Euroscepticism, the Netherlands, Uncategorized

the lessons from Rodrik’s globalisation paradox

Last week we had the pleasure to hear Professor Dani Rodrik deliver the annual lecture of the Dutch Scientific Council for Government Policy (WRR). The lecture was a brilliant example how a widely published academic economist, active in the best scientific journals in his field, can fulfill a public role and explain in an elegant, yet simple way, without a single graph or table, a complex argument. The full lecture is not available (summary here), but the theme and content were the same as the arguments developed in Rodrik’s latest book, The Globalization Paradox. Briefly, Rodrik argues that the move towards hyperglobalization in the last two decades, meaning the removal of all border controls to trade and financial capital, has led to a reduction of policy space for governments.  Democracy has been affected, as in many cases constituencies have lost their access to points where policies were being made, leading to a situation where a trilemma exists between national sovereignty, democracy and (hyper)globalisation.  The trilemma means that we cannot, as he argues in The Globalization Paradox (p xviii), simultaneously pursue democracy, national determination and economic globalization. If we were to push further with globalization, he clarifies, we have to give up either the nation-state or democratic politics.

In his WRR lecture he argued that the European Union is a unique example where common institutions are being built to balance the removal of border controls at the national level. The EU, he argued, has been in the process of creating a counterbalance to hyperglobalization in the form of institutional rules. But, he added, the global financial crisis came too soon for this process of rule creation to make enough of a difference.

Apparently, before the lecture Rodrik met the Dutch Prime Minister for lunch, which, one hopes, was an occasion to share his views on the implications of the globalisation paradox for Europe. His interpretation of the EU’s role in the crisis was an optimistic and friendly one. In his lecture he made sure to stress his view of these implications was not an Euroskeptic one. However, it is clear that if one takes his arguments seriously, the euro zone version of his trilemma means that EU has either to move towards political union – institutionalizing more common rules at EU level – or decrease the level of globalisation, that is, abandon Economic and Monetary Union. He left it there, although it is clear from this piece published by the Project Syndicate what he thinks of the break up of the eurozone.

We will probably remain in ignorance as to what the Prime Minister made of Rodrik’s arguments, as he, or any other Dutch politicians do not seem to share their views on Europe with the citizens. Not on enlargement – as the previous post on this blog argued – and not on where the EU should go – beyond the usual rhetoric reinforcing the impression that the EU is a zero sum game and the Dutch government are ‘fighting’ against EU partners for our interests. The domestic rules of the political game of a government with support from the PVV can be blamed for this ‘pragmatic’ approach to the eurocrisis communications. But one cannot help wishing for a clear statement of the ideals this government wish to pursue with relation to Europe in the future. In my modest way, I am with the angry Jurgen Habermas: ‘The media “must” help citizens understand the enormous extent to which the EU influences their lives. The politicians “would” certainly understand the enormous pressure that would fall upon them if Europe failed. The EU “should” be democratized.’

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