March 15, 2006
Critical public choices and extended political struggles will determine whether, in what ways, and how far a new course of globalization will shape in the coming years, according to Jan Aart Scholte, Professor in Politics and International Studies, and currently Co-Director of the ESRC/Warwick Centre for the Study of Globalisation and Regionalisation. In a recently published article by the United Nations Research Institute for Social Development (UNRISD) - â€˜The Sources of Neoliberal Globalization' – Prof. Scholte reflects on the future of neoliberalism, while examining what sustains it. Following are extracts from that article.
Concerns about adverse consequences of neoliberalism, together with pressure from protest movements, have in recent years provoked considerable discussion about changes of policy toward globalization. Already a number of reforms have attenuated the ultra-liberal marketism that prevailed in the 1980s and the first half of the 1990s. As of late 2002, it remained far from clear how deep these revisions would go. However, the relative modesty of policy alterations to that date suggested that neoliberalism would retain general primacy in our (mis)management of globalization. No full-scale shift of approach is in immediate prospect.
Most changes of the last five years regarding the regulation of globalization have fallen in the mould of what has been called the post–Washington consensus or, as Rodrik (2001:15) has more aptly described it, the "augmented Washington consensus". In this vein, globalization-by-marketization has been pursued with greater attention to institutional contexts and social consequences. Even an arch-neoliberal like Milton Friedman has conceded that his earlier call to "privatize, privatize, privatize" needs a supplementary injunction to couch the market in solid institutional arrangements (Friedman 1991). Privatization, liberalization and deregulation remain the order of the day, but these core neoliberal policies are now undertaken in tandem with more measures that address corruption, transparency, financial codes and standards, unsustainable debt burdens, the timing and sequencing of capital control removal, social safety nets, poverty reduction, corporate citizenship and so on. Recent trends have also seen some technocrats reduce their earlier inclinations to take a one-size-fits-all approach to the application of neoliberal policies and to give greater attention to the diversity of cultural, economic and political contexts.
However, "Washington Plus" has still had neoliberalism at its core. Thus, anti-corruption drives, information disclosure schemes, and other so-called good governance measures have had the primary aim to improve market efficiency. The Poverty Reduction Strategy Papers spearheaded by the Bretton Woods institutions since 1999 have continued to centre on marketization through privatization, liberalization and deregulation. Concerns about "moral hazard" in the marketplace have severely constrained creditors from extending more substantial debt relief to poor countries than a handful of bilateral cancellations and the grudging heavily indebted poor countries (HIPC) initiative on loan repayments to the IMF and the World Bank. Capital account liberalization remains a key macroeconomic policy objective, even if it is approached with greater caution. Corporate citizenship is an exercise in market self-regulation and often has the aimâ€”implicitly if not explicitly of pre-empting greater public sector interventions to secure social and environmental standards in business behaviour. The second generation neoliberal framework has more or less ignored issues of social inequality, ecological integrity, cultural protection and democracy. In all of these respects there has been limited "post" in the post–Washington consensus.
True, certain ideas recently promoted in some policy circles have implied a more substantial reorientation away from neoliberalism in the direction of redistributive global social democracy. Discussion of global public goods funded through global taxes has fallen into this vein, as has talk of creating an Economic and Social Security Council at the UN. A vision of global social democracy has also underpinned notions of "decent work" developed at the ILO, conceptions of a "rights-based approach to development" pursued at the United Nations Development Programme (UNDP) and elsewhere, and ideas of a new "global social contract". However, to date this reformist discourse has not translated beyond words into significant concrete rules and regulatory mechanisms to govern the global economy. Indeed, neoliberal regimes have shown considerable adeptness in co-opting reformist themes and draining them of their force for significant change. This fate has already largely befallen notions such as sustainable development, social capital, ownership and participation.
Dissatisfaction with the harms and omissions of neoliberalism has also of late generated greater interest in transformist approaches to globalization. For example, radical socialists have seen the contradictions of neoliberalism as an