The term “globalization” came into widespread use in the 1990s, about the same time as Fukuyama’s End of History. As that timing suggests, globalization was presented as an unstoppable force, which would break down borders of all kinds allowing goods, ideas, people and especially capital to move freely around the world. The main focus was on financial markets, and the assumption was that only market liberal institutions would survive.

The first explicit reaction against globalization to gain popular attention in the developed world[1] was the Battle of Seattle in 1999, but the process, and the neoliberal ideology on which it rested, didn’t face any serious challenge until the Global Financial Crisis of 2008. The Crisis destroyed Neoliberalism as a political project with positive appeal, but its institutions have remained in place through inertia.

Now, however, globalization is finally facing serious threats, most immediately from the nationalist[2] right, seeking to restrict movement of people and goods across national borders. There hasn’t yet been any serious challenge to financial globalization, but faith in the wisdom and beneficence of financial markets has disappeared.

An obvious question here is: can globalization be reversed? My short answer is: within current political limits globalization can be reversed least partially in the case of trade, but can only be slowed in the case of movements of people. I’m still thinking about financial flows.

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How to debate universal basic income

by Ingrid Robeyns on June 9, 2019

Daron Acemoglu has a piece at Project Syndicate arguing that basic income is a bad policy. His argument, in a nutshell, is that a truly universal basic income (UBI) would be prohibitively expensive, and that raising additional taxes to pay it “would impose massive distortionary costs on the economy”. The alternative, to cut all existing social programs for the sake of UBI, would be “a terrible idea”, since these programs are targeting those that are particularly vulnerable or needy. He argues that the political effects of a UBI would be bad – a UBI would “keep people at home, distracted, and otherwise pacified”, whereas “we need to rejuvenate democratic politics, boost civic involvement, and seek collective solutions”. For Acemoglu, the top priorities in the USA should be “universal health care, more generous unemployment benefits, better-designed retraining programs, and an expanded earned income tax credit (EITC)”, as well as higher minimum wages.

I share Acemoglu’s view that “One should always be wary of simple solutions to complex problems, and universal basic income is no exception.” In a paper I wrote last year (alas, in Dutch, and I haven’t had the time to translate it, but perhaps google translate can help us a little), I’ve argued that the debate on universal basic income is confused and confusing, and will not be getting us far, because too many papers/interventions are not clear about their assumptions, are not spelling out the goals (e.g. is the primary aim poverty reduction or creating freedom from the need to submit to the labour market for survival or something else), and are not giving the details of the package deal. [click to continue…]