Globalization, like many great geopolitical ideologies before it, is now officially dead. Despite the near-religious conviction with which it was originally conceived, a growing vagueness now surrounds its original promise that nation states were heading toward irrelevance, to be replaced by the power of global markets; that economics, not politics or arms, would determine the course of human events; that growth in international trade would foster prosperous markets that would, in turn, abolish poverty and change dictatorships into democracies.

Yet, contends Saul, little has transpired as predicted. The collapse of Globalism has left us struggling in a paradox — a chaotic vacuum. Instead of surrendering or sharing sovereignty, governments and citizens are reasserting their national interests. The United States appears determined to ignore its international critics. Europe is faced with problems of immigration, racism, terrorism and renewed internal nationalism. Many of these issues call for uniquely European solutions born out of local experiences and needs. Elsewhere, the world looks for answers to African debt, the AIDS epidemic, the return of fundamentalism and terrorism, all of which perversely refuse to disappear despite the theoretical rise in global prosperity.

In addition to the negative aspects of Globalism, Saul also objectively analyzes its successes, such as the astonishing growth in world trade and the unexpected rise of India and China, which seem slated to become twenty-first-century superpowers.

Insightful and prophetic, The Collapse of Globalism is destined to take its place as one of the seminal books of our time.

1

A Serpent in Paradise

Globalization emerged in the 1970s as if from nowhere, fully grown, enrobed in an aura of inclusivity. Advocates and believers argued with audacity that, through the prism of a particular school of economics, societies around the world would be taken in new, interwoven and positive directions. This mission was converted into policy and law over twenty years—the 1980s and '90s—with the force of declared inevitability.

Now, after three decades, we can see the results. These include some remarkable successes, some disturbing failures and a collection of what might best be called running sores. In other words, the outcome has had nothing to do with truth or inevitability and a great deal to do with an experimental economic theory presented as Darwinian fact. It was an experiment that attempted simultaneously to reshape economic, political and social landscapes.

That very clear idea of Globalization is now slipping away. Much of it is already gone. Parts of it will probably remain. The field is crowded with other competing ideas, ideologies and influences ranging from the positive to the catastrophic. In this atmosphere of confusion, we can't be sure what is coming next, although we could almost certainly influence the outcome.

Leading figures who once said nation-states should be subject to economic forces now say they should be reinforced to face global military disorder. Prophets of Globalization who said “Privatize, privatize, privatize” now say they were wrong, because the national rule of law is more important. Economists are angrily divided over whether to loosen or tighten controls over capital markets. Increasingly strong nation-states, like India and Brazil, are challenging the received wisdom of global economics. Pharmaceutical transnationals find themselves ducking and weaving to avoid citizen movements.

Dozens of examples like these tell us that we are transiting one of those moments that separate more driven or coherent eras. It is like being in a vacuum, except that this is a chaotic vacuum, one filled with dense disorder and contradictory tendencies. Think of it as a storm between two weather fronts. Or think of those moments in fast-moving sports, like soccer or hockey, when a team loses its momentum and there is furious, disordered activity until one side finds the pattern and the energy to give it control.

These moments tend to begin with denial on all sides. The confusion frightens those who thought they were setting the direction. And it disappoints those who criticized that direction. There is nothing decisive or noble about the situation. The options are not clear.

Yet, a period of uncertainty is also one of choice, and therefore of opportunity. We cannot know how long it will last. Probably not long. And those choices that set the future will come insidiously, in fits and starts. Some have already presented themselves and somehow been processed, without our fully registering that a determining step was taken.

The shape of what comes next will therefore be decided - a conscious act - or it will be left to various interest groups to decide for us, or simply to fate and circumstance. It will probably emerge from a mix of all three. The soundness of the outcome will depend on the balance between these necessary mechanisms. The most dangerous disequilibrium will have favoured fate and circumstance over the other two. The most mediocre, interest groups. The soundest equilibrium would be led by conscious public decisions.

This book is about our ability to choose. It is also about where those choices might lead us.

To believe in the possibility of change is something very precise. It means that we believe in the reality of choice. That there are choices. That we have the power to choose in the hope of altering society for the greater good. Do we believe that our governments must inevitably tax the poor through stealth taxes such as state-controlled gambling? Or do we believe there is a choice? Do we believe that unserviceable Third World debt could be written off, if we chose to do so? The conviction that citizens have such power lies at the heart of the idea of civilization as a shared project. And the more people are confident that there are real choices, the more they want to vote—a minimal act—and of greater importance, the more they want to become involved in their society.

What does Globalization mean? Defining received wisdom is often a scholastic trap. Worse still, as the British Liberal John Morley put it a century ago, “If we want a platitude, there is nothing like a definition.” It is better to come at the subject in a context.

How much of Globalization will disappear? When a grand idea or ideology is fresh and the sailing is easy, even the most serious proponents make all-inclusive claims on its behalf. This grand view makes it easier for them to impose the specific changes they want. When things become more complicated, as they do, most of the same advocates retreat to more modest claims, while still insisting on the central nature of their truth and its inevitability. Many will angrily deny they ever claimed more.

Yet the papers, books, theses, speeches and articles on the subject, from country after country, are perfectly clear. For a quarter-century—at least until the mid-'90s—public and economic debate and the resulting policies were driven by an all-inclusive vision of what Globalization was and why it was inevitable. Those texts are also a reminder of how computers have made economics even more dismal, and how much less this approach to economics is about thought than about statistics of uncertain value. That which never was a science struggles with difficulty to remain a domain of speculative investigation.

As to which parts of the Globalist belief system will disappear and which will stay, we have no idea. If everything went it would be dangerous. The last thing we need is rampant nineteenth-century nationalism combined with old-fashioned protectionism as an international principle. But once large forces begin to move about in a period of uncertainty, we cannot know the outcome. Look back. Put yourself in the context of times that led to great reversals. The people of those eras were usually amazed at how easily the once inevitable became the soon forgotten; and this whether the change in question was for the better or the worse.

If you look around today there are clear examples of Globalization as a success story. The most obvious is the growth in trade. And there are the examples of its failures. Think of New Zealand or, in a more comic vein, of the deregulated airline business. And then there are the running sores. The Third World debt crisis is now in its third decade.

Perhaps most important, there are other, broader forces at work— growing para-political engagement of young people; the normalization of accelerated international violence; the re-emergence of nineteenth-century-style nationalism in a range running from the merely predictable to the most destructive; the emergence of new national models, for example, some which are not racially based; and the straightforward reaffirmation of the nation-state, even inside the least expected of places, the European Union.

What these random examples tell us is that social and political realities since the early 1990s have not unfolded as predicted. These altered realities are now setting the course, in place of the economic forces that for the last three decades have been declared to be in charge. Or rather, to be inevitably in charge.

A shrinking number of people believe that economics could actually set a broader course for any civilization. I've noticed that not many people even bother listening when the old assertions of global economic inevitability are made. Inside the small, closed world of economists and officials and interest group associations and specialist writers, that sort of talk does go on. Why not? But most of us are elsewhere. And so, therefore, is the world.

What about our life in such an in-between time? I described this as a vacuum - an interregnum between two unreasonable certainties. If we use it as a short, positive moment of uncertainty when choice is privileged, well then, it becomes possible to emerge into a less ideological and more humanitarian era. This is not an unreasonable ambition or expectation. History is filled with interregnums—some military, some religious, some political, and many of them economic.

Ours is to a great extent a vacuum of economic thought, which adds an element of even greater uncertainty because economics is a romantic, tempestuous business, rather theatrical, often dependent on the willing suspension of disbelief by the rest of us. As with other fashions, its truths change more often than in more concrete sectors.

Civilizations, religions, languages, cultures, nations, even nation-states tend to last centuries. For economic theories a quarter-century is a good run. A half-century is unusual. More than that is something to boast about.

Most of these vacuums become filled with a swirl of concerns, not just military or economic or religious. They reflect the complexity of real life. Some of them have been used intelligently, some disastrously. And in some cases people are so convinced that the reigning ideology is inevitable that they never realize they are in a vacuum. So they are amazed to find themselves abruptly heading in another direction.

Admitting to the need for change is not the most common human trait. And the more power we have, the less change interests us; indeed, the more it frightens us. Nevertheless, eras do stumble, grind, pitch to an end and then, there we are, once again groping our way through an obscure vacuum.

There were those remarkable years in the early sixteenth century when religious reform movements in northern Europe might have led to a strengthened and inclusive one church. The complex tension between Erasmus and Luther illustrated that choice was still possible. Perhaps because so much depended on Erasmus's ethical leadership and he was simply too old, the positive turned negative and tension turned to violent division with hundreds of thousands of dead. Or there were those few years after the fall of Napoleon when a fairer European society seemed possible, at least until Metternich's influence over the power structures of the continent became dominant and he tied everyone up in a situation resembling peace without hope. Or those few years after the First World War when all seemed possible. Most of the smaller nation-states that saw in the Treaty of Versailles their chance for independence actually had to wait until 1989. Now some twenty-five of them, new nations or newly independent nations, are getting their first real chance to act as independent entities. They have finally become what many would call a Westphalian or others a nineteenth-century nation-state. They wish to express in the fullest possible manner their national existence. We don't know if this will be positive or negative. What we do know is that in one corner Globalists are declaring the nation-state to be a weakening phenomenon of the past, while in another corner two dozen nation-states stand fresh born, full of energy and ambition with at least a century's worth of frustration to work out.

John Maynard Keynes was on the British delegation at Versailles in 1919 and he resigned in protest when he saw the opportunities of that vacuum being thrown away in the negotiations. In 1919 he published his first explanatory protest. It began:

The power to become habituated to his surroundings is a marked characteristic of mankind. Very few of us realize with conviction the intensely unusual, unstable, complicated, unreliable, temporary nature of the economic organization by which Western Europe has lived for the last half century. We assume some of the most peculiar and temporary of our late advantages as natural, permanent and to be depended on, and we lay our plans accordingly.2

The economic organization he was referring to was the first great modern experiment with free trade, perhaps even with Globalization, one that had risen out of the messianic struggle against the Corn Laws in Britain and then spread around Europe.

At this point you may well hear a chorus of true believers protesting that that was then. Now is now. And now we are far more integrated and in a far more complex manner, because technology, just for starters, binds us inevitably one to the other. And so on. To summarize the argument: that particular free trade situation was not like this universal free trade situation. But people in the late nineteenth and early twentieth centuries did not think their situation was particular. They thought it was universal. They believed this with as much conviction and sophistication as people do today. If anything, they were much more sophisticated about the world and how it works.

The true believers in today's chorus forget that nineteenth-century European free trade was double buckled by enormous empires, which held the world as one in a manner we can no longer imagine. Keynes went on to demonstrate the extent of economic interdependence inside Europe in 1914. Germany had been the leading customer of Russia, Norway, Holland, Belgium, Switzerland, Italy and Austria-Hungary; the second best of Britain, Sweden and Denmark; the third best of France; and the primary supplier to Russia, Norway, Sweden, Denmark, Holland, Switzerland, Italy, Austria-Hungary, Romania and Bulgaria, as well as the second largest to Britain, Belgium and France. Neither these investments nor this trade stopped these countries from slaughtering each other in an unprecedented way for five years.

The most haunting paragraph in Keynes's introduction, with a few alterations, might have been written today:

The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend. He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate WITHOUT PASSPORT OR OTHER FORMALITY, could dispatch his servant to the neighboring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference. But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper, and appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalization of which was really complete in practice.3

Instead the closest, most integrated of economic and trading partners went to war with each other in a particularly vicious manner. And immediately after that they variously embraced communism and fascism and the worst of racism and, almost incidentally, high tariff barriers. And then they went to war again. It was only on their way out of this second world war that they took greater care to seize the offered opportunities, Keynes being one of the most influential and the most conscious of the questioning, guiding hands. And they sought structures, not led by economics, but with sensible economics built in as supporting mechanisms.

That pre-1914 naively contented middle class was obviously a much smaller percentage of society than those who today are convinced that they are not naively contented, but are the clever beneficiaries of global economic destiny. For a reminder of reality, those clever beneficiaries might think of Keynes's five words describing open borders - without passport or other formality. Today only Europe has managed to remove the border barriers that didn't exist at all last time around. Elsewhere, it is not uncommon for travellers to be half stripped in airports. Looking at the steady evolution of security over the last thirty years - not just since September 11 - it is possible that this tendency will intensify. A few transborder incidents and it could easily spread back into Europe.

The stories of civilization in any place at any time have this in common - individuals feel they understand the mechanisms of their society. This sense of understanding implies that each of us has the self-confidence to wish to change our society for the better. Or at least we have the self-confidence to accept the possibility that we could change it for the better. Think of those who worked for clean water systems, public education, against slavery.

Do all of us have that self-confidence? Perhaps not. But many more of us do than our strangely meritocratic society often suggests. This understanding may come in many forms and at many levels. It may be conscious or unconscious or a bit of both.

To believe in the reality of choice is one of the most basic characteristics of leadership. Curiously enough, many individuals who think of themselves as leaders find this reality very difficult. They believe that their job is to understand power and management and perhaps make minor corrections to what they accept to be the torque of events. But they take for granted the reigning truths of the day and so are fundamentally passive.

As a result, change is eventually thrust upon them by reality. Or they are replaced. In either case, the strength of that particular civilization—its ability to choose—is weakened.

Let me turn the question around. What of barbarism?

There is more to it than physical violence. More profoundly, it is an assault on the individual's self-confidence. After all, it is our self-confidence that permits us to embrace the complexity and uncertainty of reality as a positive, so as not to be frightened by the possibility of choice. Barbarism can be thought of as violence done to the individual's understanding of herself as a citizen. That violence arises from the belief that truth has revealed itself. A religious truth, a racial truth, an economic truth. Even a scientific truth. The adjective hardly matters.

In the false light of truth, history withers and seems to come to an end. Destiny, it seems, is inextricably at work. And leadership shrinks to less than choice or citizenship. Instead it is centred on the sophisticated exercise of power, which can be gained and held by skillfully riding the wave of inevitability.

The more sophisticated, the more relentless the riding of this wave by those who seek or hold power, the more alienated individuals feel, the less interested in a society where real choices seem to have been marginalized and the mechanisms made to appear mysterious.

And so, as in today's societies, we vote less and are less involved in the mainstream structures of citizenship.

What could more certainly drive individuals away from citizenship than an endless chorus of leaders and specialists—a meritocracy of technicians and technocrats—proclaiming the inevitability of global economic forces and of technological forces, proclaiming the inevitability that these two forces will shape the way the planet works and therefore the way each of our societies works? The unstoppable progress of these forces can perhaps be managed. But even then, it will only be thanks to precise interventions by specialists whose methods can but remain obscure to most us.

If economics and technology are taken to be the great inevitable forces of our day, management is more like a support system that makes the other two seem inevitable. The abrupt rise to hyper-respectability of managerial schools and their matching with large corporations led by technocrats has had the astonishing effect of confusing management with leadership. And if leadership is reduced to management, well then, problems are not to be solved. They are to be managed. In fact, they are no longer problems.

What does this mean in practical terms? Take the self-evident example of the Third World debt crisis stretching on toward the end of its third decade. The debt is unpayable, unserviceable, of no use to a stable free market or to the debtors. Whole regions are literally incapacitated by it. This problem has been easily solvable for a quarter-century. We have centuries of experience dealing with equivalent situations in both the public and private sectors.

What stands in the way of a solution? Belief in the inevitability of a particular economic theory and an overly complex managerial method. Our society is filled with similar situations of all sizes. Such clever passivity cannot help but invite the rise of a yet more barbaric form of leadership. One in which the belief in revealed truth calls forth an ever-narrower devotion to highly peculiar types of economics or warfare or racial identification. With these, the most common expressions of citizenship are likely to be loyalty, belonging and acceptance, compensated by the rewards of self-interest and marked by the promotion of efficiency in the service of the inevitable.

This sort of world feels insecure and fears choice. It is a world of populism or, more accurately, false populism, of fast emotional flashpoints. This is the unpleasant face of nationalism. What I would call negative nationalism.

But there are many other options. The belief that we do not have choices is a fantasy, an unfortunate indulgence in abdication. And so the curious thing about inevitability is that it tends not to last very long. The more the true believers in a reigning theory of truth insist that its growth is inevitable and therefore eternal, the faster the rest of us, who have a bit of distance, tend to decide that we do have the power of choice. And all things considered, we would rather choose some other approach.

The true believers and sophisticated managers go on riding their great wave ever more relentlessly and with remarkable but increasingly meaningless skill, while a growing percentage of the citizenry draw ever further back on the shore in a precautionary manner. To those up on the crest, so intent upon manoeuvring their surfboards, we must appear an unsympathetic lot, uninterested in their efforts, disengaged, strangely irritable, annoyed, alienated, dispirited, cynical.

Some of us even have our backs turned, too busy cashing in to watch, having convinced ourselves that humans unleashed at a global level with only their self-interest in play will produce a dynamic that spreads wealth and strengthens democracy. More and more I meet people who have followed the new rules, have done well for themselves and now seem adrift, as if asking, Is that all there is?

But most of us just seem to be disconnected, waiting for the wave to crash. We are waiting with the cruel, experienced eye of a citizenry that has lost respect for its leadership in general, yet hasn't quite worked out what to do about it and so waits for them to self-destruct.

Looking back, we see it has been a neat trick, presenting an economic truism as the prism through which civilization must be approached. But it doesn't change how reality works. The believers believe, but the world moves on.

After all, things do come to an end. Each of our lives is a testimony to this. Something else comes along - anything from a renewal to a simple death. In the meantime there has been a space of both time and emotion. A confusing vacuum. And however predictable each ending has been, it tends to be messy because it seems to us unexpected.

Think of that moment between adolescence and adult life—a time when the difficulty of imagining how to believe in a world and choose a future may produce everything from tension to high levels of suicide. Or think of love, so bright and certain, which often seems to evaporate. After a time, love may never reappear or new love may come.

There is no promise in any of this except that things do end. And the probability of renewal is dependent on our ability to use the interregnum to make choices that will help shape the next era of our lives.

To shape society we need to think about the origins of what is now passing - the origins of Globalization, its promise, its rise, and gradual collapse from the mid-1990s on. If we don't focus on that magisterial appearance, rise, hesitation and fall, we cannot understand what has happened to us, good and bad, and where we now are. And we need to look carefully at the other forces that increasingly set the pace today, from irregular warfare to NGOs to reinvigorated nation-states, from the reappearance of genocides and oligopolies and hidden forms of inflation to a new practical interest in ethics and positive forms of nationalism and a new interest in citizenship. Much of this is exciting. Some of it is dangerous. All of it is real.

There is one fundamental difference between personal and societal change. Families, for all their strengths, do have their own inevitable, demanding truths. The passage through time that is so difficult in individual lives can be easier for societies. If we do not lose ourselves in anger or despair or the ideology of certainty, society allows us to call upon the strength of community. That is the strength of the other whose reality confirms our own.

PART I: CONTEXT
1 A Serpent in Paradise 3
2 A Summary of the Promised Future 15
3 What They Said It Would Do 17
4 What Somebody Forgot to Mention 26
5 A Short History of Economics Becoming Religion 36

PART II: THE RISE
6 1971 55
7 The Vacuum 57
8 The King's Fool 66
9 Selected Romantic Enthusiasms 69
10 The Gathering Force 88
11 Crucifixion Economics 102

PART III: THE PLATEAU
12 Success 111
13 1991 118
14 The Ideology of Progress 123
15 1995 133

PART IV: THE FALL
16 A Negative Equilibrium 139
17 NGOs and God 152
18 A Chronology of Decline 157
19 A Chronology of Decline: The Malaysian Breakout 162
20 The End of Belief 171
21 India and China 205
22 New Zealand Flips Again 210

PART V: AND WHERE ARE WE GOING NOW?
23 The New Vacuum: An Interregnum of Morbid Symptoms 217
24 The New Vacuum: Is the Nation-State Back? 232
25 Negative Nationalism 246
26 The Normalization of Irregular Warfare 258
27 Positive Nationalism 269

Notes 281
Acknowledgments 299
Index 301