This post is part of our symposium on Quinn Slobodian’s Globalists: The End of Empire and the Birth of Neoliberalism. Read the rest of the symposium here.
Quinn Slobodian’s Globalists has rightly received praise and critical attention as a groundbreaking study of the ideologies operative in the cloistered domains of international economic law. Indeed, the book has been reviewed favorably by everyone from radical academic critics of global capitalism through to some of the figures responsible for the construction of the neoliberal world order, with some reviews even reposted on the IMF website. Rare is the historical book that can bridge such diverse audiences, providing not just an account of past institutional contestation and reconstruction but the fundaments of today’s politics.
In this post, I want to bring out a dimension implicit in Slobodian’s book but which has not received as much critical scrutiny: the political theory behind what he calls “globalism” or “ordoglobalism” in contrast with what we might call “internationalism.” A confusion about the varieties of cross-border activity and the national politics that each entails is now rampant on the left, with what I believe are increasingly deleterious consequences for democratic and progressive aims of all kinds. A full analysis of these problems is of course beyond the scope of a blog post. Here, I hope merely to suggest the outlines of such a distinction by drawing attention to a key passage in Slobodian’s book to which other interested readers might turn and then to contrast “ordoglobalism” with a prominent form of progressive internationalism that was articulated in the last century. I then want to suggest that the doubling down of ordoglobalism has produced the current and much discussed “crisis of international liberalism” through what I call the “dialectic of globalization” (but which – following Slobodian – I might have called more precisely the dialectic of ordoglobalism).
In his final chapter (pp. 271-272), Slobodian distills the essence of the ordoglobalist argument into fifteen interrelated points, all of which point to a vision of the ‘market’ as an inherently boundary-crossing and anti-state project: capitalism as the real face of “internationalism” as against democracy/socialism. Slobodian notes that this globalism pitted itself against other forms of internationalism at the time, particularly the major pre-Cold War effort to reimagine and rework the terms of economic globalization.
This other internationalism was the push by decolonized developing countries to fashion a “New International Economic Order” (NIEO). The NIEO has lately been rediscovered, as it were, by historians interested in globalization and global justice and the politics of the Cold War and of development: noteworthy are the collection of papers in a recent issue of the journal Humanity; Sam Moyn’s recent book, Not Enough, reviewed in a symposium on this blog; and Slobodian’s Globalists itself, which discusses the NIEO at several crucial junctures as part of the political backdrop against which ordoglobalism defined itself and gathered force.
It is perhaps worth citing in full the “principles” (Art. 4) of the NIEO as adopted in the UN Declaration establishing it, observing that its principles of international cooperation are firmly and necessarily predicated on a strong conception of state sovereignty:
- The new international economic order should be founded on full respect for the following principles:
(a) Sovereign equality of States, self-determination of all peoples, inadmissibility of the acquisition of territories by force, territorial integrity and noninterference in the internal affairs of other States;
(b) The broadest co-operation of all the States members of the international community, based on equity, whereby the prevailing disparities in the world may be banished and prosperity secured for all;
(c) Full and effective participation on the basis of equality of all countries in the solving of world economic problems in the common interest of all countries, bearing in mind the necessity to ensure the accelerated development of all the developing countries, while devoting particular attention to the adoption of special measures in favour of the least developed, land-locked and island developing countries as well as those developing countries most seriously affected by economic crises and natural calamities, without losing sight of the interests of other developing countries;
(d) The right of every country to adopt the economic and social system that it deems the most appropriate for its own development and not to be subjected to discrimination of any kind as a result;
(e) Full permanent sovereignty of every State over its natural resources and all economic activities. In order to safeguard these resources, each State is entitled to exercise effective control over them and their exploitation with means suitable to its own situation, including the right to nationalization or transfer of ownership to its nationals, this right being an expression of the full permanent sovereignty of the State. No State may be subjected to economic, political or any other type of coercion to prevent the free and full exercise of this inalienable right;
(f) The right of all States, territories and peoples under foreign occupation, alien and colonial domination or apartheid to restitution and full compensation for the exploitation and depletion of, and damages to, the natural resources and all other resources of those States, territories and peoples;
(g) Regulation and supervision of the activities of transnational corporations by taking measures in the interest of the national economies of the countries where such transnational corporations operate on the basis of the full sovereignty of those countries;
(h) The right of the developing countries and the peoples of territories under colonial and racial domination and foreign occupation to achieve their liberation and to regain effective control over their natural resources and economic activities;
(i) The extending of assistance to developing countries, peoples and territories which are under colonial and alien domination, foreign occupation, racial discrimination or apartheid or are subjected to economic, political or any other type of coercive measures to obtain from them the subordination of the exercise of their sovereign rights and to secure from them advantages of any kind, and to neo-colonialism in all its forms, and which have established or are endeavouring to establish effective control over their natural resources and economic activities that have been or are still under foreign control;
(j) Just and equitable relationship between the prices of raw materials, primary commodities, manufactured and semi-manufactured goods exported by developing countries and the prices of raw materials, primary commodities, manufactures, capital goods and equipment imported by them with the aim of bringing about sustained improvement in their unsatisfactory terms of trade and the expansion of the world economy;
(k) Extension of active assistance to developing countries by the whole international community, free of any political or military conditions;
(l) Ensuring that one of the main aims of the reformed international monetary system shall be the promotion of the development of the developing countries and the adequate flow of real resources to them;
(m) Improving the competitiveness of natural materials facing competition from synthetic substitutes;
(n) Preferential and non-reciprocal treatment for developing countries, wherever feasible, in all fields of international economic co-operation whenever possible;
(o) Securing favourable conditions for the transfer of financial resources to developing countries;
(p) Giving to the developing countries access to the achievements of modern science and technology, and promoting the transfer of technology and the creation of indigenous technology for the benefit of the developing countries in forms and in accordance with procedures which are suited to their economies;
(q) The need for all States to put an end to the waste of natural resources, including food products;
(r) The need for developing countries to concentrate all their resources for the cause of development;
(s) The strengthening, through individual and collective actions, of mutual economic, trade, financial and technical co-operation among the developing countries, mainly on a preferential basis;
(t) Facilitating the role which producers’ associations may play within the framework of international co-operation and, in pursuance of their aims, inter alia assisting in the promotion of sustained growth of the world economy and accelerating the development of developing countries.
In sum, this was the predominant version of progressive internationalism in the 1970s, when countries that had come into post-colonial independence asked that the “rules of the global order” written without them be updated to reflect their interests and values. Note that the recognition of an interdependent world that needed collective refashioning did not conflict with recognition of self-determination as realized through sovereign equality in a system of independent states. Quite the contrary: it is not difficult to see how deeply threatening to the NIEO would be the ideology of ordoglobalism as Slobodian notes. Countries only recently freed from the formal domination of empire were committed to self-determination, including to collectively reworking the global rules that made this de facto difficult or impossible. They were not looking to self-abolish in the service of a borderless global capitalism, however attractive Friedrich Hayek promised them it would be.
The reaction to the demand for a NIEO is also telling: a doubling down on ordoglobalism in the established international institutions and a corresponding commitment to undermining the role of sovereign politics in the construction of the international economic order. Under a proliferation of new intellectual dispensations, progressives and what in the United States are called “liberals” (a confusing appellation) would unwittingly conspire in this ordoliberal effort by criticizing the traditional normative ground of the international order – state sovereignty and the “domestic” politics it makes possible – at the precise moment when formerly colonized peoples wished to take their place as equals on the international stage. In place of sovereign self-determination, including through its international constructions, a variety of new substantive values were said to be the real ground of international law: a respect for fundamental human rights, integration into the global economic order, “Europe” (decoded as participation in the post-war Franco-German alliance), and so on.
Where did this doubling down on ordoglobalism against (post-colonial) internationalism lead? In a recent essay on the much discussed “crisis of international liberalism,” I tried to show how, under particular institutional conditions, “globalism” can undermine “internationalism.” More precisely, I distinguished three kinds of global relations: transnationalism, supranationalism, and internationalism, and I argued that a “dialectic of globalization” can be identified in which transnationalism leads to supranationalism, undercutting internationalism.
The background to the elaboration of this dialectic was the argument that the “crisis of international liberalism” is best understood as a composite crisis of both domestic political representation and global governance, and that the underlying cause of both has been the turn toward “neoliberalism” (or in the European context, “ordoliberalism,” the differences between the two ideologies being non-germane to my present discussion; on what “neoliberalism” means in law, see this piece by Jed Purdy and me). I argued that a neoliberal economic agenda has undermined the post-war settlements both within liberal democracies and between them and non-liberal states, which have been incorporated into the global economic order, particularly following the end of the Cold War – at the high point of ordoglobalist institutional development.
The question remains how law fits into this crisis of global neoliberalism: is there a form of neoliberal legality? Put differently, what is the regime of cross-border governance that best characterizes the neoliberal era in international relations?
It has been tempting—as commentators on the left, right, and center have concluded—to understand the neoliberal era as one undergirded by “international” commitments, just as in the earlier post-war liberal era (say, 1945-1975 as its key decades). And it is certainly true that neoliberalism remains a policy choice, made effective on the global stage through treaties and related instruments of international law-making. In that sense, all forms of global governance remain, formally, international (i.e., inter-state). Nevertheless, it seems useful, and following Slobodian’s broad analysis, to distinguish what we might call transnational and supranational legality from the international mode of post-war liberalism.
These terms have been used variously across numerous academic and popular literatures. As I intend them here, internationalism indicates a form of inter-state cooperation on either cross-border issues (e.g., trade, immigration) or global public goods (e.g., atmosphere, oceans, Antarctica) that does not involve either shared sovereignty or delegation to supranational agencies. An international mode of cooperation presumes the legitimacy of existing borders as establishing distinct regulatory contexts. It thus reflects what Saskia Sassen has described as the state’s traditional purview in terms of a triad of sovereignty, exclusive territory, and citizenship. To the extent that the international management of cross-border flows does impact traditional state functions, it does not do so in a way that challenges the state as the locus of political sovereignty within its own constitutional order. It thus accepts exclusive de jure and some significant measure of de facto control over the activities that occur within its territory, which is predicated on a concept of its individual subjects as citizens. In classical international law theory, the agents (and subjects) of international law are states that exhibit this constellation of sovereignty-territory-citizenship. The post-war regime of “embedded liberalism” may be understood as an effort to achieve many of the benefits of greater economic integration within this international frame.
By transnationalism, I mean, by contrast, a form of inter-state cooperation on cross-border issues that has a deregulatory or privatizing orientation, devolving significant decision-making to individual private actors (either natural individuals or corporations) with the state serving a relatively confined and passive role as the backdrop and guarantor to private, cross-border activity. An example of transnationalism is the shift in the international trade law regime from a concern about tariffs and “at-the-border” issues (e.g., quantitative restrictions based on nationality) to a concern with “behind the border” policy convergence on “next generation” issues such as investment, intellectual property, and regulatory standardization. Likewise, the international investment regime has a supranational quality in its use of arbitral panels to judge state compliance with treaty obligations. It is important to note that a great deal of transnationalism may be what Sassen calls “de facto transnationalism,” which she has analyzed in the context of migration into the EU.
Finally, by supranationalism I mean to indicate a mode of inter-state cooperation in which significant powers, usually regulatory and adjudicatory, are transferred to international agencies with the power to refine or countermand the actions of individual states, without their ongoing consent. The main spur to theoretical reflection on supranational legal forms has been the gradual process of European integration, with “supranational” organs described as emerging from the European treaties in the 1950s. But similar supranational construction is apparent in the national delegation of decision-making power to international institutions that evolve through the judgments of what some international law scholars have dubbed “trustee courts” – like the WTO Appellate Body.
What I call the “dialectic of globalization” emerges from the increasing commitment to transnationalism in the global economy: the very boundary-crossing activity that ordoglobalism praises for its effects and values in terms of its conception of appropriate agency and sociality. Now, cross-border private activities are no less prone—and may often be even more susceptible—to generating conflicts and disputes among participants. At the same time, transnationalism alters the traditional constellation of sovereignty-territory-citizenship that defined the state as a legal and political entity by allowing foreign individuals and corporations to make routine (not exceptional) claims on it. The question then becomes: what form of legality is to settle these transnational conflicts?
One relatively straightforward solution to the problems engendered by transnationalism would be to renew forms of national regulation, dependent on existing state sovereignty. (It is worth noting that much of the current reaction against neoliberalism today is taking that form, often pushed by political entrepreneurs on the right or outside any established parties while the parties of the center-left seem paralyzed in contending with these dynamics.) The reassertion of sovereign control over transnational activities over the last decade has perhaps been most obvious in dealing with problems of global finance and migration. Where necessary, this renewal of national regulatory oversight may be made effective through engaging other sovereigns in a process of international legal construction, as occurred prominently in the post-war era. This strategy in effect dissolves (or at least reconfigures) the transnational—with both its problems and perhaps many of its benefits—as the solution to the conflicts it engenders. It reasserts national sovereignty, often in cooperation with other national sovereigns in the construction of international coordinating regimes, and thus reassigns the control of cross-border flows to the traditional structure of state-based legality.
However, what a commitment to transnationalism perhaps more obviously invites is not new international law, which requires the reassertion of state sovereignty as the foundation of international cooperation, but rather new forms of supranational governance.
Supranational governance promises a form of convergent, harmonized, or otherwise reciprocal treatment across borders, and this mode of legality—not a reassertion of the political at the national level—is what powerful economic actors most require for the maintenance of transnational flows. While the renewal of national regulation necessarily involves the assertion of collective public orderings over private ones in new legal ascriptions, supranationalism enables the possibility of addressing transnational conflicts in a continuing depoliticized mode of legality. Note that this depoliticization may not be merely contingent—as if the supranational were a space of incipient cross-border democratization, as many of its advocates suppose—but instead stems from the coordination required to make national regulatory regimes compatible across borders, as Friedrich Hayek acutely observed in a 1939 essay in which he advocated European unification precisely as a stay against the economic planning that he thought it would preclude.
Drawing together these different conceptions of border-crossing activity, we can observe a “dialectic of globalization” (or perhaps “ordoglobalism”). This dialectic describes the way that deregulated cross-border flows (transnationalism) stimulate new forms of cross-border governance (supranationalism) that in turn serve to consolidate further flows. First comes the empowerment of transnational (private) agents, on neoliberal grounds, which stimulates a supranational agenda in filling out cross-border governance gaps as necessary. This process is obvious in the transformation of international trade law, where significant private economic flows across borders generate a desire for supranational rather than national governance to address disputes, and in international investment arbitration, in which transnational investment flows are rationalized as requiring supranational adjudicatory structures (whether ad hoc or formalized). More generally, the strategy of piecemeal European unification has been predicated on the expectation that cross-border economic integration generates problems to which supranational political agency provides the solution.
Neoliberal legality thus begins in transnationalism but finds its completion in a depoliticized mode of supranational governance, which in effect extends the model of the “deregulated” national economy to the global level. The turn to neoliberalism brought a change in the legal mode of inter-state relations from an internationalist orientation characterizing the first decades of post-war liberalism to a “dialectic of globalization,” in which newly empowered transnational activity across states generates pressure for supranational governance above them.
To summarize, we may wish to observe the following connections in the study of embedded liberalism and neoliberalism. Post-war embedded liberalism was, in the main, an international mode of governance, excepting the novel and restricted emergence of the supranational in the European Coal and Steel Community. The neoliberalism that has overtaken it gradually, subsuming its substance while maintaining much of its form, comprises a depoliticized mode of transnational legality, which brings with it pressure toward a supranational mode of governance. While embedded liberalism remains aspirationally inter-state (i.e., international), neoliberalism pushes toward the global oversight of cross-border activity undertaken by private agents. This dialectic works to consolidate a neoliberal orientation to regulation at both the domestic and global levels, generating the crisis of “international liberalism” understood as a composite crisis of domestic representation and global governance.
How does neoliberal legality compare with the traditional state-based legal order? We can take Saskia Sassen’s description of a constellation of sovereignty- territory-citizenship as a useful starting point. In the place of state sovereignty, we find a new emphasis on governance, which can involve forms of shared and overlapping jurisdiction, extensive delegation to private actors (“public- private partnerships”), and a reliance on networked rather than hierarchical modes of social control. While sovereignty entails a legal order over particular territory, the emphasis in governance is instead on norms. The move from territory to norms entails a potentially open- ended and flexible process in which the control of activity is indexed not to the location in which it occurs but to the norms which are deemed relevant to its management. The determination of which norms ought to apply to which activities is itself negotiated through the governance process, often with an emphasis on functional attributes and institutional competencies. Finally, in the place of citizens, neoliberal legality emphasizes stakeholders, with some version of the principle of “affected interests” rather than a traditional view of collective self-determination central to the question of who ought to be involved in the process of norm-setting.
The move from the constellation of sovereignty-territory-citizenship to the new constellation of governance-norms-stakeholders is far from complete and may not even be possible to complete, for rather deep reasons. In different domains of global activity, the transformation may be more advanced than in others, but the purpose of delineating these categories at all is to suggest what the dialectic of globalization pushes toward. It seems to me that the current crisis of international liberalism may thus be decoded as a crisis in the very political structure that is the foundation of international law itself: the state capable of making and committing to international cooperation.
Neoliberalism as an ideology of global governance—Slobodian’s “ordoglobalism”—thus not only prevented the realization of the radical internationalism of the 1970s, as seen in the failure of the NIEO. It now threatens even the liberal international order that birthed it.