SOCIAL SEMINAR 1: DEMOCRACY AND GLOBALIZATION

Features and forms of democracy I

What is democracy?

 Democracy is both an ideal and a descriptor. It has different definitions,

understandings, and historical meanings.

 An ideal of government which is characterised as rule by the people

 Abraham Lincoln: 'Government of the people, by the people, for the people'

Attributes of democracy

 Free and fair elections

o Elections are recurrent- Take place every few years
o Elections are free- Candidates are allowed to campaign and voters can
participate without intimidation
o Elections are fair- Votes are counted without fraud, and the government does
not create an unequal playing field against the opposition

 Universal participation
o The adult population enjoys the right to vote and run for office without
exclusions based on income, education, gender, ethnicity, or religion

 Respect for civil liberties

o Democratic governments do not commit gross or systematic human rights
violations against their citizens, do not censor critical voices in the mass
media, and do not ban the organization of legitimate political parties or
interest groups

 Responsible government
o Once elected, civilian authorities can adopt policies unconstrained by the
monarch or other unelected powers
o Executive leaders respond for their actions to the elected representatives in the
legislature
o Both executive leaders and elected representatives are ultimately responsible
to voters for their policies

Features and forms of democracy II

Types of democracy

 Presidential democracy
o Popular election of the chief executive
o Unified head of state and head of government
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o Fixed terms in office

o Possibility of impeachment

 Parliamentary democracy
o Indirect selection of the chief executive
o Separation between head of government and head of state
o Possibility of anticipated elections
o Possibility of vote of no confidence

 Majoritarian
o Disproportional elections
o Two-party systems
o Single-party governments
o Unitary government
o Unicameralism
o Flexible constitutions
o Weak judicial review

 Consensus
o Proportional elections
o Multiparty systems
o Coalition governments
o Federalism
o Bicameralism
o Rigid constitutions
o Strong judicial review

Reading- Democracies by Caramani

Introduction- Democracy:
o The dominant principle of legitimacy in our historical era
o An amalgam of political institutions and practices that originated in different
historical periods and regions of the world
o Describes an ideal and the reality of certain forms of government
o Number of democracies has expanded in the late 20th century
 2018: 99 countries/ 57% of all countries are democracies
o What factors facilitate democratization?
o What are the main problems of contemporary democracy?

What is democracy?
 An ideal for social organization
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o Ideally, social equality is pursued, freedoms are treasured, justice is achieved,

and people respect each other
 'Government of the people, by the people, for the people' - Abraham Lincoln

Origins of democracy
 Ancient Greece: Direct democracy

Modern democracy
 Representative democracy: Citizens do not directly make decisions, they delegate to
elected representatives
 Built on liberal principles of 18th century
 Schumpeter: 'The institutional arrangement for arriving at political decisions in which
individuals acquire the power to decide by means of a competitive struggle for the
people's vote'
 Dahl: 'Defined by the combination of open contestation for power and inclusive
political participation'- Polyarchy (Government by the many)
o Requires freedom of organization, freedom of expression, right to vote,
eligibility for public office, right of leaders to compete for support, alternative
sources of information, free and fair elections, and institutions that make
policies dependent on voters' preferences

 Requirements for modern democracy:

o Free and fair elections
o Universal participation
o Respect for civil liberties
o Responsible government

Hybrid Regimes
 O'Donnell: 'Delegative democracy': 'A type of democratic regime in which the
executive branch concentrates excessive power and is hardly accountable to other
branches of government such as the legislature or the judiciary
 Democracies in which some constitutive attributes are so weak that it is dubious
whether the regime meets the requirements of modern democracy
 Zakaria: 'Illiberal democracy': Regimes that display multiparty elections and universal
participation but fail to respect civil liberties and the rule of law

Types of democracy
 Parliamentary democracies
o The UK, Spain, Belgium, Japan, Germany, Italy
o Indirect election of chief executive
o Limited separation of powers
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o Clear separation between heads of government and state

 Some countries have a parliamentary monarchy
 Other countries have adopted republican regimes - the head of state is
the president
o Flexible terms in office

 Presidential democracies
o The US, South Korea, etc
o Popular election of the chief executive
o Clear separation of powers
o No separation between head of state and head of the government
o Fixed terms in office
o Winner takes all system
o Encourage polarization
o President can claim to truly represent the population
o President can be the loser of the popular vote
 Congress and President have separate mandates- Disagreements
between them can lead to gridlock

 Semi-presidential regimes
o Combine directly elected president and a prime minister
 President- serves in office for a fixed term
 Prime minister- responsible to parliament

Majoritarian or consensus?

 Majoritarian democracies:
o Organized to facilitate majority rule
o Involve disproportionate elections
o Produce one-party/ two-party systems
o Tend to have unitary and centralized government
o Legislatures likely to be unicameral
o Limited judicial review

 Consensus democracies:
o Organized to protect minorities
o Embrace coalition governments
o Adopt proportional electoral systems
o Produce multiparty systems
o Legislatures likely to be bicameral
o Strong judicial review

Factors that influence the existence of democracy

 SOCIAL SEMINAR 1: DEMOCRACY AND GLOBALIZATION

 Structural factors
o Modernization theory claims that economic development promotes
democratization
o Theories of inequality underscore that social inequalities hinder it
 Institutions
o Critics of presidentialism say presidential democracies are more likely to
break down than parliamentary democracies
o Students of authoritarian regimes claim that dictatorships with parties and
legislatures are more resilient than military regimes

 Political actors
o Individuals and organizations exercise agency in the transformation of
political regimes
o Leaders committed to democracy foster transitions and resist breakdowns

 International forces
o External factors influence domestic democratization through:
 Contagion
 Diplomatic action of international organization
 Foreign aid to support domestic democratic groups

Liberal Democracy and the End of History

The End of History- Francis Fukuyama

What does it mean for history to be driven by ideas?

 'Ideas' are what have divided history into the periods which it is divided
 'Ideas' are what have led to key events in history
o Cold War period was driven by the conflict between capitalism and
Communism
o The age of the Enlightenment was driven by the emergence of ideas of
equality, justice

'The end of history: The end point of man's ideological evolution and the universalization of
Western liberal democracy as the final form of human government

Class Notes: Fukuyama- The end of history

 A piece that links history with great traditions of political thought

 A starting point to examine the fate of liberal democracy before hyper-globalisation
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The text in historical context

 Text written before the Fall of the Berlin Wall, the collapse of the USSR….
 1989- A global historical moment
o East vs West Cold War
o Globalization of the Cold War meant that the collapse of Soviet rule in Eastern
Europe reflected wider changes taking place across the globe
o Important developments taking place before and after 1989 (Latin America,
Africa, Asia)

 1989 in Europe
o The fall of the Berlin Wall
o Collapse of Soviet rule in Central and Eastern Europe
o Beginning of the collapse of the Soviet Union (1991)

The end of history:

 The end point of man's ideological evolution and the universalization of Western
liberal democracy as the final form of human government
 Fukuyama dates the end of history at 1806- The Battle of Jenna

How does Fukuyama define liberalism?

 The recognition and protection of freedom through law

How does Fukuyama define democracy?

 Having consent from the people

Debating the future of liberal democracy

Podcast- Fukuyama on History

Overview

 1989- Fukuyama's 'The End of History' declared the triumph of liberal democracy on
the world stage
 Episode is an analysis and exploration of this claim

Main points
 Fukuyama is not a triumphalist or a prophet
 The end of history refers to the highest point in history, not to an actual end in history
 The end of history- goes back to the 19th century- Hegel
 Liberal democracy as a form of politics leaves politics nowhere else to go
 Fukuyama remains convinced that liberal democracy is the best form of government
 The end of history and the last man
o 'The last man'- Idea originated from Nietzsche
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o What might happen to us if we lose our human qualities?- Nietzsche

o What might happen to us in the era in which liberal democracy is triumphant?-
Fukuyama
 Will we just drift along history?
 What will happen to us if we no longer develop new ideas?

 2 models of society at the end of history

o Japan
 Represented a safe, stable, slightly boring future
 Japan is not 'flowing along' in history
o The European Union- Representation of the future at the end of history
 Securing the successes of the triumph liberal democracy
 Seemed unimaginative, dull
 Does not entail the possibility of political transformation
 Now fragile, fractured, a victim of its own hubris
 EU politics, nonetheless, carry a lot of weight

 Advantages of liberal democracy

1. Prosperity- Liberal democracy produces the best outcomes
2. Respect- Liberal democracy gives people dignity in the form of a voice

o Liberal democracy entails that liberalism and democracy are linked

o Liberal democracy leads to prosperity, freedom

 What are the challenges to liberal democracy that exist currently?

o Marxist Communism- the Chinese model
o Digital technology - the more people say what they think, the harder it will
become for elected representatives to produce desired outcomes

 Institutional structure of liberal democracy has not changed

o Institutions look like they are stuck
 They do not change
 They do not allow for change

 The end of history does not mean the end of the human journey or that something new
may not arrive at some time
o Modern politics has been heading in the same direction and towards the same
destination- the modern liberal democratic state
o What happens when we get there?

 Harari
o History is the story of human agency
o History comes to an end when artificial agency (AI) takes over human agency
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 David's conclusion
o We haven't reached the end of history because we still live in a Hobbesian
world
o We depend on the state to protect us
o We are still battling the question of how to prevent the state from dominating
us
o Can states control artificial agents such as corporations?
o The modern state is not inevitable, and it is not our inevitable fate, although
we still cannot imagine life without it
o We still live in a world which is dominated by the human agency that is the
state

Class Notes: Recap: Fukuyama- The end of history

 The end of history:

o The point at which liberal democracy can overcome all its contradictions and
no other system can provide a better alternative

1. Ideological factors are more important than material factors in explaining history
o 'History is driven by ideas' rather than material conditions

2. A liberal state is a state that recognises and protects the right to freedom through law

3. A democratic state is a state that exists with the consent of the people

4. Liberal contradictions:
o The need for ethnic and national recognition
o Religious emptiness / Spiritual vacuity
o The class issue
o Political/ state weakness - Anomie

5. Alternatives that have been tried out:

o Nationalism
o Religious fundamentalism
o Marxism
o Fascism

Fukuyama on History- Podcast

 What primary virtues do liberal democracies have?

o Prosperity - Production of the best outcomes
o Respect - Respect of the people's voices
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Have other contradictions/ challenges appeared in liberal/ democratic societies that were
unrecognized back then?

 Artificial intelligence
 Immigration
 Climate change
 Identity politics

Forms of economic integration I

Globalisation:
 The growing interdependence of the world's economies, cultures, and populations,
brought about by cross-border trade in goods and services, technology, and flows of
investment, people, and information

 The opening of international borders to increasingly fast flows of goods, services,

finance, people, and ideas

 The changes in institutions and policies at national and international levels that
facilitate or promote such flows

 A multi-dimensional process; not solely economic or political

Economic Integration:
 An arrangement among nations to reduce or eliminate trade barriers and coordinate
monetary and fiscal policies.
 Deep economic integration is what has made it possible for us to enjoy products such
as Apple computers, I-phones, but also such diversity inside classrooms
 One way to measure economic integration is to examine each country's exports

Faces of globalization: It is dynamic and complex and has multiple dimensions

 Economic: Changing patterns of production, distribution, and consumption of global
financial markets
 Social: The growth of social networks, migration flows and diaspora communities
 Cultural: The rise of global culture, mass media and the 'globalization' of goods
 Political: Global governance and action and its domestic implications
 Environmental: Changing patterns of consumption, which cause resource depletion
and environmental damage
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Over the time period in which the world has become more liberal and democratic, it has also
become more economically integrated. The key question has arisen: Does international
economic integration go hand in hand with democratic consolidation? Some say it does, but
the issue is very much debated

Basic Economic Concepts

 Economic openness:
o The degree to which the situation of domestic agents and their decisions are
affected by foreign developments

 Trade openness:
o The degree to which a country's trade is open to the rest of the world, or the
importance of international transactions relative to domestic transactions
o Trade openness index: The sum of world imports and exports divided by
world GDP
o A measure of how economically integrated countries are

Forms of economic integration II

Global Capitalism- Its Fall and Rise

 New technologies, new ideas

o Technical developments have strengthened supporters of global economic integration
o Technological innovations have reduced production, exchange, and investment costs
o New inventions have had their most powerful globalizing impact on finance
o Continued growth in the world economy has also been important to global integration
o New technologies and flourishing international trade and finance have not been
sufficient on their own to confront entrenched ideologies and political positions

o 'Monetarism'/- The preferred macroeconomic policies of those who attack government

involvement in the economy
o Conservatives like Thatcher and Reagan pushed for the privatization and deregulation
of companies owned or controlled by the government
o Anti-inflation movement which urged governments to privatize or deregulate large
portions of the economy

o 'The Washington Consensus' - Free market

 Neoliberal movement
 Embraces anti-inflationary austerity
 Desires tax and spending cuts
 Desires privatization and deregulation
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 Globalizing Interests
o The turn towards free markets had tangible sources in politics and economics
o 1980s- Population lost patience with rising prices
o The globalized economy allowed newly industrializing nations to take advantage of
cheap labour to produce goods

 George Soros Makes Markets

o George Soros epitomizes global markets and profits from the gradual revival of global
finance

o Malaysian PM Mahathir accused Soros of bringing his country's economy down-

thereby expressing the broadly held view that global capital markets have gone too far
in constraining government policies

o Soros argues that global capitalism will be safe only if attention is paid to national and
social concerns
o He holds that the international economy requires a better social and political
infrastructure and new international institutions
o He also insists on more effective regulation of global investments and their effects

o His views are backed by the fact that markets often need governments to stabilize
them

o At the end of the 20th century Soros represented both the achievements and anxieties
of international finance

 Trade Unblocked
o There has been a turn towards economic openness in Eastern and Central Europe
o From an economic point of view, North America and Western Europe defined the
world's course

o Emergence of two large trading areas

 EU, including Central and Eastern Europe, the former USSR, and former
European colonies in Africa and Asia
 The US, including the Western Hemisphere

o Regional integration has become an important component part of the overall process
of economic globalization
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o The advanced industrial world created continental markets in Europe and North
America
o The interests and ideas favourable to economic globalization dominated world
economics and politics
o The globe became capitalist again, and capitalism became global again

Class Notes: Trade Openness

 Trend: Expansion of free trade between countries and regions

o Facilitated by the growth in the number of types of trade agreements between
countries
 E.g., preferential trade agreements: Trade pacts that reduce tariffs
between the participating countries for certain products

 The expansion of international trade has been underpinned by global supply chains
o Global supply chains: The cross-border organization of the activities required
to produce goods or services and bring them to consumers through inputs and
various phases of development, production, and delivery

Takeaways
 Most countries that export goods to a country also import goods from the same
country
 Global production networks have made countries and companies more dependent on
each other
 Domestic economic policymaking has been increasingly shaped by external-global
developments

Financial openness

 Finance: The management of large amounts of money, especially by governments or

large companies
 Financial market: Any place or system that provides buyers and sellers the means to
trade financial instruments
o Facilitates the interaction between those who need capital and those who have
capital to invest

 Financial openness: Ratio of the stock of cross-border assets (A) and liabilities (L) by
GDP

 The backdrop to financial integration was the liberalization of capital flows

 SOCIAL SEMINAR 1: DEMOCRACY AND GLOBALIZATION

o Free capital mobility: The removal of barriers to movements of capital across

countries and jurisdictions

Takeaways
 Financial integration is large among developed economies, and it has taken place
rather fast in historical perspective
 Financial globalisation has been uneven- the gap between developed and emerging
economies is big (de-coupling)
 Epicentre: Liberalisation of financial flows and financial institutions

Economic Globalisation: Trade + Financial Openness

 Defining feature of the global economy- Interdependence

o National economies are increasingly dependent on one another
 The growth of a national economy is increasingly dependent on the economic
performance of other countries
 Increased reliance on trade
o Interdependence is different from openness

Material drivers of this wave of integration

 Technical and technological changes
 Innovations in transportation and telecoms which reduced the costs of international
exchange
o These innovations facilitated international economic integration: It made
cross-border exchanges easier, cheaper, and faster

Hyper-globalisation

Hyper-globalisation: A phase in globalization that began in the 1990s and continued into the
21st century, which is characterized by an unprecedented expansion of trade, investment, and
capital flows across national borders, driven by technological advancements, market
liberalization policies, and the growth of multinational corporations

Debating the future of globalisation

The risks and consequences

The 2008 Financial Crisis

 Caused by worrying too much about trade imbalances, and too little about finance
 SOCIAL SEMINAR 1: DEMOCRACY AND GLOBALIZATION

 Financialization
 Oversized financial sector
 Overindebted financial sector

 Was not neither an US-China crisis, nor American only

 Global reach but transatlantic origins
 Particular financialization- Hyper-securization, over-sized and over-indebted financial
sector

Democracy and globalisation- To what extent are they compatible?

Globalisation
 Openness - the degree to which international developments affect domestic decisions
 Integration
 Interdependence
 Similar economic templates / models
 Free flow of goods, capital, and finance
 International laws
 Trade treaties
 Multilateral institutions

Liberal democracy
 Respect for civil liberties
 Consent from the population
 'Government of the people, by the people, for the people'
 National laws, politicians, parties
 Domestic interests

No elected central government - No global governance

Political consequences of deep economic integration but national governance

 The euro and the Eurozone crisis

o 2008 crisis- Countries under the euro experienced the worst economic crisis in
years, without the power to control or issue a new currency

 Crumbling of the political mainstream

 Rise of the new and the extremes

Democracy and globalisation- The optimist view

 SOCIAL SEMINAR 1: DEMOCRACY AND GLOBALIZATION

FT Article: Why Globalism is Good for You

 Key distinction between globalism and globalisation

o Globalisation: Word used by economists to describe international flows of
trade, investment, and people
o Globalism: Word used by demagogues to suggest that globalisation is an
ideology- an evil plan designed by the rich and which harms ordinary people

 Takeaways
o There's nothing fundamentally wrong with globalisation, so why criticise it?
o Economic benefits: cheap products, mass consumption and the middle class
o Globalism is a word used by demagogues
o Discrediting of anti-globalists
o Political argument: Globalisation brings political stability; de-globalising the
world will create more competition and therefore more instability
o Main risks: War between the US and China

Globalism as an ideology: The term has been used to describe

 The over-arching foreign policy of the US after WWII

 A broad tradition of global brotherhood that pre-dated the two world wars and that
motivated support for the League of Nations, the United Nations, and other
aspirational attempts at global government or governance
 A varied but coherent neoliberal ideology that sought to offer a free-market
alternative to Keynesian or Marxist-inspired economic theories in the mid 20th
century
 The post-Cold War foreign policy pursued by the United States, where the War on
Terror quickly came to replace the fight against Communism as the justification for a
massive global military and corresponding military-industrial complex
 Market globalism came to represent the ideas and processes associated with the
economic hyper-globalization that began in the 1990s. It embodied in the expansion
of American capital and industry into previously restricted foreign markets

In short….

 A broad array of ideas, material processes, elite networks, corporate and

intergovernmental organizations, laws, and norms that could be associated with
globalization
 Utopian ideology of worldwide peace and prosperity under a benevolent global
regime 1
 SOCIAL SEMINAR 1: DEMOCRACY AND GLOBALIZATION

The Globalists
 The people and institutions who have held the most optimistic views of globalisation
and its effects
o The UN
o The World Bank
o The World Trade Organization
o The International Monetary Fund

Democracy and globalisation- The pessimist view

Recap: The Optimist View

 Right-wing anti-globalism tends to argue that globalization is an ideology advanced
by Zionism, Marxism, and liberalism
 Globalization is presented as a worldwide conspiracy against national identity,
Western culture, or the white man. Such arguments frequently have racist and anti-
Semitic implications
 Neoliberal globalization would be the result of a conspirative political plan by
powerful elites
 Supporters of left-wing anti-globalism argue that the capitalist logic underlying
globalization results in asymmetrical power relations: domestically and worldwide
 Under this globalist logic, every aspect of life, including health, education, and
culture, would be treated as a commodity

The Pessimist View

Attacks to the principle of economic globalisation come from all parts of the ideological
spectrum
Protests that demonstrate the discontent against globalisation:
 Seattle, World Trade Organization Protests, 1999
 Geona, G8 Summit Protests, 2001
 Porto Alegre, World Social Forum Protests, 2001, 2002, 2003
 Davos, 'Contra World Economic Forum'

Main arguments against globalisation:

 Loss of jobs
o The creation of cheaper labour markets has led to the loss of jobs and thus
increase in unemployment

 Loss of national sovereignty

o The rise of multinational corporations and international institutions such as the
World Trade Organization have made it difficult for individual nations to
regulate their economies as they see fit
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 Cultural homogenization
o The spread of a series of values and agendas (currently, the Woke narrative),
has led to the loss of cultural diversity and implies, according to some, an
attack against local cultures and traditions

Trump Speech at the UN:

 The future does not belong to the globalists, the future belongs to patriots
 Americans know that in a world where others seek conquest and dominance, our
nation must be strong
 If you want democracy, hold onto your sovereignty and if you want peace love your
nation
 Wise leaders always put the good of their own people and their own country first
 The future belongs to sovereign and independent nations who protect their citizens
and respect their neighbours and honour the differences that make each country
special and unique

 Anti-globalization movement: A transnational protest movement that is global in

character and has a decentralized, networked form of organization

 ATTAC holds that financial globalization leads to a less secure and less equal playing
field for people, favouring instead the interests of global corporations and financial
markets

'Globalization and its Discontents'- Joseph E. Stiglitz

Main critiques:
1. Globalisation has contributed to the rise of inequality
o Proof: Concentrated levels of national income shares
2. Globalisation has accelerated global warming and environmental impact
o Increased transportation of goods has led to increased emissions and habitat
destruction
o Economic specialization can threaten forest health and lead to serious
environmental issues
3. Neo-imperialism: Globalisation is a new form of Western domination: 'Old foe, new
face'

Thomas Piketty

 Globalisation and competition between countries make vertical redistribution more

difficult to organize
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o If the only thing the modern nation-state can do is to control borders, then
unsurprisingly the political conflict will be entirely about border and
immigration
o Link between globalisation and identity politics

 Nothing in globalization makes redistribution technically impossible

 Countries and governments choose to sign treaties with free trade/ capital flows with
no common redistributive taxation/ regulation. Where do these choices come from?

 Some ruling groups must believe that the system is working fine, and that the benefits
of competition between countries outweigh the costs

Globalisation and democracy- The trade-offs

RODRICK- THE TRADE-OFFS OF GLOBALISATION

Advantages

 Great benefits for China

o 400 million people in China have been lifted out of poverty thanks
o 'Poverty eradication campaign'
o New job opportunities

 Benefits for skilled engineers

Disadvantages

 Fear for the economic future of other countries such as the US

 Increased competition for less skilled workers
o Less employment
o Less income
 If you're going to have a global market, who is going to provide those institutional
underpinnings?

Trilemma- The trade-offs between

 Hyper-globalisation
 National sovereignty
 Democratic politics
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'You can have at most two of the three, you cannot have all three simultaneously'

The History of Globalisation viewed through the Prism of the Trilemma

 19th Century - Early globalization

o GB, the US effectively enforced the rights of investors and ensured a free flow
of capital around the world
o Golden straight jacket

 Bretton Woods Compromise

o After WW2
o Keynes- We need a regime that combines national sovereignty with
democratic politics, which required keeping hyper-globalization at bay

 Possibility- Global federalist equivalent of the US -The EU?

o The troubles the Eurozone faces today are a result of this trilemma

ARTICLE- HAS GLOBALISATION GONE TOO FAR?

 Panglossian economists
o Economists who believe trade globalization has had less of an effect on wage
disparity and keeping wages low than it has. Their arguments are
 Trade is only a small share of the total economy

 We can get a better handle on some of the anxieties that many societies are feeling
with regard to the consequences of globalization

 Emphasis of three issues

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1. International trade operates by changing the elasticity of demand for labour,

because employers can easily substitute away from employing domestic
workers
2. We have to accept that when countries trade with one another, many of their
long-standing domestic institutions and domestic norms can be eroded through
the channel of trade, and this can be a source of the friction that arises
3. Globalization is making it harder for nation-states to finance social insurance
mechanisms, and if the social support systems and safety nets are undercut
while international economic integration exerts greater differentiating forces
on national societies, the domestic political support for expanded trade will
also be undercut

 Protectionism
o Slippery slope argument
 There is no such thing as a tiny bit of protection of the economy

BLOGPOST- HAS GLOBALISATION GONE TOO FAR?

 Globalization has eroded the ability of nation-states to control their own economies
o As globalization increases, countries are forced to conform to the norms and
regulations set by the WTO and the International Monetary Fund
o This limits the ability of governments to protect their citizens from lower
incomes and greater unemployment

 Globalization has contributed to the growing income inequality seen in many

countries
o Globalization has allowed companies to produce at cheaper costs, which has
led to loss of jobs for workers in higher-cost countries
o Globalization has increased the power of multinational corporations, which
can exploit weak regulatory environments and manipulate governments to
further their own interests

 Globalization has contributed to the erosion of democracy in many countries

o As economic power has become more concentrated in the hands of
multinational corporations and international institutions, the power of national
governments has been diminished
o This leads to citizens feeling powerless

Class Notes : Interview: Has Globalization Gone Too Far?

 When?
 SOCIAL SEMINAR 1: DEMOCRACY AND GLOBALIZATION

 The time when globalization was reaching its peak

 Why?
 To relate the insights shared with the concepts discussed in class

 What?
 Rodrick discusses a range of issues: from the impact of foreign competition on
local wages in the US to national strategies to accommodate free trade to
social insurance and compensation policies- all relevant to the debate of
globalization and democracy

 How?
 A very 'economics' text, reflecting how economists tend to reason, the kind of
argumentation and evidence used in economics, and how they settle
disciplinary disagreements

 What are the three mechanisms through which globalization affects domestic labour
markets, according to Rodrik?
 Easer substitution of workers in different nations through outsourcing
 Erosion of domestic norms and institutions through greater economic
openness and interdependence
 States' ability to redistribute and finance social insurance schemes weakens

 What does Rodrik's Trilemma consist of?

 National sovereignty
 Hyper-globalization
 Democratic politics

1. Why is economic integration politically valuable?

 Promise of prosperity for developing countries
 Boosting economic growth by creating larger markets and increased flows of
goods
 Economic interdependence leads to less likelihood of conflict between
countries
 Improving international relations

2. Why is national sovereignty politically valuable?

 It is the foundation of nation-states
 It allows for the defence of each country's citizens
 Provides a sense of national identity
 Makes it easier for each country to ensure order and stability
 SOCIAL SEMINAR 1: DEMOCRACY AND GLOBALIZATION

3. Why is democratic politics valuable?

 Guarantees civil rights
 Protects citizens from abuse on behalf of the state

 So, why are all three incompatible?

 As economic power has become more concentrated in the hands of multinational

corporations and international institutions, the power of national governments has
been diminished

 The fact that economic power has become concentrated in the hands of
organizations such as the WTO and the IMF, national governments have lost their
ability to exercise power over their own economies. This leads to citizens' belief
that their own desires are not being reflected, and thus an erosion of faith in the
functioning of democracy

 Hyper-globalisation requires a global set of rules:

 Who writes these?
 The setting of rules at a global level goes against the principle of national
sovereignty
 Unless these rules are voted for globally, they go against the principle of
democratic politics

 What happens when these global rules clash against each country's national demands?
 A country that values democracy and national sovereignty may have to accept
some limits on its economic integration with the global economy
 A country that prioritizes deep economic integration with the global economy
and national sovereignty may have to sacrifice some aspects of its democratic
political system
 A country that prioritizes deep economic integration with the global economy
and values democracy will have to sacrifice some core elements of national
sovereignty (currency, borders

 In short, there are inherent trade-offs between economic, political, and social goals
 Political leaders and policymakers must carefully consider the costs and
benefits of different policy choices
SOCIAL SEMINAR 1: DEMOCRACY AND GLOBALIZATION