For many distinguished observers, the Russian invasion of Ukraine marks the end of globalization as we have known it. Yet a more gradual slowdown in this process was already underway before the conflict and even before the pandemic. In 2019, the value of global trade had fallen to 57% of world GDP compared to 60% in previous years. What do you think?
There are and were many signs of a turnaround in the globalization process and they did not begin with the invasion of Ukraine. Globalization is a process that has been left almost entirely to the will of the market and capital and which has also had the effect of an exponential growth in the turnover of multinationals, by now so large as to escape political power. The balance of power has thus been reversed: the cases in which governments show subordination to the logic of the market and the needs of multinationals. It is a phenomenon that can be observed in all fields: from services to logistics. Amazon is being courted, for example so that it opens its factories in some states rather than in others, because in this way employment increases, but it is clear that the multinational establishes the factories where it suits it, that is, where the work costs less and the tax breaks for taxpayers are greater . This triggers a downside competition between states to increase this type of employment, and it is done by laying the legislative foundations for the reduction of wages.
In the two years of the pandemic, many have stressed the excessive power of pharmaceutical companies. Vaccines have also been developed thanks to public funding yet the profits from patents have remained totally privatized and companies have imposed their prices, often many times higher than the costs of production …
The health of the citizens of the world was entrusted to a multinational that produces a drug in a hurry and politicians who push for mass inoculation. The EU intended to keep the commercial contracts stipulated with the purchasing countries secret, in fact sold directly in Brussels and then channeled into the individual states, with the approval of various bodies in charge of supervision at times really unclear. Thanks to this architecture pharmaceutical groups have grossed stratospheric profits. We can also say that the pandemic crisis coincided with the apex of the expansion of Western-style globalized capitalism. And the expansion of multinationals on the markets is accompanied by the crisis of democracy in European countries, favored by the increase in inequalities, poverty, unemployment and precariousness, in proportions of which I believe no one has full knowledge yet.
Harvard economist Dani Rodrik, critical of some aspects of globalization for not suspicious times, spoke of the rest of a “trilemma”. Between democracy, nation state and international economic integration it is possible to choose only two things. Impossible to have all three together.
European governance has been reshaped along the lines of that which the International Monetary Fund, a body representing the United States, has imposed on the rest of the world. This is how it works, a state is in financial difficulty – perhaps precisely because the world financial system itself is in bad shape. The rating agencies (the three most important Standard & Poor’s, Moody’s and Fitch are American), in concert with the supranational institutions, put pressure on them, and the latter at some point propose a negotiation. They offer to help the troubled country financially, but they owe it in return surrender one’s sovereignty, in the sense that for the years to come and the governments to come, it is the international bodies that decide to govern the territory, preparing detailed reforms in all the main areas of social life. It does not matter that the people express a majority preference for an electoral program, it is all false, because Parliament will have to carry out the reforms brought down from above under dictation. End of democracy, end of the sovereignty of a state. Greece was a prime example of this. The agreements are structured in such a way that the next installment of financial aid is paid only if the creditor institutionthe European Union or the Mes / Troika with its “bailout funds”ascertain that the parliament and the government have actually implemented the imposed reforms.
Reforms that often affect the weakest sections of the population while those who have large capital can easily move them elsewhere and protect them from any intervention….
The reforms are in fact mostly based on the drive to the highest levels of competitiveness and competition, which also involves the reduction of the welfare state and the bargaining power of workers. In practice, Western-style globalization has now become a class struggle on the contrarywhich sees politics as a faithful ally of big capital.
What impact does war have on this picture you draw?
I make a very simple consideration. We cannot export democracy if we destroy ours in the meantime. I believe this profound contradiction of the West is a factor of extreme weakness for the system of power itself, because it is aware of the reality of the facts, a large part of public opinion no longer trusts. This certainly does not depend on the war in Ukraine, which in this sense represents only an acceleration factor of the profound contradictions that are now tearing the West apart. Until now, the rupture between democracy and globalization has been hidden behind the myth of the technicians whose first taste we had in the dictator’s Chile Augusto Pinochet. There are those who think that the justification of political choices in the event of a crisis through the creation of the so-called “control rooms” is a new fact, linked to the pandemic crisis, but this is absolutely not the case. I wonder how it is possible that democracies Westerners have embraced these logics depriving of meaning of the citizens’ right to vote, the decisions are so much those of the technicians, that in the end they are poorly hidden political choices.
How can the Italians forget that the Monti government was established precisely on the myth of the “technician”? Except then realizing that not only were the choices purely political but that they went in favor of the few and against the masses: just remember the pension reform or the attack on workers’ rights, or the reduction of the welfare state in the name of containment. public debt, which was “bad” only if it was intended to meet the needs of citizens.
How does it come out?
Going back today is really complicated, because the delegation to private capital on all the main strategic sectors it is such that now public power is groping in the dark. The expansion of multinationals is uncontrolled, and targeted investigations would be needed to shed light on what the state of globalization is today, and on the real relationship that exists between states and private capital. The amount of mergers and acquisitions apart from giants such as Amazon, Facebook and Microsoft is such that the Federal Trade Commission – the US government agency that deals with consumer protection and the elimination and prevention of anti-competitive practices – has ordered to provide information on previous acquisitions, not communicated to antitrust agencies about the transactions concluded between 1 January 2010 and 31 December 2019. The truth is that very little is known about the real state of things, multinationals have no national interests, but they take advantage of the opportunities offered by the various territories to make the most of the world chessboard. The war in Ukraine, hopefully as soon as possible, will end, but the crisis of globalization will not disappear, the war will no longer be between states but between capital and states. So there are two things, either we take this opportunity to open a serious and structured debate, or we are destined to suffer events.