As the world continues to experience the most severe financial crisis since the Great Depression of the 1930s, new and multiple forms of geo-economic and geo-political power, and unprecedented aftershocks in the Euro zone and complex global transformations, Dani Rodrik’s intervention could not have been better timed. The book’s strength lies in the innovative ways it challenges prevalent debates on the content and implications of the intellectual consensus that sustains our current model of globalization. The book is a logical part of Rodrik’s progressive reflection on globalization,1Dani Rodrik, One Economics, Many Recipes: Globalization, Institutions, and Economic Growth (Princeton: Princeton University Press, 2007); Dani Rodrik, Has Globalization Gone Too Far? (Washington: Institute for International Economics, 1997). and it unveils the connections and implications of the relationship between the forces of globalization, markets and the states in a rapidly transforming world. The point of departure is in the presentation of a case for a new type of globalization, and a rather bold attempt to theorize the inherent conflict of interests between democracy, national determination, and economic globalization. This is buttressed by a warning over the desirability and viability of globalization, and the fact that arguments for an integrated global economy and free trade might not always be advantageous. Hence, revealing the pressure points in the system and possible intervention mechanisms.
This book is made up of twelve chapters, all reflecting on the theme of globalization from its seventeenth century origins, the era of the gold standard, the Bretton Woods Agreement, and to what has variously been referred to as the Washington Consensus, market fundamentalism or neo-liberalism in the present day. The analytical fulcrum of the book rests on a fundamental trilemma: “that we cannot simultaneously pursue democracy, national self-determination, and economic globalization. Give too much power to governments, and you have protectionism. Give markets too much freedom, and you have an unstable world economy with little social and political support from those it is supposed to help.”
In what may be described as an alternative to the “shaky pillars” of the globalization process, Rodrik connects with, and opens up new vistas on the idea of “smart globalization, not maximum globalization.” The book draws on events like the World Trade Organization (WTO) meetings, popularly known as, the “The Battle of Seattle”, or the so-called “Teargas Ministerial”, and the East Asian Financial Crisis of 1997 to provide empirical support for the conceptual arguments in the book, and to showcase the dangers inherent in globalization and unregulated hyper-competition.
Yet, Rodrik’s critique of mainstream capitalism, beyond noting correctly the transformation from Capitalism 1.0 (Smith) to Capitalism 2.0 (Keynes) and their limitations, does not fully illuminate the workings and dialectics of capitalist globalization on a global scale. Hence, his attempt to come up with a framework for Capitalism 3.0 is undermined and under-developed, and this constitutes one of the major weaknesses of the book. There is a sense in which a lot of attention is focused on the developments at the global level, justifiably so, but the challenge appears to be that the focus on the global eschews references to developments at the margins or below. The resultant effect of this is that the book tends to ignore the salience of globalization as a product of the cumulative convergence of projects of market-making and democracy, and drifts away from focusing attention on power, history, place and agency. This, perhaps, limits the extent to which the author explores the dialectics at multiple levels and scales of globalization, but more fundamentally, fails to engage with the importance of ‘territory’ and ‘space’ as signifiers of patterned bundle of political, economic and social relationships in the process of globalization.
Nevertheless, this is a well-written book on one of the most critical challenges confronting our increasingly globalizing world. It questions the dominant narrative on the globalization discourse, demanding a rethink of long-held assumptions, and advances reasons why it is in our interest to address the risks and dangers posed by economic globalization. The important message to take away from this book is that the long term sustainability of economic globalization is in question, and there is a need to manage the already evolving processes of economic integration to ensure that everyone benefits. The pressing question that remains is where this change will emanate from. The book may not have provided a definitive answer to this, but it does point to the problem and puts the debate back into public discourse.
- 1Dani Rodrik, One Economics, Many Recipes: Globalization, Institutions, and Economic Growth (Princeton: Princeton University Press, 2007); Dani Rodrik, Has Globalization Gone Too Far? (Washington: Institute for International Economics, 1997).