First industrial revolution

The eighteenth century presented humankind with two visions, namely, a vision of economic prosperity based on free markets and a vision of "liberty, equality and fraternity" based on democratic political institutions. The "first industrial revolution" in England was the forerunner of material prosperity while the French Revolution raised the banner of a liberal policy and society.

For nearly two centuries after the English and French revolutions, the struggle to construct a liberal political and economic system occurred within the boundaries of independent states. Despite the internationalism of "free traders" and parts of the socialist movement, political and economic liberalism, perhaps paradoxically, were closely bound up with nationalism. The implicit assumption was that it was possible to have "Economic liberalism in one country." 

Today that assumption is being challenged by the forces of economic globalization. State boundaries gradually are becoming less important as large and rapidly growing flows of trade, investment, technology, finance capital, labor and ideas create an integrated world economy. Our political institutions, however, have lagged behind. We have a global economy but not a global policy and hence our ability to "govern the market" and ourselves is weakened.

Not everyone is dissatisfied with the present state of affairs. Powerful countries such as the United States and large transnational corporations tend to favor the status quo and oppose extending democratic ideals beyond the borders of existing states. Many critics of economic globalization strongly object to the loss of control implied by globalization and respond to the absence of democratic global institutions by advocating a return to economic nationalism. Other critics, including myself, wish to extend the benefits of economic globalization and to create institutions of global governance which are far more democratic than the existing collection of international agencies.

If one is serious about democracy in the global order, at a minimum this implies respect for the views of the majority, together with self-restraint by the powerful. Unfortunately, the United States, the world's most powerful country, has disregarded this most elementary requirement of a democratic global environment. Senator William Fulbright of Arkansas warned us of this a generation ago when he spoke of the "arrogance of power" and the need to pay "a decent respect for the opinions of mankind." The United States has failed to heed his warnings and concerns. Instead, in recent years, as in Senator Fulbright's time, the United States has resorted frequently to unilateral action and has treated with contempt the opinions of other countries.

Globalization is leading to greater economic integration, but at the same time there are two important areas where the world is becoming more restrictive and more protectionist: The first is restrictions on the movement of low-skilled labor, The second is the creation of "intellectual property rights" that restrict the flow of knowledge, ideas and technology. These protectionist restrictions ensure that the benefits of globalization are distributed inequitably, within an asymmetric structure of global governance that favors the rich and the powerful while placing the poor and the weak at a considerable disadvantage. The solution, I believe, is greater liberalization, not less, and this in turn requires more democratic decision-making at the global level.

Even in trade and commerce, an area where there has been a considerable degree of liberalization, the benefits of globalization have been distributed inequitably. The reason is continuing discrimination against products of particular importance to low income countries. The process of liberalization has generally occurred much more slowly in the cases of foodstuffs, textiles, clothing, and footwear and leather products.1 That is, even in the areas where globalization has advanced most rapidly, there has been an asymmetrical relationship. The poor have been put at the end of the queue.