Wishful Thinking? The World Economic Forum's Cure for What Ail's Humanity, Globalization 4.0

Acknowledging that the globalization associated with the neoliberal era led to enormous damage to the masses, the World Economic Forum will be launching the cure in Davos, Switzerland this month - more globalization, a.k.a. Globalization 4.0.

In case you weren't aware of Globalization 1.0, 2.0 and 3.0, here's a quick primer.  1.0 was globalization prior to WWI (and it was substantial). 2.0 arrived in the immediate post-WWII era. 3.0 is what we've been living under since Reagan, Thatcher and Mulroney decided that Hayek and Friedman knew what they were talking about - the age of neoliberalism and the quest for the GDP Holy Grail.

That leads us to Globalization 4.0.

In the dominant narrative of the last 40 years, GDP was king, and countries pursued deregulation, loosened capital controls, cut corporate taxes, and liberalized their labor markets.

The eruption of popular anger that has roiled many countries’ politics in recent years is rooted in the failure of that neoliberal model. But there is no economic law requiring globalization to be a race to the bottom. On the contrary, for humanity to have any hope at all, Globalization 4.0 must break with neoliberalism for good.

Yes, indeed. A break with neoliberalism. I'll get right on it. Should be finished by a week next Thursday at the latest.

"No economic law requiring globalization to be a race to the bottom." Brilliant. Wonder why no one thought of that years ago. Of course the "race to the bottom" has nothing to do with economic law and everything to do with greed and a political caste that long ago stopped working for the people who elected them to office. Marginal thinkers who saw the quest for ever greater GDP as their priority. Leaders like the current prime minister of Canada and the guy before him. Those two, what a pair.

If you're looking for specifics about this Fourth Industrial Revolution (4IR) well you're out of luck. There's a lot of Kumbaya talk but it's vague, touchy-feely stuff, heavy on bromides. If anything it sounds like an admission by the political, industrial and financial jetsetters winging their way to their mountain retreat that they've made a complete bollocks of it so far but one more shot, just one more, will surely rectify everything.  And there's the problem.

Getting into neoliberalism was easy. It's like driving into a ditch. The pull of greed is a powerful force. Getting out of the neoliberal ditch will be far more difficult than getting in. It's how so much of the world's wealth accumulated into so few hands.  How, short of confiscatory taxation, do you break that?

So what is this Fourth Industrial Revolution? It seems to be a vision of globalization purged of globalism.

Globalization is a phenomenon driven by technology and the movement of ideas, people, and goods. Globalism is an ideology that prioritizes the neoliberal global order over national interests. Nobody can deny that we are living in a globalized world. But whether all of our policies should be “globalist” is highly debatable. 

After all, this moment of crisis has raised important questions about our global-governance architecture. With more and more voters demanding to “take back control” from “global forces,” the challenge is to restore sovereignty in a world that requires cooperation. Rather than closing off economies through protectionism and nationalist politics, we must forge a new social compact between citizens and their leaders, so that everyone feels secure enough at home to remain open to the world at large. Failing that, the ongoing disintegration of our social fabric could ultimately lead to the collapse of democracy.  

Moreover, the challenges associated with the Fourth Industrial Revolution(4IR) are coinciding with the rapid emergence of ecological constraints, the advent of an increasingly multipolar international order, and rising inequality. These integrated developments are ushering in a new era of globalization. Whether it will improve the human condition will depend on whether corporate, local, national, and international governance can adapt in time. 

Meanwhile, a new framework for global public-private cooperation has been taking shape. Public-private cooperation is about harnessing the private sector and open markets to drive economic growth for the public good, with environmental sustainability and social inclusiveness always in mind. But to determine the public good, we first must identify the root causes of inequality.

This is where it gets wobbly. Public-private cooperation is about the private sector and open markets working for the public good? It's about governments weaseling their way in the era of "everyday low taxes" by unloading their responsibilities on the private sector lured in by assurances of irresistible profits.
The "public good" may be there, somewhere, but, if so, it's pretty far down the ladder of the interests being served.

...while open markets and increased competition certainly produce winners and losers in the international arena, they may be having an even more pronounced effect on inequality at the national level. Moreover, the growing divide between the precariat and the privileged is being reinforced by 4IR business models, which often derive rents from owning capital or intellectual property.

...Globalization 4.0 has only just begun, but we are already vastly underprepared for it. Clinging to an outdated mindset and tinkering with our existing processes and institutions will not do. (Justin, did you get that?) Rather, we need to redesign them from the ground up, so that we can capitalize on the new opportunities that await us, while avoiding the kind of disruptions that we are witnessing today.

As we develop a new approach to the new economy, we must remember that we are not playing a zero-sum game. This is not a matter of free trade or protectionism, technology or jobs, immigration or protecting citizens, and growth or equality. Those are all false dichotomies, which we can avoid by developing policies that favor “and” over “or,” allowing all sets of interests to be pursued in parallel. 

To be sure, pessimists will argue that political conditions are standing in the way of a productive global dialogue about Globalization 4.0 and the new economy. But realists will use the current moment to explore the gaps in the present system, and to identify the requirements for a future approach. And optimists will hold out hope that future-oriented stakeholders will create a community of shared interest and, ultimately, shared purpose.

There you have it. Feel better now? This sounds like "world government" time, the very thing that plunges the Americans into apoplexy.

The changes that are underway today are not isolated to a particular country, industry, or issue. They are universal, and thus require a global response. Failing to adopt a new cooperative approach would be a tragedy for humankind. To draft a blueprint for a shared global-governance architecture, we must avoid becoming mired in the current moment of crisis management.

Specifically, this task will require two things of the international community: wider engagement and heightened imagination. The engagement of all stakeholders in sustained dialogue will be crucial, as will the imagination to think systemically, and beyond one’s own short-term institutional and national considerations. 

These will be the two organizing principles of the World Economic Forum’s upcoming Annual Meeting in Davos-Klosters, which will convene under the theme of “Globalization 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution”. Ready or not, a new world is upon us.

And that, kids, came directly from Klaus Schwab, the founder and chairman of the World Economic Forum. Are you starting to feel some seismic rumbling coming on? Relax, that was last night's burrito.