‘predatory’, by focusing on innovation
(inventing things like securitisation or derivatives) and speculation. The PWC
broke down by 1979 for a number of reasons, chief among them the oil crisis of
1973 and the resulting worldwide condition of “stagflation”, where inflation
rose but demand did not, in direct contradiction of Keynes’ work. One can also
not overstate the drastic contribution of the Mont Pelerin Society, which
included in its ranks Hayek, Friedman, and Ludwig von Mises, among others, who
managed to instil in the intellectual classes a firm belief in neoliberalism as
documented by George Monbiot for the Guardian (Monbiot, 2007), or by Kerry Vaughan
for the Effective Altruism people (Vaughan, 2016) – Gramsci and his
acolytes would describe the Mont Pelerin Society as a group of ‘organic
intellectuals’ performing the ‘everyday footwork’ of the ‘integral state.’ In
any case, this combination of material problems and ideology allowed
neoliberalism to take the reins.
A part of neoliberal globalisation I
wish to focus on first, since it encapsulates the entire system very well, is
the role of competitiveness, and the role of organisations that measure
competitiveness. Competitiveness is a nebulous term, but when used in the
context of international political economy it means that a whole country’s
economy is able to sell goods and services at at least the level of other
countries and their economies, while still improving living standards (as
opposed to the microeconomic usage, where competitiveness refers to firms).
Ngai-Ling Sum wrote in a journal about the usage of competitiveness as sort of
cudgel used to produce the desired – i.e. neoliberal - effect on countries (Sum, 2009). Assuming you have
some level of familiarity with her work, I will attempt to summarise. A group
of organic intellectuals – in this case graduates of the Harvard Business
School build on the work of Joseph Schumpeter and argue for the importance of
competitiveness on both a national and an international level. This knowledge
eventually filters through the integral state and becomes an accepted economic
measure. This happens first at the national level – “The Reagan administration
responded in 1983 by establishing the Commission on Industrial Competitiveness,
followed in 1988 by the Council on Competitiveness. Both bodies comprised
industrial, labor and academic leaders and placed national competitiveness at
the centre of national policy discourses and public consciousness.” (Sum, 2009) – then at the
international level – “the OECD intensified its engagement [with international
competitiveness] in the 1980s and 1990s, producing detailed policy data and
analyses on technology, productivity and economic growth (e.g., OECD 1991).” (Sum, 2009) The next stage is
analysed through a neo-Foucaldian lens, using his concept of the theoretical
panopticon. The literal panopticon was an idea developed by utilitarian
theorist Jeremy Bentham, where a prison would be in a circular shape, patrolled
by a single warden in the centre. Bentham supposed that since every prisoner
could see every other, and the guard, this constant surveillance would produce
much lower rates of bad behaviour in prison. Foucault took this idea in the
abstract and applied it to the neoliberal society he saw. When the World
Economic Forum releases its Global Competitiveness Report, every country
involved can see the positions not only of themselves, but of every other
country. Since they all know that world-renowned economists prize
competitiveness, because that view has filtered through Eastern Massachusetts
into the integral state, a low rating on the index is equivalent to bad
behaviour inside a prison, and so countries make sure they are improving in
order to avoid the disapproval or disciplinary action of other countries. The
end result is that a small part of Schumpeter’s economic theory has, over the
last forty years, become an organising principle that the leading economies of
the world are unable to ignore, because if they do, their world standing will
be decimated. Similar things happen across the neoliberal state, at all levels
of focus from the international to the personal, since all aspects of life tend
to end up economised, resulting in an ‘entrepreneurial self,’ a version of you
set up perfectly for economic competitiveness, at the expense of all else.
Consider university league tables – one has to go to a good university because
it makes one a better hire, and the intelligensia rank universities based on
these arbitrary criteria they consider desirable, and then I end up basing a
decision that affects my entire life on an aggregate ranking of “7th
in Economics” that sends me to Lancaster instead of York (who were 20th
or so when I was searching). Unfortunately, certain actions that make an
economy competitive (corporation tax cuts, for example) can have adverse
effects on the society that houses the economy (poorly funded public services),
and since we are political economists and the polity contains more than just
the financial sector, we can’t ignore these adverse effects, and this leads us
to Brexit.
The key development of the
neoliberal world order with regard to Brexit is the emphasis on free trade, of
which competitiveness is a part. Free trade has long been considered a key part
of a healthy world economy, and neoliberalism’s penchant for deregulation meant
that many barriers to trade have been lifted under its jurisdiction. This has
been achieved without the consent of, or desire from, the people, and their
displeasure can be seen a direct cause of the Brexit vote. Stephen Gill details
how neoliberal thought entrenched itself in the global economy (Gill, 1995). Firstly, the idea
of “market civilisation” is normalised through disciplinary neoliberalism. The
‘market gaze’, exemplified by the Global Competitive Process, works in the same
way as the panopticon, and makes sure every actor knows that refusing to buy
into market society has consequences. The second half of the plan is the more
complex, and Gill calls this ‘New Constitutionalism.’ Liberal democracy,
founded on the ideals of philosophers like Locke, de Tocqueville, Grotius, and
so on, is most concerned with the polity, and limiting the ability of our
lawmakers to impose decisions upon the polity. Gill would refer to this as
traditional constitutionalism - a strong constitution that is essentially
untouchable and entrenches the rights of the citizen above all else. New
Constitutionalism is essentially the opposite of that. It works by locking in
laws that favour neoliberal economics, and locking out the citizenry from
changing those laws. This is done by moving key economic decisions above the
level of the state, where there is universal suffrage and representative
democracy, and into the realm of transnational unelected organisations of
ex-investment bankers and other beneficiaries of lax economic policy, like the
WTO or the IMF, or even the EU (to a lesser extent, since it has elected
officials). When the WTO unilaterally decides that it is illegal to block
certain aspects of free trade, and every country has not only been conditioned
to see this as normal and good, but to shun countries that question this order,
these WTO laws essentially become part of a sort of global constitution –
heavily entrenched, integral to the constituent states and their institutions,
and it therefore becomes very undesirable to attempt to change this
arrangement. People living under such a system would be right question the
amount of sovereignty truly available to them and their government, and it
would be understandable for them to want to take back that control. However, a
country trying to exit the global constitution would be seen to be committing
political suicide as well as economic, and would be very unlikely to even
manage the feat without severely crippling its people.
Of course, Brexit is not solely a
protest of globalisation; you cannot overlook the role simple xenophobia might
have played in voters’ minds, for one thing, as well as a historical view of
Britain as a hegemonic power (which is another idea I will return to later), but
globalisation definitely plays its part. For one thing, in a world where free
trade is the default, economic competitiveness is lionised and it is therefore
necessary to exploit one’s comparative advantage, states must specialise; for
example, if it were discovered that, relative to all others, we were most
‘competitive’ at producing cider as a country, the skyscrapers would be
bulldozed for orchards, and the capital moved to Hereford, by the end of the
next quarter. Unfortunately, the United Kingdom specialises in financial
services (which has been more or less the case for over a hundred years, as I
will come back to later), which means the entire country is geared around the
requirements of an area in my hometown that measures 2.9km2.
Consider also those requirements; at least if we held the comparative advantage
in cider, apple-picking would not require a master’s degree. The level of quantitative facility a City
worker is likely to need in order to get their head around the numerous
different products and derivatives used by the big banks is disqualifying to me,
despite my studying economics (and politics) at what The All-Seeing University Index
believes to be a Top Ten university, simply because of my choice in module as a
19-year-old. This does not bode well for those not fortunate enough to attend
university at all, which is a large swathe of the population, and any chance to
retaliate against that square mile that the majority sense is likely to be
taken.
 |
| This was not in the essay I handed in, unfortunately |
I would like to quickly highlight
the work of Karl Polanyi,
who wrote about the concept of a “market society” fifty years before Gill, but
in a different context (Watson, Holmes, & Clift,
2014) (Keep, 2017). For Polanyi,
‘market society’ was a more accurate way to refer to capitalism, since it
better stated what he saw as an overemphasis on the market half of the phrase
and an underemphasis on society in economics. He thought divorcing economics
from its political and societal implications, to learn it in a vacuum, as it
essentially taught in universities, did everyone a disservice. He points to
examples from the Industrial Revolution, where despite objective increases in
things like GDP per capita and productivity and so forth, the vast majority of
people in Great Britain were not only utterly miserable, but significantly more
miserable than they had been before industrialisation. By bifurcating economics
and politics, your reaction is likely to be that the problem cannot be
economic, since GDP went up, that it must be something else, but Polanyi
suggests that the purely economic improvement cannot come without the societal
downsides. Brexit is a fantastic example of this dichotomy – neoliberalism
improves GDP at the societal cost of the 99.9%, but since the economics part of
the equation is “solved”, since Conservatives and Labour alike had embraced the
neoliberal orthodoxy, the problem had to be something else, like racism or
uneducatedness, and only those
things. Like I said earlier, as political economists, we must take into account
the polity as well as the economy, and Polanyi understands this. Intellectuals
that are baffled by phenomena like Brexit would do well to remember this idea.
All this evidence points towards
Brexit being an early part of a revolt against globalisation, among other
things. However, as I mentioned in the introduction, it may seem as though
globalisation has been on a slow inexorable march since the discovery of the
New World, but as Yoon young-kwan noted in the Japan Times, the process has
occured in waves (Young-Kwan, 2016). The pendulum has
swung between international trade and protectionism many times before, and
political theorist Robert Cox details a similar process over the course of the
late 19th century, centred on the dissolution of the pax Britannica, and he then compares
these events to the dissolution of the pax
Americana of the late 20th century. Cox uses neo-Gramscian
theory, a critical theory he developed from the writings of Gramsci, to explain
how the hegemony of the British was weakened, and how the same had occurred to
the US following the 1970s. Coxian hegemony is dependent on the relationship
between political power, institutions, and ideas. This shows the influence of
Gramsci, whose break with traditional Marxism was in the questioning of pure
materialism. Gramsci also considered the importance of ideas in shaping
society, just as Cox does in the global economy. In the mid-1800s, the British
were the most powerful naval state in the world (constituting political power),
and the ideas proselytised by economists and political philosophers like David
Ricardo, Edmund Burke, et al were carried out in the institutions of the City
of London, from the Inns of Court to the Bank of England. This power did not
properly wane until the Gilded Age raised the financial and military power of
America, and a wave of protectionist policy began to undermine the position of
the City. Cox notes that nostalgia for the pax
Britannica, maintained mostly by ideas, managed to keep British hegemony
alive long after Britain lost its primacy in terms of sea power, or as a
financial hub. Indeed, I see the post-WWI efforts to revive the gold standard,
or even the post-WWII efforts to maintain the Empire, as incredibly similar in
purpose to Brexiteers imploring Britons to “take back control.” The pax Americana takes over by explicitly
rejecting both the ideas and institutions of British economics by abandoning
the gold standard and implementing (ironically British) Keynesian solutions to
the problem of the Great Depression, and by exercising their military power
over the British by saving our [posteriors] in World War Two. Cox warns America
to not make the same mistakes as the British did following the First World War,
but he was writing in 1981, and the landscape was changing dramatically around
him. As touched on previously, the PWC was at this time in the process of
giving way to the (still American) neoliberal consensus, and we are at the end
of that period now. Just as Cox explains the British clung to the gold standard
and the balance of payments in the face of the Great Depression, I would point
to the Chicago School orthodoxy clinging to deregulation and austerity in the
face of the Great Recession as America’s potential downfall. America may begin
to lose its primacy to a Chinese nation that, strangely enough, maintains control
over its exchange rate (though not with gold, and these controls are loosening)
and runs on a trade surplus. Furthermore, just as discontent in Britain led to
a Labour landslide in 1945, discontent throughout the 2010s has led to Brexit,
a similarly shocking choice by the electorate.
I explain Cox’s work here not
simply because it gives further context for what I had written about the
post-war consensus, but because it proves that globalisation has been a concern
for many years and will continue to be. There are examples of other revolts
against globalisation, by the general public and elected officials, from more
recently than one hundred and fifty years ago, however very few have been as
drastic as Brexit is. Consider the Occupy Wall Street/Paternoster Square/etc
protests in the wake of the Global Financial Crisis; the “Battle Of Seattle”,
where 40,000 people protested a meeting of the WTO in 1999; though their remit
has never solely been anti-globalisation, “Right-wing populists like Pat
Buchanan in the United States, Jean-Marie Le Pen in France and Jörg Haider in
Austria had scored surprising near-victories, if not actual ones, in the late
1990s and early 2000s by focusing the working class's incipient ire on a
"foreign" enemy besides outsourcing: immigrants.” To that formidable
list I would add the British National Party, who, while now forgotten, once
represented a significant part of the nation’s delegation to the European and
controlled a good number of local councils.
From these points I would argue
that while Brexit definitely does not mark the start of an anti-globalist
movement - since that movement, in its anti-neoliberal form, has been going for
around twenty years - the United Kingdom leaving the European Union could have
significant repercussions for the neoliberal world order if it were to actually
occur,. If a country is able to break out of the New Constitution that Gill
describes, that may inspire other countries to try and do the same. One cannot
forget, however, that in Britain’s case, neoliberals are in charge of getting
Brexit done, and so the drastic change would be moving from the rules of the EU
to those doled out by the WTO, representing a backward slide in sovereignty.
Gill, S. (1995).
Globalisation, Market Civilisation, and Disciplinary Neoliberalism. Millenium,
399-423.
Jessop, B. (2018,
July 19). Neoliberalization, uneven development, and Brexit: further
reflections on the organic crisis of the British state and society. European
Planning Studies, 1728-1746.
Keep, L. (2017,
June 1). The Meridian Of Her Greatness. Retrieved December 9, 2019,
from Sam[]zdat: https://samzdat.com/2017/06/01/the-meridian-of-her-greatness/
Monbiot, G.
(2007, August 28). How the neoliberals stitched up the wealth of nations
for themselves. Retrieved December 8, 2019, from The Guardian:
https://www.theguardian.com/commentisfree/2007/aug/28/comment.businesscomment
O'Brien, M.
(2016, June 27). The Losers Have Revolted, And Brexit Is Only The
Beginning. Retrieved December 9, 2019, from Washington Post:
https://www.washingtonpost.com/news/wonk/wp/2016/06/27/the-losers-have-revolted-and-brexit-is-only-the-beginning/
Scott, R. E.
(2016, June 28). Brexit - The End Of Globalisation As We Know It?
Retrieved December 8, 2019, from Economic Policy Institute:
https://www.epi.org/blog/brexit-the-end-of-globalization-as-we-know-it/
Sum, N.-L.
(2009). The production of hegemonic policy discourses: 'competitiveness' as
a. Critical Policy Studies, 184 — 203.
Vaughan, K.
(2016, December 5). What the EA community can learn from the rise of the
neoliberals. Retrieved December 8, 2019, from Effective Altruism:
https://www.effectivealtruism.org/articles/ea-neoliberal/
Watson, M.,
Holmes, C., & Clift, B. (2014). Karl Polanyi, The Great Transformation
and a new political economy. Retrieved December 8, 2019, from Warwick
University: https://warwick.ac.uk/newsandevents/features/polanyi/
Young-Kwan, Y.
(2016, July 7). Brexit marks the start of an anti-globalisation era.
Retrieved December 9, 2019, from The Japan Times:
https://www.japantimes.co.jp/opinion/2016/07/07/commentary/world-commentary/brexit-marks-start-anti-globalization-era/#.Xe1bypP7TIW
[Accessed 8 Dec. 2019].
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