Globalization vs Sovereignty
The European Union is a unique experiment in international cooperation among 28 European states; it delegates some decision-making powers on matters of common interest to over-arching institutions created by the Union. Relinquishing some state authority to the broader Union has made European citizens fearful of job losses and downward pressure on wages related to globalization. The primary cause behind Britain’s vote to leave the EU, and behind increasing populism in several European states, can be traced directly to the loss of sovereignty that prevents individual states from taking independent action against these effects of globalization.
Dani Rodrik, an economist at Harvard University, has written a new book, Straight Talk on Trade: Ideas for a Sane World Economy, addressing the relationships between globalization, sovereignty and democracy. In an earlier book in 2011, The Globalization Paradox, Rodrik wrote, “[W]e cannot have hyperglobalization, democracy, and national self-determination all at once. We can have at most two out of three.” The comment goes to the heart of the conflict over UK membership in the EU. Europe’s economic integration has gotten ahead of its political integration. Further political integration would entail reducing national self-determination further, the very trend that the Brexit vote rejected.
On the question of how much national sovereignty should be surrendered in exchange for global economic integration, Rodrik comes down on the side of national self-determination. “Democracies have the right to protect their social arrangements, and when this right clashes with requirements of the global economy, it is the latter that should give way.” Nation-states have the right to protect their regulations and institutions, while not imposing those institutions on others.
Among those local practices that nation-states have rights to protect, Rodrik cites labor standards for who can work, minimum wage, working conditions and how easily a worker can be fired. He goes so far as to say that an acceptable practice in a poor country, such as child labor, would be forbidden in a rich country. The incomes of children in poor countries may be necessary to support their families.
And yet, Rodrik asserts that a nation may logically delegate authority to autonomous organizations to achieve better outcomes. He compares the relationship of European countries to the EU with the relationship of U.S. states to the Federal Government, stating that U.S. states do not have an abundance of sovereignty. “[W]hen Florida’s voters are disenchanted about the economy, they do not riot outside the state capital; they put pressure on their representatives in Congress to push for changes in federal policies.” Market integration and democracy can function side-by-side if supranational political institutions are representative and accountable.