rodrik206_In Pictures Ltd.Corbis via Getty Images_trade In Pictures Ltd./Corbis via Getty Images

What’s Next for Globalization?

With hyper-globalization in decline, the world has an opportunity to right the wrongs of neoliberalism and build an international order based on a vision of shared prosperity. But to do so, we must prevent the national-security establishments of the world’s major powers from hijacking the narrative.

CAMBRIDGE – The narrative that underpins the current global economic system is in the midst of a transformative plot twist. Since the end of World War II, the so-called liberal international order has been premised on the free flow of goods, capital, and finance, but this arrangement now seems increasingly anachronistic.

Every market order is supported by narratives – stories we tell ourselves about how the system works. This is especially true for the global economy, because, unlike individual countries, the world has no central government acting as rule-maker and enforcer. Taken together, these narratives help create and sustain the norms that keep the system running in an orderly fashion, telling governments what they should and should not do. And, when internalized, these norms undergird global markets in ways that international laws, trade treaties, and multilateral institutions cannot.

Global narratives have shifted numerous times throughout history. Under the late-nineteenth-century gold standard, the global economy was viewed as a self-adjusting, self-equilibrating system in which stability was best achieved when governments did not interfere. Free capital movement, free trade, and sound macroeconomic policies, the thinking went, would achieve the best results for the world economy and individual countries alike.

To continue reading, register now.

Subscribe now for unlimited access to everything PS has to offer.


As a registered user, you can enjoy more PS content every month – for free.