Contrary to the triumphalism of the last few years,3 this ideological battle has not been conclusively won by laissez faire. And any cost-benefit analysis of globalisation turns on where one stands along an ideological spectrum from laissez faire to dirigisme.
The third charge reflects a more normative philosophical argument about the impact of globalisation on the structures of modern society. It argues that globalisation is undermining the ability of governments to provide a legitimate social bond between governors and the governed. It is a problem that affects not only developing countries but developed ones as well, if indeed not more so given the more advanced state of the national social bond. It argues that in the absence of a social bond at the national level, we currently lack the institutions capable of substituting for them at the global level. .
The paper is in four parts. Part 1 outlines an economic definition of globalisation as economic liberalisation and makes the strong case in favour of it--that it generates faster aggregate growth than other forms of economic organisation. Having done this, Part 2 identifies the limits to liberalisation--especially its tendency to generate more frequent, wider and deeper economic shocks and uncertainty and to expose weaker (emerging) economies to the vicissitudes of global financial markets lacking adequate institutional defensive capability in times of crisis. Part 3 looks at the impact of globalisation on the social bond and, by extension, on our ability to provide for governance with justice in the global economic order in the next millennium. Part 4 draws seven lessons for the future that emanate from the identification of these costs and the Conclusion argues that the failure to upscale a normative commitment to greater global justice will remain a permanent Achilles heel to containing a growing back lash against globalisation.
