Economic Globalization, Political Democracy, and Nation-States
You can choose any two. That’s economist Dani Rodrik’s take-away from the Greek debt crisis that is roiling the Eurozone right now:
CAMBRIDGE — The $140 billion support package that the Greek government has finally received from its European Union partners and the International Monetary Fund gives it the breathing space needed to undertake the difficult job of putting its finances in order. The package may or may not prevent Spain and Portugal from becoming undone in a similar fashion, or indeed even head off an eventual Greek default. Whatever the outcome, it is clear that the Greek debacle has given the EU a black eye.
Deep down, the crisis is yet another manifestation of what I call “the political trilemma of the world economy”: economic globalization, political democracy, and the nation-state are mutually irreconcilable. We can have at most two at one time. Democracy is compatible with national sovereignty only if we restrict globalization. If we push for globalization while retaining the nation-state, we must jettison democracy. And if we want democracy along with globalization, we must shove the nation-state aside and strive for greater international governance.
Hat tip: Greg Mankiw who adds “Sad, if true.” Sad, indeed, since to my eye it would mean that we have a choice among permanent abject poverty for half the world (the world without globalization), war without boundaries (the world without nation-states), or a political order that is inevitably and intolerably unjust (the world without political democracy).
As I’ve noted before over at my place, government requires some level of consensus, some basic set of principles on which the great preponderance of the people agree. That condition exists within cultures but the principles on which the great preponderance of the people of the world can agree is actually pretty small. So, for example, the rule of law is a cultural phenomenon rather than a universal value. Majority rule? Same thing. Religious freedom, free speech, the right to own property? Principles that are highly contentious. The sixty year old attempt at codifying a set of values for the whole world, the Universal Declaration of Human Rights, is rejected outright by a significant number of members of the United Nations (they’ve put together their own alternative version). I doubt that any country in the world including this one accepts all of its articles. So, for example, I suspect Article 26 might be hotly debated here:
Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.
Let’s engage in a couple of thought experiments. For both of them let’s assume that Dr. Rodrik’s proposition is true with the modification of degrees, i.e. that the greater the degree of economic integration among countries, the greater the necessary political integration or the less the level of political democracy. Here’s the first thought experiment. Assume the level of economic integration between China and the United States continues to increase. What will the political system of the United States be like in 50 years? Will the United States continue to exist?
Here’s the second. What policy should we pursue? Remember the assumptions.