Socialism Make a Comeback? Globalization Protests Show New Potential
By Francis Fukuyama
socialism signifies a political and economic system in which the
government controls a large part of the economy and redistributes
wealth to produce social equality, then I think it is safe to say
the likelihood of its making a comeback anytime in the next generation
is close to zero. But the egalitarian political impulse to constrain
the power of the wealthy in the interests of the weak and marginal
remains strong and is already making a comeback. There are good
reasons for thinking this impulse will not lead to new radical groups'
achieving political power and implementing a coherent political
agenda. Though, in the process of trying to influence the course
of events, the global left may invent an entirely new form of governance
that will act as a strong brake on multinational corporations and
the governments that serve their interests.
with the reasons why the economic system we called socialism back
in the 20th century is unlikely ever to return. Today it's a cliché
to say that socialism didn't work, that it produced a society in
which, as the Soviets used to joke, they pretend to pay us and we
pretend to work. In fact, socialism did work at one period in history:
during the 1930s, and again in the '50s and '60s, socialist economies
like that of the U.S.S.R. grew faster than their capitalist counterparts.
But they stopped working sometime during the 1970s and '80s, just
as Western capitalist societies were beginning to enter what we
now call the information age.
There is one
basic explanation for this. As the libertarian economist Friedrich
von Hayek once pointed out, the bulk of information generated in
any economy is local in nature. If this local information has to
be processed through a centralized hierarchy—whether government
ministry or even overly large corporate bureaucracy—it will
inevitably be delayed, distorted and manipulated in ways that would
not happen in a more decentralized economic-decision-making system.
The U.S.S.R. used to have an office called the State Committee on
Prices, where a few hundred bureaucrats would sit around setting
every price in the Soviet economy. Imagine how well the U.S. economy
would work if every price for every product had to be determined
in Washington—in an economy in which a single Boeing 777 airliner
can have as many as 3 million separate parts, each with its own
As an information
economy becomes more complex, more technology intensive and demanding
of ever higher levels of skill, it is no surprise that decentralized
decision making—what we otherwise call a market economy—takes
over from central planning. But there is another factor at work
as well: globalization, along with the information-technology revolution
that underpins it. A country that decides to opt for a heavy-handed,
government-controlled economy will find itself falling further and
further behind countries that are economically freer. Formerly,
it was possible for socialist countries to close themselves off
from the rest of the world, content that they had achieved social
justice even if their economies appeared to be stagnating. But with
more information, your citizens simply know too much about the living
standards, culture and alternative approaches of other societies.
Since the world is not likely to get less complex and technological
in the future, there is no reason to think that top-down, command-and-control
methods are going to work any better than in the past.
But the impulse
toward social equality has not disappeared. Those who may have been
tempted to believe it has disappeared in our Everyman-is-a-stockholder
age received a jolt at the Seattle meeting of the World Trade Organization
late last year, and at the World Bank-IMF meetings in Washington
in April. The left may have gone into momentary hibernation after
the fall of the Berlin Wall, but it never disappeared, and it is
now re-energized by an enemy called globalization.
There is plenty
about our present globalized economic system that should trouble
not just aging radicals but ordinary people as well. A financial
panic starting in distant money centers can cause you, through no
fault of your own, to lose your job, as happened to millions of
people during the Asian financial crisis of 1997. Modern capitalists
can move their money in and out of different countries around the
world at the speed of a mouse click. Democratic countries find that
their options for political choice—whether in the realm of
social policy, economic regulation or culture—are curtailed
by the increased mobility of financial capital and information.
Do you want to extend your social safety net a bit further? The
faceless bond market will zap your country's interest rates. Do
you want to prevent your airwaves from being taken over by Howard
Stern or Baywatch? Can't do it, because the world of information
is inherently borderless. Do you want to pass a law to protect endangered
species in your own country? A group of faceless bureaucrats in
the WTO may declare it a barrier to trade. And all this is true
in boom times like the present—think of how people will regard
global capitalism during the next economic downturn!
So the sources
of grievance against the capitalist world order are still there
and increasingly powerful. The question is, what form will the backlash
against globalization take?
It is clear
that socialism cannot be rebuilt in a single country. Workers pushing
too hard for higher wages in Michigan will simply see their jobs
disappear to Guadalajara or Penang. Only if all workers around the
world were unionized, pushing simultaneously for a global rise in
wages, would companies be unable to play off one group of workers
against another. Karl Marx's exhortation "Workers of the world,
unite!" has never seemed more apt.
In theory, then,
what the left needs today is a Fourth International uniting the
poor and dispossessed around the world in an organization that would
be as global as the multinational corporations and financial institutions
they face. This Fourth International could push for powerful new
institutions to constrain global capitalism. One analogy is the
Progressive Era in the early 20th century, when labor unions began
to mobilize and the U.S. government developed regulatory powers
to catch up with the reach of such powerful corporations as Ford
and Standard Oil.
route to quasi-world government based on socialist principles is
for the left to take over the WTO and use it to promote labor rights
and the environment rather than free trade. But the left in the
developed world finds opposition to this project from poor countries
themselves. The WTO is a rather weak organization as it is, dependent
upon consensus among its members, and the effort to use it to promote
political causes may mark its demise.
Beyond the WTO,
it is hard to see how the left will agree on, much less create,
new political institutions on a global scale, given the huge differences
in interests and culture separating the various groups involved.
The coalition represented in Seattle and Washington is very fragile
and internally divided—the AFL-CIO will turn on dolphins or
sea turtles the moment one of these creatures threatens the job
of a unionized worker. While American unions pay lip service to
the interests of workers in China, they actually feel themselves
in direct competition with the Chinese for the same low-skill jobs.
The inability to organize at an international level leads an important
part of the left down the road toward protectionism and the safeguarding
of American wages and the environment through actions like opposition
to the North American Free Trade Agreement and to China's entry
into the WTO.
So where will
the socialist impulse lead? Perhaps if it cannot create formal instruments
of power, it may invent an entirely new form of governance that
might be called government by NGO, or noNGOvernmental organization
(contradictory as this may sound). In the recent past, the giant
multinational Royal Dutch Shell was forced to back down from important
projects in Nigeria and the North Sea as a result of pressure from
environmental groups like Greenpeace. NGOs—which are loose
affiliations of people based on special interests such as environmentalism—have
shown that even if they cannot create institutions that anyone would
label socialist, they do have the power to constrain companies and
governments from taking actions that harm the interests of the poor
and the environment. There is a huge variety and density of such
third-sector groups in the world today, benefiting from the same
inexpensive information technologies as global corporations.
is a long way from anything we recognize as socialism. But the world
has changed, and the requirements for effective political action
are different today than they were in the 20th century. So while
classical socialism may never make a comeback, the impulse underlying
it is in the process of leading the world to unfamiliar forms of
interaction between left and right. In this respect, Seattle and
Washington may be harbingers of things to come.