Global Social Democracy – Why I disagree with Walden Bello

The Coming Capitalist Consensus’, a thought-provoking polemic by Walden Bello, the Filipino anti-globalization guru and sociology professor based at Focus on the Global South. Walden argues that a new form of ‘Global Social Democracy’ (GSD) is emerging from the crisis of market fundamentalism and finance capitalism. He sums up its key propositions as: · Globalization is essentially beneficial for the world; the neoliberals have simply botched the job of managing it and selling it to the public; · It is urgent to save globalization from the neoliberals because globalization is reversible and may, in fact, already be in the process of being reversed; · Growth and equity may come into conflict, in which case one must prioritize equity; · Free trade may not, in fact, be beneficial in the long run and may leave the majority poor, so it is important for trade arrangements to be subject to social and environmental conditions; · Unilateralism must be avoided while fundamental reform of the multilateral institutions and agreements must be undertaken – a process that might involve dumping or neutralizing some of them, like the WTO’s Trade-Related Intellectual Property Rights Agreement (TRIPs); · Global social integration, or reducing inequalities both within and across countries, must accompany global market integration; · The global debt of developing countries must be cancelled or radically reduced, so the resulting savings can be used to stimulate the local economy, thus contributing to global reflation; · Poverty and environmental degradation are so severe that a massive aid program or “Marshall Plan” from the North to the South must be mounted within the framework of the “Millennium Development Goals”; · A “Second Green Revolution” must be put into motion, especially in Africa, through the widespread adoption of genetically engineered seeds. · Huge investments must be devoted to push the global economy along more environmentally sustainable paths, with government taking a leading role (“Green Keynesianism” or “Green Capitalism”); · Military action to solve problems must be deemphasized in favor of diplomacy and “soft power,” although humanitarian military intervention in situations involving genocide must be undertaken. As I read these, I found myself thinking ‘hmmm, sounds pretty good to me’ (with the possible exception of GM seeds, that is).  Which is disturbing because Walden is trying to alert us all to the new danger represented by GSD, arguing that ‘many progressives are still fighting the last war, that is, against neoliberalism’. He identifies four to my mind fairly unconvincing flaws. 1. ‘GSD assumes that people really want to be part of a functionally integrated global economy where the barriers between the national and the international have disappeared. But would they not in fact prefer to be part of economies that are subject to local control and are buffered from the vagaries of the international economy?’ Sounds alarmingly chauvinistic in the UK, where workers are currently striking to drive out foreigners, while in the US, Congress is backing ‘buy America’ legislation. 2. ‘GSD shares neoliberalism’s preference for the market as the principal mechanism for production, distribution, and consumption, differentiating itself mainly by advocating state action to address market failures…. This is very different from saying that the citizenry and civil society must make the key economic decisions.’ Not sure I want Oxfam et al running the Treasury, thanks all the same! 3. ‘GSD is a technocratic project, with experts hatching and pushing reforms on society from above, instead of being a participatory project where initiatives percolate from the ground up.’ Only if you discount trade unions, political parties and all the other organizations involved in constructing GSD as irredeemably elitist and ‘not civil society’. 4. GSD seeks merely to ‘minimize capitalism’s tendency toward crisis. Just as the old Social Democracy and the New Deal stabilized national capitalism, so…. GSD is, at root, about social management.’ Well the previous period of social democracy (the ‘golden age’ of the post war generation) produced unsurpassed progress for poor people around the world, so Walden’s alternative had better be convincing. And I don’t think it is. His final call to arms says ‘Progressives should boldly aspire once again to paradigms of social organization that unabashedly aim for equality and participatory democratic control of both the national economy and the global economy as prerequisites for collective and individual liberation. Like the old post-war Keynesian regime, Global Social Democracy is about social management. In contrast, the progressive perspective is about social liberation.’ Which is pretty unspecific stuff, more concerned with process than policies or institutions. It reminds me of Omar Cabezas, the Sandinista comandante, who in the film of his wonderful autobiography describes arriving in triumph in the main square of Managua on 19 July 1979, the day of the Revolution, sitting down with all the other comandantes, and one of them saying ‘OK, so now what do we do?!’]]>

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12 Responses to “Global Social Democracy – Why I disagree with Walden Bello”
  1. Antonia

    Duncan – workers in the UK are not “striking to drive out foreigners”. They are striking in defence of decent labour rights in the face of a flexible market-driven approach which is pushing down wages and rights for all. The advent of wholesale importation from abroad of a subcontracted labour force in one refinery is just the trigger.

  2. Duncan

    You’re right Antonia, apologies. Union officials have gone out of their way to make this point. But the far right British National Party is already cruising the picket lines hoping to pick up support – it will be very hard to maintain the distinction if the protests escalate

  3. Antonia

    Which is precisely why it’s up to those of us on the progressive side of politics not to elevate the role of the BNP and to stand alongside unions who are representing their members. For interest, the demands of the strike committee are here: here – a clear focus on unionisation and support for migrant workers as well as British-born workers.

  4. David Taylor

    Spot on article. I’m happy to support the idea of GSD as he has defined, and actually in fairness to Bello, more radical voices such as his are a good thing to help keep social democrats in check from becoming too moderate.

  5. Peter Mayers

    I’m not quite sure what to make of your description of Bello’s views — in regard, that is, to local control and the desirability of buffering countries from the vagaries of the international economy — as ‘alarmingly chauvinist’. Shortly after said comment, after all, you praise the results achieved by Golden Age social democracy. Yet the latter precisely involved a good deal of local/national control and buffering from the international economy! You don’t really mean to say — do you? — that (say) the exchange controls applied by the Swedish state in 1970 were an instance of evil localist or nationalist chauvinism? More generally, what would a repudiation of local control and national economic buffering mean? Would it mean, perchance, that any buffering from the vagaries of the international has to be done by a global authority of some kind — or not at all? Tacksam för upplysning! (That’s Swedish for: “Grateful for illumination!”)

  6. Peter Mayers

    Apropos of my last question, I don’t see how any serious system of social protection against the vagaries of international markets can be erected at a supranational level. Not in the current historical epoch, at any rate. A large part of the reason for this is founded in a simple problem of scale. (Simple, yes; easily fixed, no!) That is, all existing supranational institutions are quite simply — above all in fiscal terms — far too small and wispy and insubstantial. Take the fiscal resources commanded by the central authorities of the most solid and substantial international organisation of them all: the European Union. Mighty among international organisations the EU may be; but, compared fiscally with the member states that make it up, it is quite simply a midget. The central authories of said body dispose, namely, of a bit over one percent of the Union’s GDP. Compare that to the fiscal muscles sported by any of its member states; the difference is simply massive. (And one needn’t resort to the extreme case of Sweden or Denmark; that of Spain or Greece will do well enough.) It may be that the fiscal resources commanded by the EU’s central authorities will one day become vastly greater than they are today; if and when they do, it may well prove possible to implement a serious system of social protection at the pan-Euyropean level. Indeed it may even, eventually, become possible to implement such a thing at a global level. However, the accumulation of the necessary resources at one or another transnational level is likely to be the work of an entire epoch; it’s likely to take a very long time indeed. In the meantime, the bulk of the work of social protection will have to be done at the national level. International arrangements of various kinds are certainly important — for providing a favourable outer framework (or not) for the pursuit of social democratic policies. The heavy lifting, however, will have to be done at the national level for the foreseeable future. This is a simple consequence of the size, structure, and scale of the various institutional complexes to be found at the national and international levels, respectively. This is an serious and intractable problem, and social democrats need to face it squarely. The requisite institutional mechanisms cannot be called into being at all quickly, no matter how ardently we pray to the god of internationalism.

  7. Peter Mayers

    As mentioned in my last two comments (I really will shut up for this evening after this last comment; I promise!), I don’t see how the necessary ‘buffering’ against the vagaries of markets can be carried out at any other level than (primarily) the national level. Not during the present epoch, at least. (I assume, furthermore, that virtually all social democrats will agree that some kind of buffering — by some kind of authority, somewhere along the line — against the vagaries of markets is greatly to be desired; and that, conversely, the absence thereof is highly undesirable.) Take the case of Spain today. Said country forms part of the eurozone, which means it cannot ameliorate the severe downturn from which it’s now suffering by allowing the external value of its currency to decline. Nor can it lower interest rates; that prerogative is reserved for the ECB in Frankfurt. (Expressed in more technical language, Spain cannot correct for the ‘asymmetrical economic effects’ that arise when a montary union is operating unaccompanied by a fiscal union.) If euroland were a fiscal union as well, on the other hand, the central authorities of said fiscal union could help alleviate the pain in Spain by transferring lots of funds to that country. Euroland, however, is not a fiscal union (except in a trivial degree — the requisite resources simply aren’t there, notwithstanding all the talk about extravagance in Brussels). As a result, all that Spain can do now to recover a degree of competitiveness is to cut wages and/or allow unemployment to rise. Not an option to be preferred by social democrats, it need hardly be said. The moral of the story is simple: declarations of international solidarity are all well and good, but we simply cannot do without a serious no-nonsense tool for implementing them. Without the latter, namely, the former are pious and empty. For example, a fiscal midget of the sort that the EU is today can’t possibly do the sort of job that’s now required with respect to Spain (and Portugal and Greece and Ireland and …). We can talk about European solidarity all we like, but such talk means nothing unless the central authorities have the means, the methods, the tools, and the resources to do the job.

  8. Duncan

    Interesting Peter, Firstly, I do not deny that national politics and the national economy remain supreme – that’s a key part of the argument of From Poverty to Power. And I’m a firm believer in industrial policy being key to developing country take-off (witness Dani Rodrik, or Ha Joon Chang’s work over the years). But when applied as a general principle, including in rich countries, it leads to absurdities like the Common Agricultural Policy, and does harm poor countries trade prospects. So on that issue, I am probably somewhere on the fence betweem Walden and the GSD.

  9. Peter Mayers

    Thanks for your reply, Duncan. Could you explain a bit further? What kind of ‘buffering’ (aside from the CAP) is a bad idea to apply at the national level? And if it’s ruled out at the national level, at what level (and in what way and through what structures) would the buffering be accomplished? (In view, that is, of the pronounced fiscal weakness of all existing or prospective supranational institutions?) Or are you saying, perhaps, that buffering of any kind, carried out at any level (save that done by developing countries seeking take-off) must be foresworn? Will people in developed countries all have to resign themselves, then, to maximum exposure to whatever spasms and jerks the international capitalist economy imposes on them? And if so, how is such a position compatible with a social democratic outlook? Isn’t a substantial level of social protection or ‘buffering’ a sine qua non of social democracy? Or are you making, perhaps, a fundamental distinction between ‘buffering’ on the one hand and social protection on the other (the former being a subset of the latter)? That is, are you perhaps saying that social protection in the rich countries should, in the maximum feasible degree, be of an ‘after the fact’ variety? In other words, are you urging that rich countries expose their populations to the full winds of international competition, and that — to the degree that grievous harm comes thereby to a large section of the population — social policy then be used to compensate those losing out? (Swedish leftists of the more orthodox variety sometimes call this the ‘staten som städgumma’ approach: i.e., ‘the state as cleaning lady’). Is this the only way we in the rich countries can provide social protection for our peoples even while observing our international obligations vis-à-vis poor countries — by using social policy strictly in a ‘cleaning-up’ way. Can we only intervene in markets after the damage has been done?

  10. Duncan

    Hi Peter, I think you’ve got me in the wrong camp here. I certainly don’t subscribe to the ‘let the market rip, then mop up the mess with social spending’ school. For years, I’ve been arguing the historical and actual case for industrial policy and the role of the state in developing countries. History shows that the state has played a central role in both agricultural and industrial take offs, and that protection (what you call buffering) plays a role in that. I guess where I might part company with Walden is in whether this is a good thing in itself, or a means to an end. I go with the latter – there are lots of cases of failed state intervention, where the state comes in, protects an infant industry, which then fails to grow up but ‘captures’the state and makes its subsidies permanent. Result? Waste of money that could be spent on something better (infrastructure, social services)and high priced, rubbish goods for consumers (see my analysis of the Brazilian disposable nappy industry in Silent Revolution: the rise and crisis of market economics in Latin America.

  11. Peter Mayers

    Fair enough. (I might add that, for my part, I’d be most indisposed to regard almost any institutional arrangement as good in itself.) But could you say a word or two about what kinds of ‘buffering’ you think are good, and which bad, in the case of the rich countries? As for what I mean by ‘buffering* — well, I thought I’d leave the specifying to you. As for me, I have an extremely wide range of possibilities in mind here: i.e., any kind of substantial deviation from pure market arrangements, especially if done for red or green (i.e., social or ecological) purposes. That includes classic social policy, but it also includes protectionISM: you know, that thing which, more than almost anything else in the world, makes neoclassical economists wail about the wickedness of the world. Again, it’s red or green protectionism most especially that I have in mind here. (More generally, the question of what protectionism is or isn’t — i.e., where its boundaries go — strikes me as a rather tangled question. Especially if one has anything further in mind than the bare minimum — and easily specified — definition: i.e., tariffs and numerical quotes on imported goods. But I’ve got to stop somewhere, and to leave the boundary-drawing issue to you. I could go on forever about the definitional difficulties, but I imagine that wouldn’t be a very good use of time — whether mine or yours.)

  12. Duncan

    OK, well I guess I think about this with my Oxfam blinkers on. From its point of view, the rich countries can do as much buffering as they want (there’s nothing sacrosanct about the unregulated market), provided it does not create negative externalities for poor people or the environment. That guides are attitude to the Common Agricultural Policy, US Farm Bill, climate change policy etc etc. I think I’d better get back to the day job now…..