The Global Economic Crisis and the Future of Neoliberal Globalization: Rupture versus Continuity

Article excerpt

This article outlines the main elements of rupture and continuity in the global political economy since the global economic crisis of 2008-2009. While the current calamity poses a more systemic challenge to neoliberal globalization than genetically similar turbulences in the semi-periphery during the 1990s, we find that evidence for its transformative significance remains mixed. Efforts to reform the distressed capitalist models in the North encounter severe resistance, and the broadened multilateralism of the Group of 20 is yet to provide effective global economic governance. Overall, neoliberal globalization looks set to survive, but in a more heterodox and multipolar fashion. Without tighter coordination between old and emerging powers, this new synthesis is unlikely to inspire lasting solutions to pressing global problems such as an unsustainable international financial architecture and the pending environmental catastrophe and may even fail to preserve some modest democratic and developmental gains of the recent past Keywords: global economic crisis, neoliberal globalization, G-20, models of capitalism, emerging markets.

Economic and political tectonic plates are shifting. We can shift with them, or we can continue to see a new world through the prism of the old. We must recognize new realities. And act on them.

--Robert Zoellick, president, World Bank Group (1)

The nihilistic voices raised against the disgraced masters of the universe will eventually cease. It is possible to imagine that one day investment bankers may again be welcome at dinner parties. It might take a little rebranding, though.

--Sir Martin Sorrell, CEO, WPP Group (2)

The global economic crisis of 2008-2009 has inspired contending visions about the future of world order. Among pundits as well as policymakers, prognoses continue to range widely from radical systemic reorganization on one end to the eventual reinstatement of the status quo ante on the other. By contrast, scholars have long pointed to a narrower scope of likely outcomes. Proponents of "a new global economics and a new global politics" were careful not to dismiss the dragging force of the "conservative technocratic elitist" policy response that took hold early on. (3) Those who suspected the "neoliberal norms [would] prevail once the cognitive fog lifts" also noted the powerful pressures for "intellectual, organisational and normative change." (4) Three years into the crisis, it is this measured stance that emerges above others. It is becoming abundantly clear that we are set neither for a radical reconstruction of the world as we knew it, nor its senseless endurance. Some defining characteristics of the old order appear to be fading while others remain in force. Ours is a juncture of bounded transformation. (5)

In this article, we highlight the major elements of rupture and continuity in the global political economy since the onset of the crisis. Our starting point is that the crisis poses a fundamental challenge to the project of neoliberal globalization--the worldwide process of reorganizing economic activity on the principle of intensified interaction and interdependence between increasingly open and liberalized national markets, which has received ample endorsement from business and policy elites in both the Global North and most countries of the Global South for the past three decades. It is noteworthy that the present crisis is not the first material challenge to this project. Neoliberal globalism was already put to a tough test during the string of financial melt-downs that engulfed the semi-periphery in the 1990s. These episodes accelerated the paradigm reorientation toward a more social and regulatory system among some supporters of this project and were met with corresponding efforts to redesign emerging market economies, but their lessons were by and large ignored in the Global North and had little impact on the workings of the international economy. …