[FoRK] John Ralston Saul's "The End of Globalism"

Ian Andrew Bell (FoRK) fork at ianbell.com
Tue Mar 29 10:44:08 PST 2005


...a slap in the face at common wisdom and a symptom of things to come 
from U.S. administrations for the next 10 years.  I read this last year 
and as it was in Harper's there was no URL to point you all to.  It's 
an important benchmark in things to come.  Just think:  As the U.S. 
sits atop the throne of world power and no longer feels the need to be 
benevolent in the administration of global justice.. what will be the 
outcome?  Hypocrisy on a grand scale.

-Ian.


http://afr.com/articles/2004/02/19/1077072774981.html

The end of globalism
Feb 20 -  John Ralston Saul


  Grand economic theories rarely last more than a few decades. Some, if 
they are particularly in tune with technological or political events, 
may make it to half a century. Beyond that, little short of military 
force can keep them in place.

  The wild open-market theory that died in 1929 had a run of just over 
30 years. Communism, a complete melding of religious, economic and 
global theories, stretched to 70 years in Russia and 45 in central 
Europe, thanks precisely to the intensive use of military and police 
force. Keynesianism, if you add its flexible, muscular form during the 
Depression to its more rigid postwar version, lasted 45 years. Our own 
Globalisation, with its technocratic and technological determinism and 
market idolatry, had 30 years. And now it, too, is dead.

  Of course, grand ideologies rarely disappear overnight. Fashions, 
whether in clothes or food or economics, tend to peter out. Thousands 
of people have done well out of their belief in Globalisation, and 
their professional survival is dependent on our continued shared 
devotion to the cause. So is their personal sense of self-worth. They 
will be in positions of power for a few more years, and so they will 
make their case for a little longer. But the signs of decline are 
clear, and since 1995 those signs have multiplied, building on one 
another, turning a confused situation into a collapse.

  We have scarcely noticed this collapse, however, because Globalisation 
has been asserted by its believers to be inevitable - an all-powerful 
god; a holy trinity of burgeoning markets, unsleeping technology and 
borderless managers. Opposition or criticism has been treated as little 
more than romantic paganism. It was powerless before this surprisingly 
angry god, who would simply strike down with thunderbolts those who 
faltered and reward his heroes and champions with golden wreaths. If 
Globalisation has seemed so seductive to societies built upon Greek and 
Judeo-Christian mythologies, perhaps the reason is this bizarre 
confusing of salvation, fatalism and punishment. Transferred to 
economics, in however jumbled a manner, these belief systems are almost 
irresistible to us.

  The British and French empires had vaunted and defended their power in 
similar ways from the late 19th century on; that is, just as they began 
to collapse. And as the various 19th-century nationalisms declined into 
ugliness, their supporters increasingly transformed them into a matter 
of race.


  Inevitability is the traditional final justification for failing 
ideologies. Less traditional - and a sign of inherent weakness - is the 
extent to which Globalisation was conceived as old-fashioned 
religiosity. Perhaps the economists and other believers who launched 
Globalisation were instinctively concerned that people would notice 
their new theories were oddly similar to the trade theories of the 
mid-19th century or the unregulated market models that had been 
discredited in 1929. And so treating the intervening 40 years as an 
accidental interval, they began where their predecessors left off: with 
religious certainty.

  Despite that initial certainty, a growing vagueness now surrounds the 
original promise of Globalisation; we seem to have lost track of what 
was repeatedly declared 30 years ago, even 10 years ago, to be 
inevitable:

  That the power of the nation state was on its way out, to be replaced 
by that of global markets. That in the future, economics, not politics 
or arms, would determine the course of human events. That freed markets 
would quickly establish natural international balances, impervious to 
the old boom-and-bust cycles. That the growth in international trade, 
as a result of lowering barriers, would unleash an economic-social tide 
that would raise all ships, whether of our Western poor or of the 
developing world in general. That prosperous markets would turn 
dictatorships into democracies. That all of this would discourage 
irresponsible nationalism, racism and political violence. That global 
economics would produce stability through the creation of ever larger 
corporations impervious to bankruptcy. That these transnational 
corporations would provide a new kind of international leadership, free 
of local political prejudices.

  That the rise of global marketplace leadership and the decline of 
national politics, with its tendency to deform healthy economic 
processes, would force the emergence of debt-free governments. By then 
wedding our governments to a permanent state of deficit-free public 
accounting, our societies would be stabilised.

  In summary, global economic forces, if left unfettered by wilful man, 
would protect us against the errors of local self-pride, while allowing 
individual self-interest to lead each individual to a better life. 
Together these forces and self-interest would produce prosperity and 
general happiness. In a society where Christian dogma had been so 
dominant until so recently, how could people of goodwill not be 
attracted by this good news - by these promises of personal redemption? 
And if you add to all of this a multitude of new, technocratic market 
methods - well, then, the cycles of history would be broken, setting us 
on a permanent, inevitable course. In the words of a particularly naive 
believer, history would die. History was already dead.

  Globalisation materialised in the 1970s from the sort of geopolitical 
vacuum or fog that appears whenever a civilisation begins to change 
direction, to grope its way around a corner from one era to another.

  In geopolitics, a vacuum is not an option. It is the period between 
options; an opportunity, providing you can recognise it for what it is; 
a brief interregnum during which individuals can maximise their 
influence on the direction of their civilisation.

  What caused that particular void? Perhaps a quarter century of social 
reform had left the liberal elites exhausted. The need to manage a 
multitude of enormous new social programs that had been put in place in 
a democratic manner - an ad hoc manner - made it difficult for 
political leaders to concentrate on the main line; that is, to 
concentrate on a broad sense of the public good. Instead, governments 
were caught up in the endless and directionless details of management. 
Or perhaps the cause of the vacuum was the resulting reliance of those 
political elites on technocrats, who understood little of the debate - 
in fact, distrusted it - and so drew the leaders into isolation.

  In either case, most Western leaders seemed confused about what to do 
next. They had come to the end of a chapter of social progress. And 
they could not have been less prepared for a religious counterattack 
upon their ethical motivations, particularly not one in which the 
classic Judeo-Christian ideas of the sacred had been converted into 
economic inevitabilities.

  These theoretically new economic ideas were now scarcely recognisable 
as the simplistic economic arguments of pre-1929. The religious fervour 
had been blended with sparkling waves of new technology and with masses 
of microeconomic data, all presented as fact. Relaunched in this way, 
as three in one, one in three, the old ideas seemed new.

  Caught up as the liberal elites were in the instrumental rationality 
of program management, they responded to this attack with superior, 
stolid and unimaginative rejection. Instead of speaking out for the 
public good, they defended administrative structures. The effect was to 
make tired and discredited market arguments seem young, agile and 
modern.

  One comic sign of the coming era was the creation, in 1971, in a Swiss 
mountain village called Davos, of a club for European corporate 
leaders. There they could examine civilisation through the prism of 
business. Soon businessmen were coming from around the world. Then 
government leaders and academics flooded in, looking for investors. 
Business leaders, politicians and academics alike seemed to accept 
without question the core tenet of Davos: that the public good should 
be treated as a secondary outcome of trade and competition and 
self-interest.

  Davos was just a weather vane, a superficial and self-important 
version of a royal court, but when the G6 - now the G8 - was created in 
1975, its aim mimicked that of Davos: to bring the leaders of the 
biggest national economies together to examine the world through the 
prism of economics. Never before had the great nations so explicitly 
and single-mindedly organised their core relationship around naked, 
commercial self-interest, without the positive and negative 
counterweights of social standards, human rights, political systems, 
dynasties, formal religions and, at the negative extreme, supposed 
racial destinies. Valery Giscard d'Estaing, the French president who 
organised the first G6 meeting at his official country residence, 
Rambouillet, was the very model of the European technocratic economist. 
And his approach dominated.

  But what actually opened the door to Globalisation was the economic 
collapse of 1973 - the depression that never was. The reigning 
technocratic obsession with management and control meant that we all 
had to be reassured. So we were told that this was just another 
recession. Then there was another recession, then another, and on and 
on, always minimised, always about to be resolved. The social 
reformers, who dominated within almost all political parties and 
governments, denied themselves the right to stand back and deal with 
the situation as a whole. They had lost the intellectual breadth and 
the emotional balance to do this. And so they gradually lost the right 
to lead.

  As for the new force or ideology that came forward to fill the vacuum, 
it involved an all-inclusive strategy called Globalisation - an 
approach that contained the answer to every one of our problems. It was 
delightfully seductive. It contained simple, sweeping solutions and, as 
with all successful religions, lodged ultimate responsibility in 
invisible untouchable hands. Thus Globalisation required no one to take 
responsibility for anything.

  This transcendent vision quickly filled the vacuum. I first heard the 
variety of personal passivity produced by this belief system on French 
national television in a speech by Giscard d'Estaing. He had been 
elected as a new-style political leader - a brilliant economist. 
Modern. Almost postmodern. He was to lead society via the economy. But 
he came in just after the 1973 collapse, which included high inflation 
and unemployment. After a year or so of struggling with the collapse, 
Giscard went on television to tell people that great global, indeed 
inevitable, forces were at work. There was therefore little that he 
could do. Nation states were powerless.

  This was the beginning of the mania for public declarations of 
impotence by democratically elected leaders. Globalisation became their 
excuse for not dealing with difficult issues, for not using their 
levers of power and larger budgets to effect. They made the force of 
inevitability credible.

  Globalisation had brilliant proponents - Margaret Thatcher first among 
them, and economists like Milton Friedman, but also growing waves of 
new-style managers and consultants. These people had a multiplicity of 
roles. They briefed public and private sector leaders, organised the 
structures that implement policies, and ran these structures on a 
day-to-day basis. And their basic theory was - is - that modern 
methodology is universal. What's more, these methods are preferable to 
the untidy business of democratic argument and personal will, whether 
that is a matter of personal opinion or personal choice. In other 
words, they were engaged in the classic struggle to promote method over 
opinion; that is, form over content.

  And so, as always happens when form is dominant, a variety of 
experiments were undertaken. Around the world, civil services were 
shrunk, public and private sectors deregulated, markets released, taxes 
cut, public budgets balanced. Corporations began growing in size by 
merging and remerging. This gigantism was considered necessary for 
success in the new world market. Trade grew by an astonishing multiple 
of 20. European economic integration accelerated. New Zealand, the 
original social democratic model state, did a complete flip in the 
mid-1980s and attempted to become the perfect Globalised nation state. 
The economies of Canada and the US were rapidly integrated after the 
signing of a free trade agreement in 1988, to which the integration of 
the Mexican economy was added with the signing of NAFTA.

  Social reformers, for their part, restructured their own arguments 
until their basic assumptions were the same as those of their 
opponents. Social democrats and liberals almost everywhere became 
Globalists, but of a kindler, gentler sort.

  Government after government, as if in a fit of moralism, legislated 
away its right to take on debt or collect new taxes, even though both 
of these were fundamental governmental powers, central to the 
construction and maintenance of democracies. In fact, debt and taxes 
had played the same fundamental role in the pre-democratic period. At 
the same time, the private sector invented myriad new debts and 
privatised taxes for itself. Everything from junk bonds to credit cards 
was treated as an unregulated privatised currency. And corporations 
used the old default mechanism more than ever to clear their own decks 
whenever it was handy to do so.

  The sin of public debt was then broadened by attributing it to public 
utilities. Running well or not, they had to be privatised and 
deregulated into a global marketplace to cleanse them of public sector 
inefficiencies. This led in turn to the large utility-style private 
businesses, such as airlines, being freed of regulatory restraints to 
satisfy a moral version of individualism that promised, for example, 
the right to travel, cheaper fares, greater choice, more destinations.

  From the early 1970s to late in the century, multiple binding 
international economic treaties were put in place, while almost no 
counterbalancing binding treaties were negotiated for work conditions, 
taxation, the environment or legal obligations. For 250 years the 
painful job of building the modern nation state had depended on a 
continual rebalancing of binding rules for both the public good and 
self-interest.

  Now this balance was tipped violently one way by simply shifting much 
of our economic power out into the global marketplace.

  With economic power denationalised and transnationals using the new 
unregulated debt and currency systems to accumulate a financial worth 
greater than that of most nation states, the next logical step was to 
think of those transnationals as new nations unto themselves - virtual 
nations, freed of the limitations of geography and citizens, freed of 
local obligations, empowered with the mobility of money and goods. 
Better in every way.

  This quarter-century rise of Globalisation peaked in 1995 when the old 
system of international trade agreements - known collectively as the 
General Agreement on Tariffs and Trade - was reconceived as a new 
powerful body, the World Trade Organisation. It was the last triumph. 
There was nothing remarkable about the creation of the WTO. It was just 
a centralised body to deal with commercial trade issues - not a bad 
thing in and of itself. The important point was the context. The 
reconceptualisation of civilisation through the prism of economics had 
reached a critical barrier. Beyond that barrier any international 
exchange that involved a commercial element would be treated as 
fundamentally commercial. Culture would be seen as a mere matter of 
industrial regulation; food, as a secondary outcome of agricultural 
industries.

  What particularly caught public attention around the world was the 
idea that national health and food rules would be treated not as the 
expression of a people concerned about what sorts of things it put in 
its collective stomach but rather as mere protectionism - unless backed 
by the hardest of hard scientific evidence. That sort of evidence was 
usually decades in coming. The precautionary principle and the 
citizen's opinion were thus to be thrown aside in favour of an 
absolutist theory of commercial exchange.

  This determinist approach towards agriculture as an industry rather 
than as a food source - towards the implications of everything from 
fertilisers, herbicides and insecticides to genetics, hormones, 
antibiotics, labelling and sourcing - became the flash point for a far 
broader concern among citizens. This was the context in which a growing 
percentage of people judged the handling of key issues as different as 
mad cow disease, the availability of pharmaceuticals in the developing 
world and global warming. They were beginning to feel that what was 
presented as an argument of Globalism versus protectionism was often 
just a confused opposition of personal choice and abstract corporate 
interests. So Globalisation, put forward as a metaphor for choice, was 
organising itself around not consumers but corporate structures, 
structures that sought profits by limiting personal choice.

  Soon people began to notice other contradictions in the Global 
orthodoxy. How could the same ideology promise a planetary growth in 
democracy and yet a decline in the power of the nation state? Democracy 
exists only inside countries. Weaken the nation state and you weaken 
democracy.

  Why did an unprecedented increase in money supply translate into a 
dearth of money for public services? And why did this growth in new 
moneys enrich mainly those who already had money? Why did it lead to a 
growth in the rich-versus-poor dichotomy and a squeezing of the middle 
class? Why did many privatisations of public utilities neither improve 
services nor lower costs for consumers but instead guarantee revenues 
to the new owners while leading to a collapse in infrastructure 
investment?

  People noticed that the financial value of the great breakthroughs in 
female employment had somehow been inflated away. Abruptly, a middle 
class family required two incomes. They noticed that in a mere 25 years 
CEO salaries in the US had gone from 39 times the pay of an average 
worker to more than 1000 times. Elsewhere the numbers were similar.

  And the savings from the cuts in civil servants were more than offset 
by the cost of new lobbyists and consultants.

  There were three particularly obvious signs that Globalisation would 
not deliver on its promises. First, the leadership of a movement 
devoted to "real competition" was made up largely of tenured 
professors, consultants, and technocrats - private-sector bureaucrats - 
managing large joint-stock companies. Most of the changes they sought 
were aimed at reducing competition.

  Second, the idea of transnationals as new virtual nation states missed 
the obvious. Natural resources are fixed in place, inside nation 
states. And consumers live on real land in real places. These are 
called countries. The managers and professors who waxed enthusiastic 
about the new virtual corporate nations were themselves resident 
citizens and consumers in old-fashioned nation states. It would be only 
a matter of time before elected leaders noticed that their governments 
were far stronger than the large corporations.

  Finally, the new approach to debt - public versus private, First World 
versus Third World - revealed a fatal confusion. Those who preached 
Globalisation couldn't tell the difference between ethics and morality. 
Ethics is the measurement of the public good. Morality is the weapon of 
religious and social righteousness. Political and economic ideologies 
often decline into religious-style morality towards the end. But 
Globalisation had shoved ethics to the side from the beginning and 
insisted upon a curious sort of moral righteousness that included 
maximum trade, unrestrained self-interest and governments alone 
respecting their debts. These notions were curiously paired with 
something often called family values, as well as an Old Testament view 
of good and evil.

  It somehow followed that if countries were in financial trouble, they 
were moral transgressors. They had to discipline themselves. Wear hair 
shirts. Embrace denial and fasting.

  This was the crucifixion theory of economics: you had to be killed 
economically and socially in order to be reborn clean and healthy. For 
a quarter century, under the severe hand of the IMF, this moralising 
and emotionally charged approach has been applied to the developing 
world with absolutely no success. Oddly enough, it had been presented 
as a form of cool, detached utilitarianism. Those who applied the 
theory seemed to fail the basic philosophical test of functioning 
intelligence and ethics - the ability to imagine the Other. They simply 
insisted, as developing-world debts continued to rise on a 
rollercoaster of instability, that those people must learn to act in a 
more predictable manner.

  Which brings to mind rather aged priests insisting that young men 
should take cold showers and exercise more.

  By the turn of the century, it had become clear that nationalism and 
the nation states were stronger than they had been when Globalisation 
began. Indeed, this was apparent as early as 1991, when the Yugoslavian 
army tried to stop Slovenia and Croatia from leaving their federation. 
The ensuing massacre was a test for almost every international 
organisation. All of them failed. As if in a black comedy, 
international elites chattered away about how global economic forces 
made nation states irrelevant, while thousands of real people were 
being murdered and cleansed to facilitate the creation of yet more 
nation states. The resulting horror shocked the Europeans into the 
realisation that their economic and administrative union was helpless 
in a political-military disaster.

  Eventually Washington brokered the Dayton peace accords. But Dayton 
accepted the model of the local nationalist war criminals. Jews in 
Bosnia don't exist as citizens unless they pretend to belong to one of 
the three official races. Neither do people of mixed blood. Dayton is 
all about racially based nations - the most appalling aspect of 
nationalism, but nationalism nonetheless. And so Globalisation's 
triumph, with the creation of the WTO in 1995, was paired with its 
humiliation at the Dayton signing in the same year.

  In a depressing game of leapfrog, the Yugoslavian settlement competed 
with a genocide in Rwanda, where half a million to a million people 
were murdered. This is a remarkable statistic.

  In a global world of economic and social measurement, we are bombarded 
daily by apparently exact statistics measuring growth, efficiency, 
production, reproduction, sales, currency fluctuations, comparative 
levels of obesity and orgasms, divorce, salaries and incomes. Yet we 
don't know, or don't care to know, whether it was a million or half a 
million Rwandans who were massacred. And the genocide was facilitated 
by Paris and Washington, using old-fashioned nation-state powers at the 
UN security council to block a serious international intervention. The 
Rwanda catastrophe then morphed into the Congo catastrophe, involving 
4.7 million deaths between 1998 and 2003. Or was it 3 million? Or 5.5 
million?

  The point is that the inevitability of global economic leadership has 
been irrelevant through all these crises. While the true believers 
speak of Globalisation, we are in fact in the middle of an accelerated 
political meltdown marked by astonishing levels of nationalist 
violence.

  Observant national leaders couldn't help but notice that the theories 
of Globalisation were failing them. The most public of these failures 
was the breakdown of international lending and debt mechanisms. For a 
short period it looked as if the IMF's punishing approach might 
actually work. For a dozen years most Latin American governments tried 
to follow instructions laid down by the IMF, Western governments and 
the private banks. They endured crucifixion economics, and in many 
cases this eventually produced apparently solid growth, even if the 
parallel result was a greater rich/poor gap. But in each case the 
recovery was followed, a few years later, by even greater collapse. It 
turned out that such prolonged austerity had weakened, not 
strengthened, the social-economic fabric. So after all of the 
liberalisations, privatisations and inflation-stabilisation programs, 
growth in Latin America in the late 1990s was a little over half what 
it had been before the reforms.

  True believers will tell you that it could have worked, if only there 
had been less nepotism, weaker unions or less corruption. But real 
economic policies in the real world don't require perfect conditions. 
Perfect conditions don't exist in the real world. Western growth over 
two centuries has come in spite of our own shifting flaws.

  Peru and Bolivia are on a precipice. Argentina is picking itself up 
yet again, while its educated youth emigrate en masse. Now, like 
Brazil, it is going to try something it believes more suitable to its 
circumstances. Only Chile seems solid, and that is because, since the 
departure of Pinochet, it has carefully designed its own solutions.

  In other words, Latin America no longer believes in Globalisation. 
Neither does Africa. Nor does a good part of Asia. Globalisation is no 
longer global. Indeed, most Western finance ministers have been quietly 
working for some time on partial reregulation of the markets. Why 
quietly? To avoid the ferocity of the true believers.

  In 1998 the governor of the Reserve Bank of Australia, Ian Macfarlane, 
began calling for reregulation. "More people are asking whether the 
international financial system as it has operated for most of the 
nineties is basically unstable. By now, I think the majority of 
observers have come to the conclusion that it is, and that some changes 
have to be made."

  In the same year a combination of street demonstrators and distrustful 
ministers of finance from around the developed world killed the 
Multilateral Agreement on Investment negotiations, which had been aimed 
at a further Globalisation of finance and investment. They rejected the 
idea of yet more business-oriented binding treaties, with no binding 
political or social counterweights.

  At almost the same time, Malaysia responded to an economic meltdown in 
Asia by refusing to follow the Global rules. The government pulled its 
currency off the market, made it nonconvertible, pegged it just low 
enough to favour exports, blocked the export of foreign capital and 
raised tariffs. These measures were met by an explosion of Western 
moral fervour. Malaysia could not do this. Its economy would not 
survive. The leading international emerging-markets index expelled 
them. Then everyone averted their eyes from the inevitable collapse. In 
1999, a short year later, that same index sheepishly readmitted 
Malaysia. Smarter merchant bankers began to praise the possible 
long-term investment advantages of pegging certain currencies in 
certain conditions.

  By then the World Bank, under new leadership, had begun to soften its 
monolithic Global view, even if the IMF has been extremely slow to 
accept reality and follow. Late in the year the WTO was humiliated in 
Seattle by unprecedented demonstrations.

  By the end of the century it was not only national leaders who were 
beginning to take a more nuanced view of Globalisation's capitalist 
credentials.

  A growing number of people, including the brighter business leaders, 
were focusing on where deregulation had worked and where it hadn't.

  The airline industry, for example, had been growing since World War 
II. The calls for deregulation in the mid-1970s came from a successful, 
profitable growth sector, which continued to grow until September 11, 
2001. Even then, the drop was only 5.7 per cent, which, given 60 years 
of solid growth, should not have been a catastrophe. Yet it was. In any 
case, those corporations that had called for deregulation a quarter 
century before had pretty well all gone bankrupt, one by one over the 
intervening years. The whole industry is now dependent on cut-rate 
airlines. So a sector that provides essential services is being run on 
dubious margins and institutional instability.

  Why? Because of devotion to a simplistic, monolithic model of Global 
market forces. But a large aircraft is not a telephone or a pair of 
running shoes. Planes that cost hundreds of millions of dollars have to 
be paid for with $100 airfares - a daunting business model. The secret 
to the industry's pre-1973 success was its stability - produced by 
carefully maintained, long-term public regulations.

  As for the romance of gigantism - of corporate size as a criterion for 
industrial success - it was beginning to look pretty silly. Endless 
mergers had led to high levels of unserviceable debt and bankruptcy. It 
was as if size had replaced thought. As if it were a male thing.

  It was all beginning to resemble the 17th- and 18th-century 
speculation markets - the South Sea Bubble, John Law and the French 
regency, the Dutch tulip-bulb frenzy. The larger the corporations grew, 
the slower and more directionless they became - enormous management 
structures frightened of serious investment and risk. They resembled 
out-of-control bureaucracies. Yet the whole argument in favour of 
Globalisation had been the apparently desperate need to wrench power 
from the bureaucracies and place it firmly in the hands of real owners 
capable of taking real risks.

  More perhaps than the genocides, the disorder in the streets, or the 
debt crises, it was those simple recurring images of corporate 
ineptitude, combined with an absence of self-criticism, that first made 
clear the decline of Globalisation. How then could any of us seriously 
believe that our redemption lay in the reconceptualisation of 
civilisation so that we could all view it through the prism of business 
and economics?

  The larger the corporations became, the more deregulation released 
them to be themselves, the faster they slipped out of sync with their 
civilisation and even with their customers and shareholders.

  Of course most people in business were working away as best they 
could, more or less as they always had, whatever the ideology in place. 
The people who stumbled badly seemed to be the insistent stars of the 
new-world methodology. And so, in full public view, the value of the 
fabled merger of AOL and TimeWarner slipped rapidly from $US284 billion 
to $US61 billion. And GE's Jack Welch, a model new leader, began 
stumbling towards every last penny on the floor like a greedy little 
boy. Arthur Andersen demonstrated that accountants can act as badly as 
anyone else. Hollinger, whose newspapers on four continents had 
trumpeted Globalisation, fell under multiple financial and legal 
investigations, as did Parmalat, the great Italian success story. And 
so on.

  Ideology, like theatre, is dependent on the willing suspension of 
disbelief. At the core of every ideology lies the worship of a bright 
new future, with only failure in the immediate past. But once the 
suspension goes, willingness converts into suspicion - the suspicion of 
the betrayed. Our brilliant leaders abruptly appear naive, even 
ridiculous.

  And so, in the late 1990s, our disbelief came back, and with it our 
memory. The years between 1945 and 1973 no longer seemed such a 
failure. In fact, it had been one of the most successful eras in 
history for both social reform and economic growth. It was something to 
build on, to reform; not something to dismiss.

  The first clear hint of the end of the reigning ideology came with 
Malaysia's successful rejection of the Globalisation model. We, in our 
fervour, saw their crisis as one of economics, and therefore subject to 
the rules of inevitability. The Malaysians saw it as a national 
political crisis with economic implications. And so they acted 
politically and nationally, and were proved right. Abruptly it seemed 
possible that nation states were not dying. And that economic certainty 
was naive.

  Then, in late 1999, came the general election in New Zealand. Fifteen 
years earlier this small country had become the model for 
Globalisation. Now, overnight, its electors voted to change direction, 
endorsing a strong interventionist government devoted to a mix of 
national social policies, enforceable economic regulations and a stable 
private sector. Why? Its national industries had been sold off, its 
economy was in decline and its standard of living had been stagnant for 
all 15 years of its Globalisation experiment. Its young were emigrating 
at alarming rates. This, the citizens now said, was not inevitable. If 
a small country could flex its muscles, well, then, the nation state 
was truly alive.

  Then came the explosions of September 11, 2001. In the following days, 
the world economy began plummeting into a depression. Corporate leaders 
hunkered down to their businesses, forgot about world leadership and, 
with a classic desire to reduce risk, slashed their investment 
programs, thus accelerating society's economic plunge.

  As for the political leaders, ministers of finance, chairs of reserve 
and national banks - the constituted elites of the nation states - they 
rolled into action. They travelled and talked, printed money and spent 
vast amounts of it. And they managed to stabilise the situation. In 
other words, there was a brutal, highly public and existential reversal 
of roles. The governments of the nation states took back their full 
power both to act and to lead. The CEOs retreated back into their 
historic reactive role.

  Once belief is gone, the churches begin to empty. You could see this 
accelerating disbelief in bankruptcy court in December 2001, when, as 
if in the last scene of an old-fashioned bedroom farce, the 
"inevitability" of Global corporate leadership came face to face with 
Enron, filing for government protection from its private debts.

  You saw it again in the opening session of the frivolous court of 
Davos. This was where, 33 years before, the theology of Globalisation 
had been first put forward, all based on the assumption that 
civilisation must be approached through a single, monolithic economic 
prism. Yet here they were on their opening day in January 2003 feting 
Mahathir Mohamad, then prime minister of Malaysia, for his country's 
economic success. It was clear to everyone that this success had come 
from political leadership at the nation-state level and that it was 
based on the rejection of Globalist economics. A few days later, Luiz 
Inacio Lula da Silva, the new president of Brazil, arrived in the Swiss 
village to lay out an independent, straightforward version of 
responsible nation-state populism.

  What all of this meant became perfectly clear when US secretary of 
state Colin Powell arrived to speak for the country that had achieved 
more national power than any other in history. Insofar as a possible 
war with Iraq was concerned, he declared, "we will act even if others 
are not prepared to join us". So the US would act unilaterally - that 
is, nationally.

  Thus, in a single week, inside the emotional and mythological home of 
Globalisation, three very different pivotal governments turned their 
backs on Globalisation and acted as if the nation state were the 
central international reality.

  The war that followed in Iraq quite intentionally put an effective end 
to the half-century-old Western alliance produced by World War II. 
Washington had chosen in January 2003 not to take the time to put 
together the traditional Western battlefield coalition. The effect was 
to free a cast of nations to rethink their relationships. This was as 
true for the old NATO players as it was for the smaller, newly free, 
central European states, which were able to flex their nation-state 
muscles by joining in. Some of them had never had such an opportunity. 
For others it was the first time since the 1930s.

  Throughout the world, nations began moving about like semi-free 
agents. Organisations such as NATO are still solid. There is no desire 
to storm out. But everyone is checking around to see if there are other 
ways they might like to act. And with whom.

  What this might mean remains painfully unclear. Here we are, rushing 
around one of those sharp corners with no idea of where we are going. 
Perhaps back to the worst of old-style negative nationalism. Or perhaps 
on towards a more complex and interesting form of positive nationalism, 
based on the public good.

  What is certain is that nationalism of the best and the worst sort has 
made a remarkable, unexpected recovery. We don't yet know whether it 
will become the new dominant ideology. What we do know is that there 
has been a return across Europe of 19th-century-style negative 
nationalism. Although usually the product of fear, it reappeared in 
countries that had nothing to fear: Jorg Haider in Austria speaking out 
against immigrants, while echoing race and monolithic national myths. 
Italy governed by three nationalists, one of them the leader of 
Mussolini's old party. Related phenomena in Belgium, Denmark, France, 
the Netherlands, Norway, Switzerland. A sudden revival of sectarian 
nationalism in Northern Ireland. The defeat of a compromise in Corsica. 
Everywhere these nationalists are now in coalition governments or are 
leading oppositions.

  Many mainstream parties have trimmed their sails to capture some of 
this nationalist vote. Non-European immigrants, who rarely account for 
more than 5 per cent of a country's population, have become the focus 
for a sense of political and social impotence, produced in part by a 
quarter century of continental and Global inevitabilities. Today's 
growing fear of Muslims is parallelled by a return of anti-Semitism. 
The last Australian election was won by provoking a fear of immigrants.

  The new president of the Czech Republic is thought to be an 
old-fashioned nationalist, as is the governor of Tokyo. Because the US 
is so powerful, people say its actions are all about empire. But 
empires are mere extensions of nationalism. They are not a phenomenon 
of either Globalisation or internationalism.

  At the same time, positive forms of nationalism have surged forward, 
with countries like South Africa and Brazil taking on the 
pharmaceutical transnationals over the availability of drugs to fight 
epidemics such as AIDS. And these nations have been winning. A 
reasonable number of noneconomic and internationally binding treaties 
based on the primacy of ethics and the public good have begun to take 
form: the Ottawa treaty against land mines, the International Criminal 
Court, the Kyoto accord against global warming. They represent the 
beginnings of an attempt at an international balance in which the prism 
of civilisation is neither naive market economics nor national 
selfishness.

  The return of the idea of national power has also meant the return of 
the idea of choice - choice for citizens and choice for countries. But 
with choice comes uncertainty, which provokes fear. The moment we 
entered the post-Globalisation vacuum, you could feel that fear begin 
to rise. And curiously enough, the greater a nation's power, the more 
intense the fear becomes. Perhaps power produces an expectation of 
certainty. Perhaps smaller countries find a certain freedom in 
uncertainty - the freedom to choose without being bullied. Necessity, 
Pitt the Younger said, is the excuse of every tyranny. For most smaller 
countries, Globalisation has felt like an inevitability and, so, like a 
tyranny.

  History will eventually give all of these contradictory signals a 
shape. But history is neither for nor against.

  It just is. And there is no such thing as a prolonged vacuum in 
geopolitics.

  It is always filled. This is what happens every few decades. The world 
turns, shifts, takes a new tack, or retries an old one. Civilisation 
rushes around one of those blind corners filled with uncertainties.

  Then, abruptly, the opportunities present themselves to those who move 
with skill and commitment.

  John Ralston Saul is the author of Voltaire's Bastards: The 
Dictatorship of Reason in the West, Unconscious Civilisation and, most 
recently,  On Equilibrium: The Six Qualities of the New Humanism. ©2004 
Harper's Magazine. Distributed by Tribune Media Services International.


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