How Globalization Undermined the Case for Western Values

“Go into the Exchange in London, that place more venerable than many a court, and you will see representatives of all the nations assembled there for the profit of mankind. There the Jew, the Mahometan, and the Christian deal with one another as if they were of the same religion, and reserve the name of infidel for those who go bankrupt.” — Voltaire (1734)

The words expressed by Voltaire above have been the modus operandi of so-called neo-liberal economics since at least the 1980s. In the Cold War era, free markets and free societies were thought to be indissolubly bounded. Voltaire is perhaps most famous for advocating religious toleration, but here he speaks of economic toleration as a universal good; the unimpeded pursuit of profit, be it with Jews, Muslims, or Christians, was to Voltaire a sign of economic enlightenment and societal harmony. In Wealth of Nations (1776), Adam Smith would similarly argue against the guilds and state monopolies of trade that dominated the mercantile colonial trading policies of state capitalism. The British and the Dutch East India Companies, for instance, monopolized the trade in spices with Southeast Asia; competition was simply not allowed. In this context, allowing for free trade was indeed enlightened. Instead of blessing from government—the privileged redoubt of an oligarchic few–competition and innovation would drive commerce. And what does our globalized economy look like today, but the picture painted by Voltaire of economic mulitculturalism? Saudi oil sheikhs with penthouses in London, Chinese firms investing in America and vice-versa. Profit and market-capitalization truly is the religion of the world!

But something happened in between the era in which Voltaire wrote and the one in which we now live. Rather, many things happened. Voltaire and Smith wrote in an age of monarchy and largely agrarian economies. In the ensuing century, the Industrial Revolution gave rise to massive cities, urbanization, and, finally democratization. A labor movement that was initially suppressed in 19th Century Europe eventually flowered and extracted major concessions from factory owners and government alike: the right to unionize and negotiate contracts and working conditions, and eventually the right to vote (universal male suffrage). Protestant and Catholic national leaders alike spoke of the Christian duty of the state to protect the most vulnerable; the heretofore reactionary Catholic Church attempted to make peace with the industrial economy with the encyclical Rerum Novarum, which advocated for capitalism with a human face. After many trials and travails—including WWI, the Great Depression, and WWII—the Western world seemed to reach a new Golden Age. Capitalism and labor rights, profit and the Christian duty to fellow man, coalesced in an economic miracle of sustained postwar growth that lasted for twenty years. The middle class grew at an unprecedented rate, labor union membership was high and profits were not damaged as a result.

The oil shocks and stagflation of the 1970s undid this postwar economic consensus, for better or for worse. Reagan and Thatcher, in pursuit of elusive domestic economic growth AND defeat of the Soviet menace, re-moralized the economy along the lines of Voltaire and Adam Smith—business, entrepreneurship, free enterprise became values in themselves again. The job creators, who spoke the universal language of commerce, would once again be the bearers of enlightenment that Voltaire had envisioned at the London Exchange. A world of free markets would inexorably lead to a world of free societies. Classical liberal economics—property rights, freedom of trade and of the seas—would give way to classical liberal political values in the countries in which the former prevailed. How could wealth creation not also create the wealth of mind that was freedom of speech, religious toleration, and natural rights?

From the 1990s to today, our globalized world took the outward appearance of Voltaire and Smith’s capitalist utopia. Travel, investment, the free flow of goods and capital became easier than ever before. Communism collapsed. Democracy would inevitably replace it. But now it’s becoming clearer that something went wrong. Liberal economics have not created a liberal polity in China. The elites of both parties, who have benefited from the neoliberal order planted by Reagan and hatched by bipartisan laissez-faire consensus, butt heads with the “populist” working poor they despise and in turn court for votes.

The moral contradiction at the heart of our post-1989 globalization frenzy was, and still is, this: countries that hold individual rights, labor rights and even environmental protections in relatively high regard ran an end run around those principles by outsourcing production to countries that possessed none of the former. This last hail-mary pass back to the halcyon days of capitalism bypassed a century of struggle to harmonize the interests of capital and labor. The resulting moral degradation was twofold: workers in the Western world saw how expendable they were; the developing world laborers who replaced them saw the glaring hypocrisy of nations who extolled democratic rights domestically but, in offshoring, fed off of labor and environmental exploitation and an appalling track record on democracy to feed their consumer appetites.  The Chinese factories with suicide protection nets and Hong Kong protesters mowed over by authoritarian capitalism are one side of the coin; the opioid addicts of the rust belt and the tattooed, craft beer drinking city hipsters wearing fashions made in communist Vietnam or theocratic Turkey are another. In each case, and in each place, the moral clarity of democratic capitalism is lost, as if the safeguards built around industrialization—the right to unionize, accident insurance, anti-pollution laws—had never existed.

As the coronavirus pandemic continues to sour U.S.-China relations, and Chinese relations with the West generally, debates about globalization will only accelerate. For the economic nationalists, Chinese deception is proof that countries need to rebuild domestic industry. Some of this, particularly in critical industries like medicine and defense, is necessary. But no nation can thrive without world trade, and none can seal itself off entirely from the peoples and cultures of the world without great concomitant loss for those citizens who remain veiled in ignorance.

Going forward, Globalization 2.0 should be values based. The economic multiculturalism of capitalism—at once at home in authoritarian states like Putin’s Russia and Xi’s China, and those of the democratic West—has brought growth measured in GDP, but not the enlightenment cosmopolitanism Voltaire promised would come with it. Even as the West—North America, Europe, Australia—shares a manufacturing base with an increasing globalized world, it holds enormous power in the global economy as a body of consumers. The West’s leverage as consumers must be enlisted into the forging of a new globalized monoculture in which the SAME standards—labor standards, environmental standards, even political standards—which hold true in the democratic world are required of the nations with which the West does trade. The dignity of all labor, the dignity of the individual, must no longer be criteria which applies to the people who are governed but NOT the peoples who make the products they buy. The two are inextricable from one another, bonded by a common humanity.

In the post-pandemic chapter of globalization, the western democracies must practice what they preach. Such an insistence on higher moral standards in mass production will a) level the playing field for beleaguered workers of the west and b) correct for the ethical inconsistency of Western-led globalization which, up to this point, has fed the growth of illiberal capitalist states, undermining the very foundations on which liberal democracy and capitalism rest.

If the world is to again look to the West for guidance, the West must again guide the world with the principles that made it great.

Kurt Hofer is a native Californian with a PhD in Spanish Literature. He teaches high school history in a Los Angeles area independent school.