The Double Movement: global market versus regionalism

Abstract

(bl yc.1997.a.934) The problem of social order and economic freedom An economic system presuposes some king of social order. A social order is a coherent system of rules which is accepted by the actors constituting the system. The concept can contain both coercive and consensual dimensions. The market system of exchange is not in itself an order, but is confined by a particular order that expresses its underlying value system, or normative content. Therefore, market systems differ to the extent that their underlying social orders differ. If, as in the case of the post-communist world, there is a transition between different orders, the market can only reflect the confusion and turbulence of this transition, but it will not by itself create order. 223 The problem of social order and what is often called 'economic freedom' meaning non-regulation of economic activities and flows, has been thoroughly analyzed and discussed primarily in national contexts. This essay deals with the problem of how, on a world scale and in a context where no formal political authority exists, 'economic freedom' can be made compatible with social order. The basic issue is the relationship between forces of globalization and forces of regionalization. Regionalism is one possible approach to 'a new multilateralism'. 223 New regionalism differs from the old in the following aspects: a) Whereas the old regionalism was formed in a bipolar Cold War context, the new is taking shape in a more multipolar order. b) Whereas the old regionalism was created 'from above' (that is by the superpowers), the new is a more spontaneous process 'from within' (in the sense that the constituent states themselves are main actors). c) Whereas the old regionalism was specific with regard to objectives, the new is a more comprehensive, multidimensional process. 228-229 The dimensions of regionalization The process of regionalization implies a change from relative heterogeneity to increased homogeneity with regard to different dimensions, the most important being culture, security, economic policies and political regime (7italics). Cultural homogeneity or cultural pluralism Security. Paves the way to regional economic cooperation. A common security order is a necessary, albeit not sufficient, precondition for regional integration. Of equal importance is the compatibility of economic policies. (autarkic vs open economy). Shared commitment to economic (market) principles. 'Developmental regionalism' implies a regional arrangement by a commitment to regional economic regulation. 229-230 The homogeneization of economic policies (2italics) may pave the way for further regionalization, as when similar regimes are voted to power simultaneously, but it may also be a conscious political decision… . the decision should lead to a further harmonization of economic policies… 230 The dynamics of regionalization Regionalization is a complex process of change taking place simultaneously at three levels: the structures of the world system as a whole, the level of interregional relations, and the internal pattern of the single region. Changes on the three levels interact, and the relative importance of them differs from one region to another. 231 The 'black-hole syndrome' The actual process of regionalization is triggered by events, the importance of which can be understood only in retrospect. However, one type of event, relevant for regionalization, which seems to turn up frequently is the 'black-hole syndrome'. 232 "Black-hole' (a metaphor coined by Richard Falk) is a 'pretheoric' way of accounting for the disintegration of nation-states, or rather 'nation-state projects' in the context of global change. The earlier examples of break-down of states are few, and tended rather to confirm the basic persistence of the interstate, or Westphalian, system. 233 The neo-mercantilist position …the political ambition of creating territorial identity and regional coherence is the primary neomercantilist goal… 237 What we could call neomercantilism is thus a transnational phenomenon. 237 There is a difference between this new form of protectionism and the traditional mercantilist concern with state-building and national power. Neomercantilists argue in favor of the regionalization of the world into more or less self-sufficient blocs. These blocs would be introverted and maintain symmetric relations among themselves. This is the 'benign' type. The 'malign' type is offensive and aggressive, an 'extended economic nationalism'. The 'benign view' of mercantilism coincides with what I call 'the new regionalism'. 239 Regionalism and world order Writing in 1945, Polanyi identified three dangerous 'universalisms', that is social orders with ambitions to become world orders: Hitler's principle of racial domination, liberal capitalism on global scale, and world revolutionary socialism. Writing in 1992, we may now write off revolutionary socialism together with fascism (at least as macro-ideology), but 'global liberalism' is still on the agenda, and so is the scenario Polanyi argued for in 1945: 'regional systems coexisting side by side'. This is a social order not ready discarded by historical experience, and it is real, since there are signs of 'regionalism from below', albeit of highly different strengths and orientations. One way of looking at the relationship between globalization and regionalization is to apply Polanyi's concept as follows: globalization implies market expansion; regionalism is a neomercantilist regulation of the turbulence generated by this emerging global market; nation-states cannot handle this crisis the way they did in the 1930s, so the regulation capitalism is more likely to manifest itself on the regional level this time; the eruption of 'black holes' and ensuing security crises further underlines the imperative for regionalism as the constituent factor in world order. 240