A New Balance for the Global Age
The rise of populist, protectionist, and nationalist movements in recent years should not have come as a surprise, given the notable failures of free-market fundamentalism in the age of globalization. The danger now, however, is that without a new economic paradigm, the gains of globalization will be lost, while its ravages will continue.
LONDON – Protectionist and “bring-back-control” movements will continue to flourish so long as globalization remains leaderless, lacks a human face, and advances like a runaway train careening out of control.
Sadly, there are good reasons why globalization has become a dirty word for millions of people. The pillars of the 30-year-old Washington Consensus have been collapsing. Most now agree that free trade without fair trade creates millions of losers, in addition to some winners. Unregulated capital flows, especially short-term speculative flows, can destabilize economies. And rising social inequalities can be bad for growth.
These realizations are punching holes in the free-market fundamentalism – focused on liberalization, deregulation, privatization, tax-cutting, and the shrinking of the state – that has prevailed in policymaking circles over the last few decades. Ten years after the global financial crisis, we can now accept that individuals and corporations acting solely in their own self-interest do not always serve that of the public.