Globalization and the New Politics of Embedded Liberalism

Globalization and the New Politics of Embedded Liberalism

Globalization and the New Politics of Embedded Liberalism

Globalization and the New Politics of Embedded Liberalism

Synopsis

As the world economy slides into the worst recession since the 1930s, there is fear that hard times will ignite a backlash against free trade policies and globalization more generally. This book explores the political and economic institutional foundations of the bargain of embedded liberalism and the ways domestic institutions shape how governments redistribute the risks and benefits of economic globalization. The author identifies the Anglo-American democracies, because of their majoritarian polities combined with decentralized, competitive economies, as uniquely vulnerable to the contemporary challenges of globalization and the most susceptible to a backlash against it.

Excerpt

I have been working on this book for many years. (Most of my friends would say too many years.) When asked to describe the project, I used to respond that it is about how national institutions—primarily electoral and labor market institutions—shape the political and policy responses of governments to economic globalization. To clarify, I would add that it is about how domestic politics reacts to and interacts with the global economy and how institutions structure these relationships. These topics are central to the study of comparative and international political economy, my areas of specialization in political science. As a result of contemporary world events, I have changed the way I frame these issues and even changed the content of the book to a limited extent, hoping to reach a larger audience. Today I describe the book’s topic as the political backlash against globalization in the Anglo-American democracies, and I say that the reason people who do not study political economy for a living should care about this, without trying to sound hyperbolic, is that the future of the global economy is at stake, and possibly international peace and stability as well. This is a more interesting description, even for political scientists.

When I started writing, the likelihood of a political backlash against globalization, one with the potential to undermine longstanding foreign economic policy commitments to economic openness and multilateralism, seemed remote. The idea that such a backlash would take hold in the AngloAmerican democracies seemed even less likely. Economic historians were noting important similarities between the late 19th and early 21st centuries, but the possibility that the emerging discontent then and now would end the same way, that we would see a repeat of the 1930s when the international economy collapsed under the weight of global depression and beggar-thyneighbor foreign economic policies, was dismissed, and rightfully so, by most as fanciful. This is no longer the case. The 1930s have become our new historical reference point. At the time of this writing, headlines warning the return of economic nationalism abound. The United Kingdom is preparing to undertake immigration reform, partly to save “British Jobs for British Workers,” and the United States has just adopted a nearly $800 billion stimulus bill with a “Buy America” clause that has the international community . . .

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