Until recently, the so-called Washington Consensus, with its emphasis on liberalization, deregulation and privatization, shaped economic policy worldwide. While the 2008 global financial crisis eroded its credibility, the G20 countries quickly agreed to avoid the protectionist policies against which the consensus stood.
Meanwhile, the European Union is the only democratic supranational entity, taking pride in its advances despite its many defects. In other words, economic integration, anchored in the nation state, remained in favor globally, while democracy was secondary to international market dynamics.
But 2016 marked a turning point, though we still do not know toward what. A “Beijing Consensus” has emerged, which some view as an alternative model of development based on greater government intervention. But it was the Brexit vote and the election of Donald Trump that really reflected the move to upend the long-established balance among globalization, the nation state and democracy.
“Take back control” was the Brexiteers’ winning slogan, a sentiment that resonated with the slim majority of British voters who supported withdrawal from the EU. Likewise, many Trump voters were convinced that the accumulated powers of Wall Street, transnational players and even other countries had to be reined in to “make America great again.”
It would not be wise to scorn this diagnosis, to which Rodrik himself subscribes (at least in part), just because one dislikes the proposals put forward by Trump and some of the Conservative proponents of Brexit. Their approach is to hinder globalization — while maintaining or even enhancing other aspects of the Washington Consensus, such as financial deregulation — and strengthen democracy through the nation state.
In his first appearance before the UN General Assembly, Trump delivered a 42-minute speech in which he used the words “sovereignty” or “sovereign” 21 times — an average of once every two minutes. And in Europe, the UK is not the only country to be carried away by a neo-Westphalian current: Poland and Hungary are in its grip as well. Even the Catalan pro-independence movement follows a similar logic of retreat into nationalism.
All these forces overestimate their capacity to dilute or circumvent economic integration, which has been strengthened in recent decades by the rapid development of cross-border value chains. Unless these forces reverse course, they are more likely to dilute the influence that their nation states (or the states they seek to create) might be able to wield over globalization. In short, an increase in formal sovereignty could paradoxically result in a loss of effective sovereignty, which is the kind that really matters.
For instance, by leaving the EU, the British will have no say over what is far and away their most important export market. As for Catalonia, a supposedly pro-independence and pro-sovereignty movement could end up creating a polity that is less sovereign and more at the mercy of international events.
The Brexit vote and the election of Donald Trump are viewed as attacks on globalization, but they should not lead to a retreat into isolationism.
A week after Trump’s UN speech, French President Emmanuel Macron presented his vision of Europe’s future. He also mentioned the word “sovereign” repeatedly, making it clear that it forms the basis of his vision for Europe. But, unlike populists, he favors an effective and inclusive sovereignty, European in scope and supported by two more key pillars — unity and democracy.
Relations between states are driven by cooperation, competition and confrontation. There is little doubt that some confrontation will always be present internationally, but the EU has demonstrated that it can be reduced by exponentially increasing the opportunity cost of conflictive dynamics. Unfortunately, the movements that understand sovereignty in isolationist terms usually revert to extreme nationalism, which is not given to promoting the common spaces that allow international society to prosper.
The preference of some countries to isolate themselves within their borders is anachronistic and self-defeating, but it would be a serious mistake for others, fearing contagion, to respond by avoiding engagement with these states. The spirit of cooperation, along with constructive competition, should structure relations between all players that possess international legitimacy. Even in states that have succumbed to reductionist discourses, much of the population has not; 48 percent of British voters opposed Brexit, and 49 percent of Turks voted “no” to expanding the Turkish presidency’s powers, implicitly rejecting a narrative that used the EU as a scapegoat. Many of these voters would surely be disappointed if the EU turned its back on them.
The vitality of international society depends on dialogue. To avoid perpetuating the deficiencies of the Washington Consensus, which were revealed with such clarity in 2016, this dialogue must occur within the framework of a common and democratic public sphere. If we cultivate this common public sphere, reducing the pre-eminence of the nation state, we could advance step by step toward the least explored side of the triad described by Rodrik: global democracy.
Of course, a universal democracy would be a very difficult objective to achieve (Rodrik himself rules it out). But with technological development and the multiplication of economic and cultural synapses, it is not a chimera. In this sense, the EU has already forged a new path, one that aims to expand democracy beyond the realm of the nation state. For Europe, as well as for other regions, it is a path worth following.
• Javier Solana was EU High Representative for Foreign and Security Policy, Secretary-General of NATO, and Foreign Minister of Spain. He is currently President of the ESADE Center for Global Economy and Geopolitics, Distinguished Fellow at the Brookings Institution, and a member of the World Economic Forum’s Global Agenda Council on Europe.
© Project Syndicate