No country is an island unto itself

The Greek crisis has provoked fresh worries about globalisation. But unlike the schadenfreude that greeted Asias financial crisis of 1997, the turmoil in Europe is producing less lecturing and more angst-ridden self-examination. If the Asian crisis was explained away by crony capitalism and greed, the upheaval in Greece is holding up a mirror to more than one over-leveraged western government. American analysts worry that Greece may be a precursor of what is in store for the debt-ridden US. Taking this concern further, Harvard economist Dani Rodrik even wonders whether the Greek crisis is forcing countries to choose between globalisation and democracy. With due respect to the professor, I would humbly submit that there is no such choice in the real world. In a recent column, Rodrik has returned to his theme of the political trilemma emerging from the Greek crisis. He argues: Economic globalisation, political democracy, and the nation-state are mutually irreconcilable. For him, economic globalisation boils down to global capital flows. In order to ensure that this flow continues, sovereign states will have to surrender some of their independence in monetary and fiscal policy making. Without stating the obvious, he implies that this surrender of sovereignty would be unacceptable to a democratic electorate. The options to emerge from this 'trilemma are the suppression of democracy or the abandonment of globalisation. Those wishing to have both globalisation and democracy have no option but to embrace the internationalisation of democratic politics or, as he puts it, a global version of federalism. The simplicity of stark choices and Rodriks clever phraseology makes his thesis an intuitively seductive one. However, there is clearly much truth in what Rodrik says about the power of the global markets and the buzz-saw of opposition it has run into countless times since the anti-globalisation riots in Seattle in 1999. The anti-globalisation protests that have greeted almost every meeting of the WTO, IMF and World Bank have been a constant reminder of democratic opposition. No such protests have been seen in China providing 'Exhibit A for his thesis about globalisation working well with autocratic regimes. There is no doubt either that for global integration to proceed without obstacles, greater political coordination is required. Rodriks thesis becomes untenable when he presents globalisation and democracy as straightforward options that can be accepted or rejected at will. If we push for globalisation while retaining the nation-state, he says, we must jettison democracy. And if we want democracy along with globalisation, we must shove the nation-state aside and strive for greater international governance. This stark view of globalisation, as but one of the options available to sovereign governments, only works if the phenomenon is straitjacketed into meaning only 'mobility of capital. But in reality, globalisation is a historical process that has grown over the millennia, increasingly tying the world in thicker webs of trade and travel. Far from representing notional dollars or euros rocketing around the globe; globalisation or growing connection has transformed every aspect of life. There have, of course, been exceptions, when countries resisted joining the integrating world: the Hermit Kingdom of Korea in the 19th century or Kim Jong Ils Democratic Peoples Republic are recent examples. But, for most of the rest of the world, withdrawal into the national shell is simply not an option, even though capital flow may dwindle or stop for a period as it has many times and was threatened in Greece. Neither can capital flows be separated from the trade and travel that make up todays globalised world. Rodriks notion that countries may have to jettison democracy in order to be part of a globalised world is equally unrealistic. The march of society towards greater freedom and an accountable government has encountered many bumps but it is hard to imagine that the leaders of any established western democracy would embrace military dictatorship in order to ensure overseas capital flows. Even if some politicians were tempted to suppress democracy in order to keep global funds flowing, the outcome could be just the opposite. Khaleej Times

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