Grigory Bazhenov/Trilemma of globalization
In 2011, Dani Rodrik wrote the book The Paradox of Globalization. Democracy and the Future of the World Economy”[1], where he formulates, by analogy with the trilemma of international finance, the trilemma of globalization. What is the point?
In short, our world is heterogeneous. There are developed countries, there are developing countries, and there are also those that cannot be said to have gone far from the level that was observed in the world in the era before the industrial revolution. At the same time, the idea that democracy, globalization and sovereign economic policy is, in general, good and right, has become established as a more or less universal maxim. However, in order to combine all three maxims in the conditions of such heterogeneity, there are serious problems.
Let's understand the concepts.
1) Hyperglobalization is a situation where there are no barriers to the movement of goods, capital and people. In addition to economic barriers, there are also no political or cultural barriers.
2) Democracy in nation-states - the realization of personal freedoms of citizens and ensuring political equality.
3) National Sovereignty - Each national government can pursue the policy of its choice without any significant restrictions imposed on it by other countries or global institutions.
The trilemma is that all three maxims cannot be combined at the same time. In any case, in an unevenly developed world. Let's look at the various options (figure).
Preservation of sovereignty and democracy. The electorate demands respect for labor rights and environmental standards, as well as an effective stabilizing policy. To ensure all this, the national government will have to impose restrictions on the movement of labor and capital, which puts an end to globalization in extremis.
Implementation of hyperglobalization while maintaining sovereignty. The technocracy pursues a policy that allows the maximum opening of borders to goods, capital and labor, but does not match the expectations of voters (decrease in economic security and increase in social risks).
Democracy in the context of hyperglobalization. Unification of labor standards, standards of environmental protection, technological standards and safety standards (in accordance with the standards of advanced countries) while maintaining democratic procedures, but leveling sovereign policy (a kind of global federalism).
Perhaps we can give examples of each of the three cases. The United States falls well under the first: the presence of restrictions on the movement of capital, labor and goods, sovereign economic policy and democracy. The second case is Russia (naturally until February 22nd), quite a technocracy with high integration into the world economy, but without this democracy of yours. Well, the third is the EU, which is actively following the path of unifying standards and open borders, increasing the role of centralized bodies and its bureaucracy (EC, ECB, EP, etc.) and reducing the sovereignty of countries in terms of economic and social policy (problems of the Eurozone from here, wrote about it here [2]).
It is clear that there are plenty of intermediate options, and the parameters indicated by Rodrik are about ideal types. Nevertheless, it seems to me that in relation to the same gas trade, this concept shows well why today there are serious contradictions between the European bureaucrats (who are in favor of the energy diversification strategy and the rejection of Russian oil and gas) and a number of EU countries (which are in favor of stipulating in sanctions exceptions, and in general we would have to decide on trade with the Russian Federation). In fact, the 2008 crisis showed us a similar story.
In general, the difficulties on the path of global peace are demonstrated to us by the EU. However, this does not mean at all that quite acceptable intermediate options are impossible. Possible and how. But more about that some other time.
Grigory Bazhenov 2022-10-09
