Trade Politics, a Politics of Illusion

New Approaches and Perspectives

By Sheldon Birkett

On December 18, 2017, Canadian and British governments materialized in front of a U.S. trade tribunal arguing against Trump’s aggressive countervailing duties on Bombardier’s C-series jet. [i] The Canadian Ambassador to the United States, David MacNaughton, said the imposition of up to a 300 percent countervailing duty is illegitimate speculation premised on pure conjecture. [ii] This is one of the latest developments in the pro-protectionist populist backlash against the historic trend of global economic liberalization (circa. 1945).

The politics of trade protectionism must not be viewed in isolation from globalization, rather, protectionism is part of globalization. Irrespective of the variants of populism, which now pierces through the frontiers of domestic politics into global politics, globalization has perpetuated horizontal and vertical socio-economic global inequalities. Globalization in its entirety is a multifaceted and illusive concept, which is ambiguous when examining it as a singular comprehensive topic. Instead it is more practical to study the elements of globalization (i.e. economic liberalization, supranationalism, populism, integrated national policies etc.) in isolation then bring such topics together under a multifactor framework of analysis. This frame of analysis is similar in going from a partial to general equilibrium analysis in economics, but rather from a multidisciplinary approach. However, a complete comprehensive assessment of globalization could not be adequately portrayed in this article for sake of brevity, for that reason I will only examine the effects of trade liberalization on the politics of trade.

Like any good trade model measuring the welfare effects of trade on the factors of production (capital, labour, land) it is necessary to start with the stolper-samuelson theorem as the theoretical backbone for the welfare analysis of trade liberalization. The stolper-samuelson theorem states that the relatively abundant factor used relatively intensively in production benefits from trade liberalization, while the relatively scarce factor used relatively non-intensively in production does not benefit from trade liberalization. [iii] In other words, an increase in the relative price of labour-intensive goods will increase the wage rate and reduce the (capital) rental rate relative to both commodity prices (i.e. labour and capital-intensive goods). The stolper-samuelson theorem works because according to the ricardian trade model the price of the good that has a comparative advantage increases, while the price of the good that does not have the comparative advantage decreases, when free trade occurs between two countries.

The simple insight that the stolper-samuelson model provides, when it comes to the welfare effects of trade, goes a long way in explaining both the recent rise in resentment and prejudice against global trade liberalization. However, the stolper-samuelson theorem in reality does not act in isolation from other macroeconomic phenomena, such as global finance. Therefore, why does trade face the brunt of accusations in the backlash against globalization? To answer this question it is necessary to steer away from the topic of economics and focus on the ethics behind why individuals – in the west – can justify financial risk adverse behaviour, which has resulted in one of the largest moral hazards in history (i.e. 2008 financial crisis), while not justify the minor economic consequences of free trade. The divergence between justifying financial risk adverse behaviour versus not justifying the negative consequences of free trade is certainly an arbitrary assessment. Professor Dani Rodrik at Harvard University’s John F. Kennedy School of Government found that individuals resisted free trade when it resulted in job losses as a result of unfair trade practices, as “It’s one thing to lose your job to someone who competes under the same rules as you do. It’s a different thing when you lose your job to someone who takes advantage of lax labor, environmental, tax, or safety standards in other countries.” [iv] Free trade under the same regulatory rules underpins the “fair trade” argument, however it is equally important to recognize that when barriers (i.e. countervailing duties, quotas, production subsidies) arise due to “unfair trade practices” they are often met with political buyins that distort the gains from trade. [v]

The politics of free trade shows that people suffer from a sense of “adiaphorization” of perception, when there is a disconnect between a person’s behaviour and the outcome (or effect) of their action. Adiaphorization is also referred to as the “disappearance of [individual] responsibility as a result of the division of labour.” [vi] This is most commonly illustrated in collective action failure problems. For example, the divergence between an individual’s action and the accumulated effects of his or her action(s) adding to the negative consequences of climate change (e.g. pollution). As such, people’s perception of free trade is heavily disconnected from the real economic implications of trade liberalization policies. In the 1990’s U.S. advocates for the North American Free Trade Agreement (NAFTA) professed the extraordinary benefits NAFTA will have for North American productivity, competitiveness, and economic growth. However, a 2003 study illustrated that NAFTA would at most contribute to 0.5 percent of GDP growth in the United States once the agreement became fully integrated. [vii] Similarly, for Canada and Mexico the NAFTA narrative is mixed.

Despite the modest economic gains attributed to NAFTA, the public perception of free trade has hit a wall. No, this is not Trump’s physical wall with Mexico, but it is an inherently ideological, populist, idiosyncratic anti-trade barrier that has been steamrolled by demagoguery political ideals.

The recent anti-NAFTA political reaction in the United States and other western liberal democracies represents a divergence between people’s perception of FTAs, filtered through ideological lenses, and the real aggregate implications FTAs have on the overall economy. In essence, this has been the crux of trade politics as a politics of illusion. Despite the divergence between perception and effects of FTAs this does not entail that citizens’ reactions against FTAs, such as NAFTA, are inherently justified. Similar to individuals support for or against FTAs justified as being fair or unfair agreements, it is possible to justify people’s perception of FTAs (for or against free trade) depending on the political alignment of the population. This is to say even if free trade has no negative welfare impact on a person’s wellbeing, perhaps can even be beneficial, individuals will still choose to support or not support FTAs based on their own political/ideological alignment. For example, anti-free trade support based on political alignment has recently been seen across most western liberal democracies with the rise in right-wing (and left-wing) political parties. Surprisingly, the most developed countries have not been immune to trade politics as a politics of illusion.

In considering trade politics not just as the politics of utility maximization, but as a politics of illusion filtered through ideology, much of the economic models used to understand the welfare effects of trade liberalization have become obsolete. Much to the same degree how protectionism must be viewed as part of the tension of the globalization process, and not as globalization’s antithesis, a multidisciplinary approach is inherent in the study of globalization. In terms of trade politics, a multifactor approach spanning across both political science, economics, literary and cultural studies is essential. In this regard, trade politics as a politics of illusion is an exemplar of such an approach.

Featured Image Source: Wikimedia Commons – Claude Lorrain Painting of “Port Scene with the Villa Medici” depiction of  17th Century Mercantilist International Trade.


i. Adrian Morrow & Nicolas Van Praet, “Boeing, Bombardier battle up in final U.S. hearing,” The Globe and Mail, December 18, 2017,
ii. Ibid.
iii. W. Stolper & P. Samuelson, “Protection and Real Wages,” The Review of Economic Studies, 9, no. 1, (1941): 58-73,
iv. Dani Rodrik, “Populism and the Economics of Globalization,” John F. Kennedy School of Government Harvard University, August 2017, page. 15,
v. Ibid, 16.
vi. Harald Welzer, “Climate Wars: Why People Will Be Killed in the 21st Century,” Polity Press, page. 16.
vii. M. Angeles Villarreal & Ian F. Fergusson, “The North American Free Trade Agreement (NAFTA),” Congressional Research Service, page. 16,


Ontario Increase in Minimum Wage: A Phillips Curve Analysis

Editorial Commentary

Ontario Increase in Minimum Wage: A Phillips Curve Analysis

By Sheldon Birkett

Preached by business associates, CEO’s, and the wealthy elite, is often stated that an increase in the minimum wage increases long term unemployment, costing the working class. Ontario’s initiative to increase the minimum wage to $15 per hour is a sign that the realities of precarious working conditions, and the adverse effects of globalization are finally starting to be understood by policymakers.

The neoclassical rational expectations model of contemporary economics is still widely believed in as a macroeconomic “law” when it comes to the minimum wage. When people talk about minimum wage increases, individuals fail to consider the fundamental negative relationship between inflation and unemployment: the Phillips Curve. Popularized by Paul Samuelson and Robert Solow as a menu of policy options, the Phillips curve is highly regard as a foundational principal of macroeconomics. Economists such as Edmund Phelps and Milton Friedman, took the idea of the Phillips curve, and used the Phillips curve to further promote the centralized importance of monetary policy and the rational expectations model of macroeconomics. Many say that the direct correlations between inflation and unemployment are not as coherent as one may expect them to be, often characterized as an argument against Freidman’s rational expectations model. Despite the naysayers of the rational expectations model, it can very well be considered that a rational expectations theory can be utilized to justify increases in the minimum wage; implying, a minimum wage increase would hold unemployment constant to the long-run trend with a low sacrifice adjustment ratio.

Phillips Curve image

The explicit reasoning of applying a rational expectations model to justify increases in the minimum wage, is due to the neutrality of the unemployment rate around the “natural rate of unemployment.” The “natural rate of unemployment,” is more accurately defined as the “nonaccelerating inflation rate of unemployment,” (NAIRU).[1] The NAIRU is often assumed to be “fixed” or constant in nature, though such an assumption about the macro-economy can be misleading. The NAIRU is determined by real factors affecting the supply and demand for labour, such as demographics, technology, unionization, labour regulation etc. Any variation experienced in the real factors will affect variation in the NAIRU, though the exact deviation of NAIRU variation from the mean NAIRU, is often unknown. The World Economic Forum reported that the difference between British inflation rates and Ireland inflation rates was only 0.05 percent, though the standard deviation between the measures was excess of 2.5 percentage points, which implied (with a 95 percent confidence interval) inflation between Ireland and Britain was 10 percentage points wide.[2] Given the ambiguity in variation of the NAIRU measure, it is difficult to determine the long-term “real” affect an increase in the minimum wage would have on unemployment.

It is true the initial impact of a spike in minimum wage, such as to $15, will increase unemployment; though, it is often overlooked that an increase in the minimum wage will also enhance labour productivity. The mixed results of an immediate minimum wage increase often leads policy officials to reconsider minimum wage increases. If the minimum wage increase is projected on a long-run trend, it is possible to see that an increase in minimum wage will effectively increase inflation, though, the negative externalities inflicted on employment will not persists. At first, the wage increase will increase aggregate demand, increase workers bargaining power, and eventually increase consumer prices, raising the consumer price index (CPI) and inflation. As projected time and time again, there will initially be a decrease in unemployment, advent of experiencing greater aggregate demand. This trend of lower unemployment will eventually return to the natural rate of unemployment (NAIRU) once consumer expectations are adjusted. The time horizon it takes for peoples expectations, to adjust back to the long run trend is debatable. It is certain that an increase in the minimum wage will not increase unemployment in the long run, but in affect, result in lower unemployment rate in the short run. The relational concept of inflation and unemployment rates to increases in the minimum wage is widely misunderstood and overlooked. The importance of the Phillips Curve relationship should not be underestimate in macroeconomics, when considering increases to the minimum wage.

Given the findings about the Phillips Curve, it is apparent that many of the criticisms against a minimum wage increase are inherently embedded in class politics. From a business perspective, it is self-evident that an increase the minimum wage would be cutting away at marginal profits. Individual businesses fail to analyze the return of benefits from a minimum wage increase on the collective economy, and is a classic fallacy of viewing the economy as non-cyclical in nature. Respective on minimum wage increases, it is apparent that precarious labour conditions cannot persists in a globalized economy.

[1] Kevin Hoover, “Phillips Curve,” The Concise Encyclopedia of Economics, 2008,

[2] Stefan Gerlach, “Why the Phillips curve still works for Ireland,” World Economic Forum, July, 22, 2015,

Image Taken from Wikicommons

Venezuela: The Inevitable Crisis?

Opinion Editorial

By Sheldon Birkett 

Last Thursday the United States imposed unprecedented sanctions upon the Venezuelan Supreme Court chief judge, Maikel Moreno, for his involvement in the devolution of the opposition led Venezuelan National Assembly. Despite the actions of the U.S. supporting opposition, the devolution of the National Assembly was necessary for the stability of the Venezuelan state against an opposition-led coup. Leopoldo López, the leader of the right-wing opposition party Primero Justicia, was imprisoned in 2015 for inciting violence against Venezuelan citizens. Many supporters, including the current leader of the opposition Henrique Capriles, declare López 14-year prison sentence unconstitutional. Respective of the so-called “authoritarian dictatorial regime” of the Maduro administration, declared by many mainstream western media sources, it is necessary that the Venezuelan government maintains stability in the region: especially in defence of a democratically elected Maduro administration.

Respective of the “authoritarian” conditions imposed by the Venezuelan government, many Venezuelans still have the right to protest the government in defence of their rights. The incurring violence in the streets of Caracas is a result of opposition led forces demanding for a presidential election to occur as soon as possible, given the fact that in 2016 Maduro did not have a recall referendum on the previous presidential election. Maduro suspension of the recall referendum was granted after it was discovered many of the opposition petition signatories were fraudulent. Despite the opposition calling for an immediate presidential election, a recent public opinion poll by Hinterlaces claims that 65% (p<0.05) of the population claims to agree that the presidential election should be withheld till 2018[1].

Although the suspension of many municipal elections by the Maduro administration were democratically uncalled for, the stability of the Venezuelan state is paramount to maintain in the face of an opposition force that is not willing to negotiate a settlement with the Venezuelan government. In spite of the crumbling of Venezuelan democracy, it is important to remember that Venezuela was suspended from the MERCOSUR common market in 2016, and is currently experiencing unprecedented levels of inflation (over 480 percent as estimated by the IMF). Now the Organization of American States (OAS), spearheaded by secretary general Luis Almagro, is considering suspending Venezuela’s membership from the OAS on May 31st, 2017. Clearly, the political situation in Venezuela is reaching a tipping point, which is all compressed under a five-billion-dollar current account deficit and the inevitable outcome of economic insolvency: despite Venezuela not holding any external debt to the International Monetary Fund (IMF). If the current political-economic environment persists in Venezuela, intervention by the international community will be necessary in the name of upholding a normative internationalist framework to protect a legitimate government against an illegitimate movement advocating regime change. Venezuela in the past has proven sound fiscal and monetary economic policies, social welfare initiative (i.e. misiones), and has shown resilience against unconstitutional coup attempts. Despite the persistent violence on the streets of Caracas, the stability of the Venezuelan government must not be jeopardized at the expense of the instability of the Venezuelan state.


Featured Image Taken From Wikimedia Commons 

[1] “65% “de acuerdo” en esperar elecciones presidenciales de 2018,” Hinterlaces, April 30, 2017,

The Political-Economy of Kalecki

The Politics of Full Employment


By Sheldon Birkett

Would an increase in wages decrease corporate profits or increase prices? This is one of the central questions behind Michal Kalecki’s article Political Aspects of Full Employment published in 1943. Ultimately, Kalecki theorized the effects of Keynesian stagflation in the 1970’s and the rise of neoliberal “TINA” economic policy, foretelling the demise of the Bretton Woods global economy from a debtor to creditor paradise (Blyth, 2016).

Living in a time (2017) of increasing global political-economic uncertainty, in a world facing the rise of populist politics, precarious labour conditions, deregulated global financial markets, increasing intrastate inequality…etc, it is becoming increasingly paramount for the global citizen to ask “How did the state of the world end up in the present condition?”. In answering such a question, it is necessary not to ignore the role of inadequate common sense economic policy played in developing illusionary narratives of how “should” the macro-economy function. Through analysis of Michael Kalecki’s Political Aspects of Full Employment it is apparent that the majority of macroeconomic policy is prescribed through a ‘normative’ (what should be) common sense moral narrative, lacking any substantial insight into the political motives behind economic policy. By critically examining the moral assumptions behind economic thought, it is apparent that a common-sense approach to macro-economics is inadequate in finding solutions to present political turmoil.



Deviating from Keynesian economics Kalecki points out the inherent political problems that arise from sustaining levels of full employment. Kalecki notes that sustaining full employment will increase market demand (as everyone will be buying and spending more with their incomes), and the prices of all goods and services in a market economy will rise. The rise in prices because of an increase in income, will effectively lead to a period of inflation. For the average worker, the macroeconomic effect of full employment is wonderful, as there is a greater availability of work, greater bargaining power, less financial liabilities (as inflation will act as a natural devaluation on loans, mortgages…etc), and an overall increase in economic welfare in the short-run (Kalecki, 1943). For the corporate businessmen, a scenario of macroeconomic full employment is a nightmare as inflation over time will slowly eat away at corporate investments, despite full employment causing no decrease in corporate profits (Kalecki, 1943).

At the heart of the politics of full employment is the shift in political leverage full employment gives labour over capital interests. Apparent from the nature of full employment the business elite class will be against any full employment policy, because a full employment policy would give the working class considerable political leverage in a macro-economy. Therefore, it would be in the interest of the business elite to keep ‘discipline in the factories’ and ‘political stability’ to lower risk on investments and profits (Kalecki, 1943).

Despite the economics behind the nature of stagflation, it is clear that a Bretton Woods system of minimal risk sustaining full employment inherently causes political class conflict. In the wake of the 1975 OPEC crisis and the dismantling of the Bretton Woods economic system, the wrath of anti-inflationary policy was paramount to advancing the neoliberal agenda, as the only inevitable alternative. Reagan and Thatcher in the 1980’s solidified anti-inflationary policy by stagnating wage growth under increases in productivity, resulting in wealth accumulation towards the top 1% of the income distribution. Contractionary anti-inflationary fiscal policy was also aided by expansionary monetary policy, effectively regulating the money supply in maintaining low to negative interest rates. This new ‘neoliberal’ agenda drastically differed from the regulated Keynesian economic model, because of the political-class leverage at stake. Thus, Kalecki’s 1943 Political Aspects of Full Employment effectively foretold the rise of contractionary fiscal consolidation (austerity), in which an alliance of big business would “…induce the government to return to the orthodox policy of cutting down the budget deficit.” (Kalekci, 1943).



Kalecki’s theory on full employment, resulting in the subsequent rise of anti-inflationary neoliberal policies can be seen in the real changes of global income between 1988 to 2008. Economist Branko Milanovic published in a 2012 World Bank working paper, the now-famous elephant graph of the global income distribution (Figure 1.). This graph clearly highlights which part of the global income distribution are the “winners” and “losers” of economic globalization. The vertical axis measures changes in real income (measured in a 2005 baseline prices), the horizontal axis is the percentiles of the world population in income. It is apparent that the top 1% real income increased more than 60% over the past two decades, as well as the 50th to 60th percentiles had an 80% increase in real income (Milanovic, 2012). These “winners” demographically consist of the 60 million richest people, and the middle-class population of the emerging market economics (i.e. China, India, Brazil, South East Asia Nation-States…etc.). The apparent “losers” from policies of economic globalization or “neoliberalism” appear to be the lowest 5% of the income distribution with their incomes remaining relatively stagnated (Milanovic, 2012). Most interesting about the elephant graph is the portion of the income distribution between the 75th and 90th percentile, that have seen the greatest stagnation in income growth. Demographically, the 75th to 90th percentile downward portion of the elephant graph is the American middle class. This downward portion is exactly what Kalecki predicated the political effects of full employment on, and is the reason why Donald Trump is now the president of the United States. The stagnation of upper middle class incomes was a lost battle in favour of international capital investment, playing into the greater narrative of global financialization since 1975.

Figure 1. Change in real income between 1988 and 2008 at various percentiles of global income distribution (calculated in 2005 international dollars)

elephant  Milanovic, Branko. (2012). Global Income Inequality By The Numbers: In History and Now – An Overview –. World Bank’s Research Department, 1-27. Retrieved from,



Thinking beyond the inherent problems of stagflation, income inequality, and political populism is critical not only to advance individual’s political rights and freedoms, but also to protect humanity from existential global crises. Although, a review of Michal Kalecki’s 1943 Political Aspects of Full Employment might seem outdated in its application to the political-economy of the 21st century, the central idea of class conflict premised on political interests in Kalecki’s work is more prominent in 2017 than ever before. The fight over wage stagnation diverging from increasing economic productivity in upper middle class nation-states imposes a political challenge to center-liberal policy makers. Essentially, center-liberal governments are self-imposing a political deadlock between the special interests of capital and labour classes, while serving neither their political aspirations. In response to the center-liberal/liberal internationalist approach, upper middle class citizens around the world are increasingly growing politically disengaged, using their vote for fringe politics as backlash against the last thirty years of the neoliberal agenda.



Blyth, Mark. (2016). Global Trumpism. Retrieved February 20, 2017, from

Kalecki, Michael. (1943). Political Aspects of Full Employment. Political Quarterly, 14 (4), 1-9. Retrieved from,

Milanovic, Branko. (2012). Global Income Inequality By The Numbers: In History and Now – An Overview –. World Bank’s Research Department, 1-27. Retrieved from,



Liberalism and Globalization

Is this the end of Neoliberalism?

By Sheldon Birkett

In a world dominated by an ever-increasing bureaucratic structure it appears that economic globalization is not purely a symptom of political action, but increasingly, economic globalization is the cause of political action. If one is to criticize the basis of economic globalization (most commonly known as market neoliberalism) it is necessary to examine the substantive philosophical arguments which justify an neoliberal policy (or economic globalization). In essence, one must examine the central tendencies behind 18th century Liberalism as the prevailing doctrine of economic globalization. From, studying philosophical thinkers such as David Ricardo, Adam Smith, David Hume, and John Locke it is possible to foretell the unintended (or more likely intended) consequences of economic globalization. Therefore, by looking at the core beliefs behind economic globalization it is possible to derive the political decisions modern day leaders assert. As a preface to understanding the global political-economy approach to globalization it is necessary to take the long dure perspective of global history.



But firstly, before delving into the intricacies of liberalism and globalization, it is necessary to understand basic definitions of globalization. So what is globalization? And to a larger sense how does economic globalization play into the role of 18th century liberalism? There is no definitive answer to what globalization is, as it is multifaceted concept. Most commonly, globalization can be defined as a trans-planetary process or set of processes involving increasing liquidity and growing multidirectional flows of people, objects, places and information as well as the structures they encounter and create that are barriers to, or expedite, those flows (Ritzer & Dean, 2014). This definition may seem very vague in nature and intellectually complex, as globalization can be viewed as either liberalization, universalization, westernization, internationalization as well as deteritorialization (Jan Art Sholte, 2005). Therefore, one does not simply understand the processes of globalization. Due to the complexity behind “globalization” it is much easier in academic literature to look at globalization as an economic phenomenon. Therefore, from this perspective globalization can be considered, within the neoliberal framework, as process of liberalization enacted through a reduction in trade barriers, privatization of industries & public services, deregulation of markets, and a de-compression of politics. As a caveat to note, one of the key defining features of contemporary economic globalization is Samuel Huntington’s notion that it is necessary to “decompress” politics (marketize politics) to eliminate barriers to the advancement of the neoliberal agenda. The decompression of political actors has most notably been witnessed in the developing world, as “puppet” regimes are replaced to serve “special interests” (most notably Chile in 1973), but the decompression of political actors begs to question to what extent are governments willing to reap the financial benefits from economic globalization at the cost of losing political support? Or, more importantly, how does a state survive (or develop) at the expense of foreign exploits? These are just a few questions economic globalization possess for nation-states in the 21st century. Although it would be too exhaustive to cover all the “possible” consequences (or problems) economic globalization possesses, but the ones mentioned above are worth considering when examining the origins of economic globalization.



Albeit the origins of economic globalization are highly debated among academics, some academics mark the times of Ibn Battuta, Marco Polo, and Genghis Khan as the pioneers of increased global interconnectedness. Other academics pursue that economic globalization is a relatively recent phenomenon that came into existence around the start of the 19th century as the “First Wave of Globalization”. Despite the debatable existence of globalization, it is crucial to examine the development of liberalism, since liberalism is the foundation of the dominate neoliberal ideology in market economics. In foreshadowing the question of “how” and “why” neoliberalism became the dominate ideology in market economics? It is necessary to see how the market-liberal tradition of the 19th century appealed to post-Keynesian policy makers. Principally, a turn away from Keynesian economics firstly entrusted increased economic growth which provided a solution to stagflation. Secondly, the return to liberalism in the 1970’s ensured the maintenance of Antonio Gramsci’s so-called “Historical Bloc” (i.e. the development of the “Punto Fijo” system in Venezuela). Thereby, contrasting the 19th century principals of market liberalism with the form of neoliberalism that took root in the 1970’s, it is possible to draw a more holistic picture of the rise of contemporary economic globalization, and its possible failure to provide an effective state apparatus.

The conversion of the U.S dollar from a fixed to floating exchange rate (removed from the gold standard) during the Nixon shocks of 1971 set in motion the collapse of the Bretton Woods economic framework, and ushering in the age of extreme liberal econometrics. Not only did the Nixon shocks help with the deregulation and financializing of international economics (effectively tackling inflation), but it also brought about a revolution in the mind, effectively changing the way individuals interact with the state. With the declining influence of the USSR as a major geopolitical polity in the 1980’s, there was no longer a need for the US economy to sustain a fully employed resilient domestic economy. Thus, the US effectively became a unipolar power, and as pointed out by Francis Fukuyama it was “the end of history”. Though, the decline of the USSR as a major contender to US power did not entail a utopian global-capitalist economy spreading the three pillars of democratic peace across the world. Instead, the revolution in American (albeit a larger extent western society) culture brought about a new radical liberal ontology, that cared little for the welfare state at the expense of free-market economics. As shown after 1989 the rate of productivity accelerated while the median family income stagnated Figure. 1 (Economic Policy Institute, 2014). The continued divergence between productivity and medium family income illustrates that Americans accepted the neoliberal ontology as a radical cultural transition took place behind the scenes. Changing the state apparatus of the U.S from a largely welfare state under FDR’s “New Deal”, to an individualized meritocratic neoliberal society under the “Washington Consensus”. Although this cultural transition may have gone unnoticed, structurally it was present with reforms in the Welfare State (i.e. Right to Work Legislation), convergence of commercial and private banking systems under the rejection of the Glass-Steagall Act, as well as growth in privatization along with a diminished role of the state. Internationally, during the post-war period there was an radical acceptance of Internationally Monetary Fund (IMF) structural adjustment programs, which were effectively loans to developing nations experiencing a balance of payment crisis. Although the IMF knowingly administered the loans to developing nation-states which could never be able to fulfill the interest payments on such loans. Thus, many of these loans had to be wiped clean as odious debts in the 1990’s after years of experiencing economic dependency, yet problems of underdevelopment in many developing nation-states are still experienced.



Although liberalism and globalization may be enshrined as Robert Keohane’s “international liberalism”, Ulrich Beck’s “globality” or David Harvey’s “space-time compression” it is important to keep in mind the more sinister version of economic globalization, where political, social, and economic borders between individuals may be more prominent than ever before. Conceptually, the effects of globalization are neither beneficial or harmful (although I might be implying more of the negative effects of economic globalization), as there are two forms of globalization. One being globalization from below the other being globalization from above. Simply put globalization from below is what allows for discursive and political opportunity chances to occur (usually from the grassroots level i.e. 1994 Ejército Zapatista de Liberación Nacional (EZLN)). Globalization from above is a “top-down” systematic approach to globalization where greater interconnectedness is the result of agreements between bureaucratic international institutions (i.e. UN, IMF, WB, IFI’s…etc.). Thereby understanding that globalization is not only an unidirectional phenomenon, but intrinsically a multidirectional phenomenon, it is possible to understand economic globalization (or neo-liberalization) has both winners and losers.



Perceiving globalization from the perspective of “winners” and “losers” it is possible to conceptualize globalization as a binary phenomenon, though contrasted with the asceticism of liberalism it begs to question if it is possible to view globalization as a progression of development? Rather than viewing globalization as having two definitive outcomes. The development theory of globalization can be found in the roots of classical liberalism. In John Locke’s First Treatise Chapter VII Locke makes a clear distinction between political power and personal property. In rebutting Robert Filmer’s theory of the divine right of kings Locke arises a crucial assumption between political power and property rights in Filmer’s argument, which is crucial to understanding the individual liberal ontology of personal ownership. Thus, the premise that God entitled Adam with the earth’s resources to will upon his eldest son, Filmer equivocally assumes that a transition of resources entails a transition of political power. On the other hand, Locke states that a transition of resources (or property) does not entail a transition of political power because the inheritor of resources did not inherit his “brethren” (or personal being) (Moseley). Therefore, an inheritor of property (or resources) cannot yield the same political power over others because they are fundamentally different individuals. In Locke’s Second Treatise Chapter V the argument of property ownership is taken further. Locke not only asserts that property ownership is transferable, but Locke also states that whatever a man mixed his own labour with becomes his property (Moseley). Therefore, Lockes conception of property increases the “net yield” or the “commonwealth” of a group, as individuals can utilize their labour for private ownership. The basic premise of property ownership under liberalism shows that increased private ownership, can be utilized for personal investments, trade or collateral in the aim of achieving development. From the liberalist perspective, it is possible to conceptualize increased globalization as beneficial for the individual because such actions of private ownership increase the net wealth of the group of individuals. All in all, on the surface (for liberals) globalization can be viewed as an increased stage of economic development beyond the traditional theories of classical liberalism.



Beyond the traditional assertions of classical liberalism, and modern day liberal internationalists, this central question still arises: Why is it that if liberalism was to bring about an increased wealth for all, how come there is still disparities globally? The fact of the matter is that there has been a rapid increase in net wealth and productivity during the 20th century, the only catch is that the positive effects of globalization have not been distributed evenly within and between nation-states. As Richard Florida asserted that the effects of globalization is a “spiky world”, where “…the talent-attracting “have” regions seem increasingly remote from the talent exporting “have-not” regions.” (Florida, 2005). The fact that there is an uneven distribution of resources globally implies that the underlying structures of wealth and power are present, as one nation-state must have more than the other nation-states. In an age of increasing global inequality (with the United States of America as the dominate unipolar hegemony) it is informative to ask if the age of globalism is the American century? If so, did liberalism win?

In 1941 Henry Luce proclaimed that the 20th century would be the “American Century”, although much can be said about the United States being the “global empire”, the dominance of the U.S does not adequately justify a “win” for liberalism or globalization. The United States global hegemony does not justify the premise that globalization (liberalization) is overall beneficial, because as a global society we are very much in the crux of globalization. Any attempt to state that globalism is Americanism is false. As globalization is not merely an extension of promoting democratic peace, republican representation, free markets, and liberal human rights, but globalization is also the antithesis to a world of greater interconnections. Instrumentally, globalization is much more than the dominance of the U.S cultural values and ideologies, as there are continual tensions between the “winners” and “losers” of globalization which expand across national identities not confined to any single ideology (i.e. wealth inequality). Intrinsically globalization of the 21st century looks more like Marx’s dialectic than Rostow’s modernization theory beyond high mass consumption.



In an era of globalization, the only thing that is certain is uncertainty itself. Twenty sixteen illustrates that uncertainty is the only thing which is certain, from the impeachment of Lula, Brexit, election of Donald Trump, rise in populist politics, Cold War like diplomatic relations between nations, continued turmoil in the middle east (i.e. Yemen & Syria) and the increased migrant crisis all goes to show that the effects of globalization are inevitable.

Keeping in mind that any possible future outcomes of globalization (good or bad) are inevitable, it is too easy for anyone to view the world from an pessimistic perspective while the positive factors are easily overlooked. Therefore, it is crucial to cautiously remind oneself of the progressive development in democratic agency because of the driving process’s behind globalization, such as advancements in technology, science, engineering and mathematics (also to note advancements of political agency in social equality). Examining globalization from the historical long duré perspective it is not only possible to see how certain variables produce unsuspected outcomes, as well it is possible to see how even fundamental ideas such as property, freedom and security continually re-produce global civil society. Globalization should not be viewed as a binary phenomenon, instead globalization is multifaceted in nature.



Economic Policy Institute. (2014). Productivity and real median family income growth, 1948-2013. Retrieved from,

Florida, Richard. (2005, October). The World Is Spiky: Globalization has changed the economic playing field, but hasn’t leveled it. The Atlantic, 48-51.

Moseley, Alexander. John Locke: Political Philosophy. Two Treatises of Government. Retrieved from,

Ritzer, George., & Dean, Paul. (2015). Globalization: A Basic Text. Malden, MA: Blackwell Publishing & John Wiley & Sons.

Scholte, Jan Aart. (2005). Globalization: A Critical Introduction. Basingstoke, New Hampshire: Palgrave Macmillan.








The Return of Neo-nationalism?

Rethinking Democracy In an Age of Globalism

By Sheldon Birkett

The perceived return of 20th century nationalism, and the subsequent rise of populist rhetoric is deepening the fragmented flaws present in “western liberal democracy”. The United States as a unipolar imperial power, with a rise in populist politics, begs to question if a liberal democratic form of governance is the best form of governance in the 21st century. Although the subsequent rise of neo-populist leaders in America, East Asia, and Europe are deeply rooted in the macroeconomic failures of the capitalist world system, it is of the upmost importance to consider if regime change in the west is necessary as there is a heightened sense of political uncertainty. Specifically, are the alternatives to liberal-democratic regimes less susceptible to populist politics? If so, how should these alternative regimes govern in a globalized world? I do not intend to provide any definite “answers” to the questions of regime change. Instead, I wish to reconsider the normative perception of liberal-democratic regimes in an age of populist politics.

Firstly, if one is to reconsider regime change in the 21st century it is necessary to seek alternatives to liberal-democracy, because no form of governance is a form of governance. Traditionally democratic governance is seen as the best form of governance as it provides a wide variety of civil liberties, human rights, and universal suffrage. This conception of democracy is usually equated to Robert Dahl’s narrow definition of “procedural democracy” (Schmitter & Karl, 1991). Dahl’s definition of democracy is narrow as it does not allow for an adequate variation in how democracy is enacted (i.e. by means of direct action movements). Instead, Joseph Schumpeter’s conceptualization of democracy as democratic electoralism is too broad in nature as a democracy is merely more than an election every four to five years, as democratic practices should be continuous in nature (Schmitter & Karl, 1991). Therefore, finding an adequate balance between a rechstaat (rule-state) democratic order and an open-participatory democratic order is a difficult balance to achieve in an age of rising global inequality which is threatening the democratic framework.

In the aim to provide alternatives to our current democratic regime, it is necessary to see if alternatives to liberal democracy have succeeded in the past. When examining regimes such as Fujimori, Chavez, and Cardenas it becomes apparent that their form of democratic governance is not wholeheartedly a western “liberal-democracy”. Instead, such regimes present a form of delegative democracy, in which political leaders win elections by means of appealing to an disenfranchised populous, once in power such regimes limit state rights in order to maintain political power (O’Donnell, 1996). For example, following the re-election of Venezuelan Hugo Chavez in 2006 Chavez held a referendum on the 1999 Bolivarian Constitution that would extend the presidential term from six to seven years, and allow for indefinite re-election (no two term limit). Chavez referendum failed to pass in 2007 as the political opposition viewed it as a grab for political power (Hellinger, 2009).

Though a more accurate depiction highlighting the instability of a delegative democracy sustaining western civil rights and liberties is the declaration of Martial Law by Filipino Ferdinand Marco’s in 1972. Principally, the enactment of Martial Law by Ferdinand Marco’s was to guarantee Marco’s political hegemony in the Philippines. Marco’s enactment of Martial Law was justified against the resurgence of the communist Huk rebellion in Central Luzon, which was virtually non-existent by the 1970’s. Instead, Marco’s attainment of political hegemony by means of delegative democracy was principally to extend Marco’s rule by parliamentary means of consistent re-election without a constitutional limit on the presidency (Celoza, 1997). As shown, delegative democracy as an alternative to “western liberal democracy” does not provide adequate civil rights and liberties to citizens. Therefore, it begs to question if there are valid alternatives to liberal democratic regimes, that are both politically stable in an age of globalism and not susceptible to populist political rhetoric? What about authoritarianism?

The most prominent “democratic” authoritarian regime in the western world is Vladimir Putin’s Russia, albeit with an approval rating over 80% Putin is one of the most popular leaders ever to be elected (Esipova & Ray, 2014). Though, if you have a further examination of Putin’s regime it is very clear that most of Putin’s success is in comparison to Boris Yeltsin’s political-economic failure as a leader of Russia, during and after Russia’s transformation from communism. Now, with rising tension between the U.S and Russia (i.e. 2016 Election Cyberattack on the U.S, and expulsion of Russian diplomats), and the 2014 annexation of Crimea, it is becoming apparent that Russia could be falling into another power seeking Thucydides trap. Showing that even democratic-authoritarian regimes are susceptible to political instability.

Delegative democracies, authoritarian democracies, and liberal democracies all appear to be inadequate in dealing with the growing complexity of globalism. The growth of populist parties across western liberal democracies in Greece, Spain, Italy, France, Hungary, Germany, United States, and Britain (just to name a few) is threatening the fundamental nature of democratic institutions. In an age of globalization, it is necessary to critically think of regime change as a possible aid to the resurgence of populist politics, neo-nationalism, and political uncertainty. Fundamentally, there is a need for a reconceptualization of democracy in an age of globalism, as 2016 goes to show that 2017 is looking more politically uncertain than ever before.



Celoza, Albert. (1997). Ferdinand Marcos and the Philippines: The Political Economy of Authoritarianism. Westport, Connecticut: Greenwood Publishing Group.

Esipova., Neli, & Ray, Julie. (2014, July 18). Russian Approval of Putin Soars to Highest Level in Years. Retrieved from

Hellinger, Daniel. (2009). “Chapter Seventeen: Venezuela” in Harry E. Vanden (Eds.), Politics of Latin America: The Power Game (Pages. 463-493). New York, NY: Oxford University Press.

Karl, Terry Lynn., & Schmitter, C. Philippe. (1991). What Democracy Is…and Is Not. Journal of Democracy, 2(3), 75-88.

O’ Donnell, Guillermo. (1996). “Chapter Seven: Delegative Democracy” in Larry Diamond (Eds.), The Global Resurgence of Democracy (Pages. 94-108). Baltimore, MD: The Johns Hopkins University Press.