[Escaping] the crumbling foundations of the liberal world order

| 20th June 2018
Collapsing buildings

"Collapse" 

Systems thinking - and in particular game theory - can provide startling new insights into how and why liberal economics is leading to a fatal depletion of ecological landscapes. It can also provide 'an alternative pathway', writes DR ROBERT BIEL

The way forward becomes clear: commons approaches to stewarding and preserving nature - rather than depleting it - unleash an abundant free energy which opens up an alternative pathway to win-win solutions.

A huge motive for the systems approach is to explain why our social structures go wrong: systems we’ve created, but which turn against us.

This is nowhere more evident than with international politics and economics, which have caused so much damage, to environment and society alike. Understandably, we aspire to order and stability…but not in some form which entrenches injustice.

Over recent decades, we’ve grown accustomed to a certain world order, which today is suddenly challenged – from multiple, maybe contradictory directions. 

Exploitation of nature

We’re entering unfamiliar territory, which opens up many possibilities – some bad, but others potentially good.  We need to understand Trump, the EU, the rise of Asia, what all this signifies, and how we might transition to a just and sustainable world.

So let’s explore some tools from systems theory.

Here, I specially want to emphasise the hidden ecological dimension which underpins all issues of international order/disorder.

Both nationalism and liberalism typically fail to recognise this - but if we take this into consideration we may find a way through the impasse.

Game theory offers an interesting insight into the - often unintended - logic unleashed by our decisions. Each strategy attracts rewards, called ‘payoffs’. What the theory usually fails to articulate is how the payoffs are funded by the exploitation of nature, we’ll return to this in a moment.

Improved efficiency

A purely competitive situation is called ‘zero-sum’.  One side gains exactly what the other loses (+1-1=0).  An example is the ‘mercantilist’ policy, which prevailed under nascent capitalism  during the 16th-18th centuries.

Governments strove for a trade surplus at all costs.  Logically, it’s not possible for everyone to achieve this at the same time - so the result is to unleash a highly conflictual politics.

The founders of liberal theory sought a way to avoid this. Their goal was laudible: to replace all-out nationalism/conflict with tolerance and cosmopolitanism.

If only you could show that co-operation is a win-win situation, unlike zero-sum, which is win-lose. Early 19th-century economist David Ricardo believed he’d solved this problem. 

Free trade generates an ‘extra’ value, derived from the improved efficiency when each country specialises in producing what it ‘does best’, rather than vainly seeking to produce everything. He called this comparative advantage.

Someone's anvil

But this goal was hard to attain in practice. The reason is explored through another insight from game theory: the prisoners’ dilemma (PD): although a co-operative strategy would objectively benefit all parties, it’s generally too dangerous for one party to be first to implement it.

The system therefore remains locked in a bad equilibrium which benefits no-one, but is extremely hard to escape. Accordingly, right through the 19th century and first half of the 20th, capitalist countries remained competitive, economically and militarily.

Around the turn of 19th -20th centuries, there occurred a major phase-change: the advent of what’s known as imperialism, part of which was a feverish colonial expansion.

Most obviously, this seemed to augur even more intense competition. A quote from Goethe, popular with early imperialists, nicely depicts both the zero-sum situation and the PD: ‘Be hammer or anvil’.

You either do the bashing, or you get bashed. Goethe wasn’t advocating this, he just found a poetic way to express it! You may not relish hammering others, but it’s the only way to avoid being someone else’s anvil.

International game

The Malthusian interpretation of ‘limits’ perfectly fits this argument, depicting a resource ‘pot’ whose size is constant.

Funnily enough, the early imperialists - from around 1900 - thought in quite an ecological way. One of them,  Halford Mackinder, spoke of “human history as part of the life of the world organism,” within which “nature in large measure controls”.

They respected nature’s limits…as an incentive to grab those finite resources for themselves!

Predictions of intensified conflict were confirmed by two World Wars. Nonetheless, Ricardo’s promise of escaping the zero-sum trap remained tempting.

But to achieve this, it seemed, the ‘pot’ for the international game must no longer be finite: it would need to grow. This is actually one of the main incentives for economic ‘growth’.

So let’s consider - what would be the source of the enlarged pot?

Joint hegemony

Supposedly, the greater efficiency of specialisation under conditions of free trade. But actually - I would say -  it is the intensified plunder of nature. We can see this in two ways:

First, economically. The Ricardian model liquidates any localism and self-sufficiency: it implies an extreme alienation and loss of place, destruction of natural commons and of all the ways in which societies traditionally stewarded resources and shielded them from unbridled depletion.

And there’s social depletion too, because you’d be wiping out whole communities and cultures which grew up around particular productive traditions.

Added to this, is the immense environmental cost of transportation, if balanced economies are dismantled and everyone has to import everything.

Second, politically. If imperialist states could co-operate instead of fighting each other, they could exploit the global South – and its resources – more intensively through a kind of joint hegemony.

Ultimate enforcement

The advent of such a collective dominance was anticipated by one of the most astonishing contributions to the critique of imperialism, from around 1900: the work of J.A. Hobson.

Hobson predicted the advent of a parasitic alliance/federation of the Western States to control a world order in which semi-colonial countries performed the labour and imperialists reaped the benefits.

This order was effectively realised post-World War II, when the North/West gradually – via the Bretton Woods system – introduced free trade, leading eventually to full-scale globalisation from the 1980s onwards.

Although there’s nothing wrong with trade if it’s really free, globalisation actually meant something altogether different: privatising commons and public goods - such as water - so they could be bought by global conglomerates, privatising ideas - ‘intellectual property’ - with the same result, getting the South to pursue a phoney comparative advantage in poor working conditions and lax environmental rules.

This takes us to the tragedy of Obama.  The only way he could imagine to preserve the cosmopolitan project, was a fuite en avant toward the ultimate enforcement of open world economy.

Food sovereignty

The nightmare result is seen in treaties like the Transatlantic Trade and Investment Partnership (TTIP), negotiated secretly with Europe, which would virtually outlaw any local defence against the corporate plunder of nature.

In this way, the good face of socio-political liberalism had become so much subordinated to market fundamentalism, and the enslavement of the globe to the parasitic Western federation, that progressives couldn’t really defend it.  Hence the backlash: Trump, exclusion, xenophobia in Europe.

Our task today is to rescue tolerance and cosmopolitanism from this debacle, and establish them on a new basis. Luckily, such a basis exists in social movements.

An example could be grassroots campaigns for ‘food sovereignty’ which, while not a finished concept, open up a fascinating debate.

Alternative pathway

This is interrogating sovereignty in new ways, and is no longer about exclusionist nationalism or dominating nature within a national territory. Rather, it is about autonomy and a rediscovered, non-exclusionary, localism. 

From the narrow standpoint of economic liberalism, it’s hard to find any escape from conflict over scarce resources, other than an inexhaustible environmental ‘pot’.

But if we transcend this, the way forward becomes clear: commons approaches to stewarding and preserving nature - rather than depleting it - unleash an abundant free energy which opens up an alternative pathway to win-win solutions.

This Author

Dr Robert Biel teaches political ecology at University College London and is the author of The New Imperialism and The Entropy of Capitalism. He specialises in international political economy, systems theory, sustainable development and urban agriculture.

 

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