Debating the course of globalisation

RECLAIMING THE FUTURE: New Zealand and the Global Economy,
by Jane Kelsey (Bridget Williams Books, $39.95)

Reviewed by Keith Rankin

Evening Post, 24 Sep 1999

JANE Kelsey's latest book is a generally restrained and well-written critique of the globalisation "agenda" and its impact on future economic policymaking in New Zealand.

"Globalisation and domestic restructuring were," she says, "flipsides of the same coin."

The agenda - she overuses the word - is commonly known as the "Washington Consensus", reflecting the emergence of a democratically unaccountable global bureaucracy centred on the international Monetary Fund and the World Bank.

Closely aligned are the Paris based OECD - sponsors of the so-far failed Multilateral Agreement on investment (MAI) - the Geneva-based World Trade Organisation (WTO), and private sector players such as the Wall Street credit-rating agency Standard and Poors.

Apec, a loosely structured organisation with the twin goals of opening Asian markets to North America and setting the non-Pacific world an exam- pie of free trade in action, also gets the full force of the Kelsey serve.

Professor Kelsey structures her argument around Karl Polanyi's now fashionable (and deservedly so) 1944 analysis of the creation of a "self-regulating market economy" and the inevitable backlash (already under way) to ft.

Globalisation is both the utopia of a global self-regulating economy and the repressive political means of "embedding" it into the de facto constitutions of nations like New Zealand.

She makes the crucial distinction between a nation's internal and external sovereignty. For internal policymaking, a nation's parliament is sovereign. However, the negotiation of external treaties is treated by most nations, including New Zealand, as the prerogative of the executive wing of Government and may be conducted in secret.

Existing conventions on external sovereignty are therefore the Achilles' heel of our nation's democracy. international obligations discourage national Governments from pursuing popular policies, such as tariff protection or raising the social wage, that 'night "scare the horses" in Wall St or Washington.

Kelsey is somewhat ambivalent about democracy, however. While re cognising MMP as a check on "blitzkrieg" economics, she says it can be "a fetter on a party that seeks to promote an alternative agenda".

Nevertheless, instead of pushing for an alternative blitzkrieg, she advocates "a vigorous and open contest of ideas that is rooted in social reality, not economic dogma" as a means to steer future national policy.

Although she writes from the premise that globalisation is a form of political blackmail and concludes that much of it is bluff, she sensibly accepts that we must "rethink the role of the nation-state in a constantly changing international environment".

Reclaiming The Future is an excellent contribution to the globalisation debate.

Kelsey, a law professor, is at her best when describing the modi operandi of extranational economic institutions. We owe ft to ourselves to be critically informed about the interests behind the advocacy of a borderless world economy.