Dhe criticism of globalization in rich and poor countries, which has been increasing for years, goes hand in hand with the question of the role of a policy that reduces the material and immaterial costs of international business that are perceived as unacceptable. About ten years ago, Dani Rodrik described the basic problem in his book “The Globalization Paradox” as an impossible triangle: globalization, democracy and the sovereignty of the nation state are not compatible with each other. In practice, the sovereignty of the nation state is often neglected, and many people are opposed to this, wrote the economist.
It is true, of course, that the globalized world has never been entirely without politics and national considerations. There was no unrestricted free trade, even if the General Agreement on Tariffs and Trade (GATT) passed in 1947 had a pioneering effect on the opening of international markets, as did the World Trade Organization (WTO) founded in 1995. Nevertheless, a number of even more far-reaching bilateral agreements, such as the notorious Transatlantic Free Trade Agreement (TTIP), have not materialized.
The “Washington Consensus”, which was coined by the International Monetary Fund and the World Bank and named after a conference in 1990, contained policy recommendations for national governments shaped by a liberal spirit. However, many countries have pursued interventionist industrial policies even in the globalized world. The People’s Republic of China is a particularly impressive example, but even the earlier economic rise of Southeast Asian countries such as South Korea was not the result of a pure market economy. Of the traditional industrial nations, Japan in particular has retained significant state influence.
Today in many countries there is an incomparably greater demand for active politics than in 1990. Such politics, however, are not easy to pursue. An important source of the call for a more active state is poorly managed structural change in rich nations. The closure of industrial companies in former strongholds such as the American “Rust Belt”, central and northern England or the northern Franco-Belgian Basin left the impression of regions with numerous losers, while structural change in the German Ruhr area was more successful, but also took a lot of time , lots of money and lots of pain. In contrast, numerous emerging countries benefited from industrialization.
Comparing the per capita incomes of Italy and South Korea (see grafic) illustrates the dynamics of change in recent decades in favor of an up-and-coming country like South Korea. Not only has South Korean per capita income multiplied over the past half century. At the same time, the population has grown from 32 to 52 million people, and the standard of living has improved significantly: from 63 years between 1970 and 1975, the average life expectancy was 81 years between 2010 and 2015. This is what often underestimated success stories of globalization look like.
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