The Post-globalist Capitalist revolution is coming

I was reminded of these early dung-managers when reading a piece on Conservative Home by Nick Hargrave, former Number 10 SPAD who made policy for both David Cameron and Theresa May. More State, more Spending, more Spin and more Tax are Hargrave’s recommendations – thus exhibiting an almost wilful blindness to the reality of the world today, taking refuge in the comfortable horse-dung of an imagination limited to the past. Hargrave is unaware that without radical change there will be by 2040 neither a Welfare State nor an NHS in the UK.

From 1971 onwards, when the effects of Bretton Woods in managing national competitive advantage by regulating national capital flows were removed, globalism in place of international trade became possible. During the past twenty years globalism has been in the ascendant, as Daly wrote in 1999

The classical economists like Ricardo, were nationalists, and that is why they were so devoted to comparative advantage. We are presumably beyond that now. We are cosmopolitan individualists on a global scale, interested in maximizing global product. Comparative advantage, because of its premised constraint on capital mobility, does not maximize global product. But absolute advantage, by relaxing that constraint, does. We are simply not interested in the national distribution of gains and losses from global trade.

That neglect of the distributional effects has given us the Elephant – global gainers including the people of India, Vietnam and particularly China, and global losers including a vast mass of middle and working class citizens in the developed world, who have lost income, status and job security in a period of rapid change in which the balance towards fairness and social cohesion built by a century or more of painfully-wrought agreements on the relationship between Labour and Capital have been junked, skipped and disregarded. The real gainers are the global 1%, whose wealth and income has increased exponentially.

The biggest myth is perhaps that global markets are free markets. They are not. The global corporates use market power, intellectual property and trademark rights, data power and the de facto granting of ‘knowledge’ monopolies by state actors. Supranational authority that imposes systems of regulation and over-regulation that favour the oligopolistic globals – whether the EU or the UN – at the expense of non-global competition is an ally of globalistic advantage.

The harmonisation of standards through bodies such as the EU and UN is also paradoxically of national disbenefit to the developed world, as Daly explains

When different national markets with different rules for the internalization of external costs merge into a single market, then the different rules of cost accounting present a big problem. Under globalization the market left to itself will resolve the difficulty by standards-lowering competition — the way of counting costs that results in the cheapest product will prevail……

Under the traditional comparative advantage (internationalist as opposed to globalist) regime, each country could indeed adopt its own separate rules of cost-accounting, reflecting its own values and traditions, and not worry about harmonization. As long as capital must stay at home countries are not forced into a standards-lowering competition to attract and keep capital. Goods and services can be produced and freely traded according to comparative advantage even when trading partners have totally different ways of measuring costs.

I don’t want to get mired in theory about globalism. The reality is that if we have not as yet reached Peak Globalism then we are fast approaching it; Trump, Brexit, the Gilets jaunes, Italy and the fast-approaching Eurozone recession are already with us. The reactions and anticipation of outcomes will increasingly define political alignments – I can detect a coalescing of opinion around several divergent standards

Progressives 
Those looking to help design the successor to globalism; Internationalists, Localists, committed to democratic outcomes and social equity. Radical reform of tax and welfare systems, renewal of political identities, utilising capitalism to generate wealth but in control of its effects, recognition of the deep and fundamental changes that AI and technology will bring, committed to achieving a Durkheimian social integrity and coherence in contrast to a globalist amomie

Primitives
Those committed to global government, a world-wide constitution and harmonisation of everything, open borders, unrestricted global economic activity, worldwide legal, judicial and justice systems, abrogation of personal freedoms to a class of benign appointed experts who will act in the general good, the growth of the ‘citizen of everywhere’, the rule of benign technocracy over ‘old fashioned’ democracy, the supremacy of supranational State authority.

Philistines 
Those of all political colours in denial that massive change is underway; the managers of horse-dung, political nostalgics, the patrician elite and the dags of globalism, social progressives, the political class and the old fourth estate, all those threatened by what they term ‘populism’, the 1% and the winners from globalism who just want everything to stay the same. Plus the naive zealots – those who believe that anthropomorphic global warming / Moslem immigrants / 12 foot alien lizards / secret Zionist conspiracies / American hegemony and suchlike are actually responsible for what’s happening.

Change is coming. We need people of vision and ability, not managers of yesterdays horse dung.