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A Dollar for Democracy

A Dollar for Democracy

Western optimism around globalization has shattered in recent decades. Can it still play a role supporting liberal democratic aims? Elisabeth Braw sees a path forward in her new book.

Axel de Vernou
Goodbye, Globalization: The Return of a Divided World
by Elisabeth Braw (Yale University Press, 336 pp., $30.00)

In 1989, Chinese Communist Party (CCP) tanks rolled across Tiananmen Square and the West’s hopes of Beijing’s political liberalization. Two years later, the collapse of the Soviet Union would draw American investors and politicians to Russia, in an attempt to prop up a wobbling economic giant and steer the country toward Western-friendly reforms enabled by its then president, Boris Yeltsin. Although these two pivotal events pointed in opposite directions, Washington applied the same strategy to both China and Russia in order to integrate them into the global economy. Approximately three-and-a-half decades later, the results are in—and they are none too reassuring.

In Goodbye, Globalization: The Return of a Divided World, Elisabeth Braw traces how the West’s business and government leaders of the 1990s and early 2000s dismissed how economics-driven globalization might paper over unbridgable political differences between countries now locked in financial partnership. This first major experiment in globalization, as defined by Braw, was “an effort by all manner of politicians and business leaders to create an interconnected world” that would improve the lives of almost everyone in the world economy. However, the architects of this globalization failed to take note of the warning signs that these newfound economic ties were paradoxically accelerating the shift to a fractured global arena. Drawing from a plethora of interviews with the individuals who were first optimistic, then skeptical, and finally disillusioned by unconstrained international partnerships, Braw’s investigative work offers a timely analysis of today’s geopolitical landscape.

Her story begins and ends with the Nord Stream pipelines, which epitomized European hopes about Russia that waxed and waned at the turn of the 21st century. In 2009, European geologists, investors, and engineers began meeting with their Russian counterparts to work out the final details of a project to pump Russian gas to Germany through a 1,224-kilometer channel underneath the Baltic Sea. By 2011, German Chancellor Angela Merkel was standing side-by-side with French Prime Minister François Fillon, Dutch Prime Minister Mark Rutte, and Russian President Dmitri Medvedev to celebrate a new era of energy-based cooperation between Russia and Western Europe.

Each of these European actors was so persuaded that the endeavor was facilitating rapprochement between Europe and Russia under the banner of globalization that, a decade later, the last joints were welded together for a second pipeline project, Nord Stream 2. Before and between these two events, however, European policymakers ignored an astounding number of red flags about Russia’s true intentions: Russia’s 2008 invasion of Georgia; Putin’s political crackdowns following his 2012 return to the presidency; Russia’s annexation of Crimea; the Kremlin’s accusations of American intervention in its region; and Western doubts about Russian election interference. 

Nevertheless, clinging to the maxim often ascribed to 19th century French economist Frédéric Bastiat that “when goods don’t cross borders, soldiers will,” European leaders cheered on the energy initiative. Within half a year of Nord Stream 2’s completion in 2021, Russia launched a full-scale invasion of Ukraine. Suddenly, European leaders—especially in Germany—were blushing at their past assurances about Russia’s supposedly Western-aligned democratic and economic development.

At the same time, an almost identical fallacy was guiding Western relations with China. In this instance, though, it was not a question of gas but data flowing across borders. In the 1990s, China’s economy was growing at an extraordinary rate. Swedish telecommunications company Ericsson believed it would have been remiss not to tap into it. There was just one caveat: CCP officials required Ericsson to cross-license with Huawei, the nascent leader of China’s telecoms industry. The drawbacks of such a requirement seemed minuscule to a company as large as Ericsson. And indeed, the Swedish giant’s sales to Chinese customers reached $1.7 billion in 2020 alone.

But once again, as Braw reminds readers, since that 2020 height, the vertiginous crash in Ericsson's sales to China these past few years was arguably inevitable, thanks to the rose-colored glasses through which the West viewed China during the height of globalization. Beijing’s impressive 2008 Summer Olympics, systematic Chinese declarations of mutual friendship, and, perhaps most importantly, the strong financial performances in Asia’s largest market rendered Western technology companies blind to the constant IP-theft that ate at the corners of annual profits and threatened clients’ personal privacy.

Braw uses the Nord Stream and Huawei case studies in parallel to highlight the illusions that the West has held about Russia and China. In doing so, she indirectly argues that the West failed to perceive a deep-seated connection between these authoritarian powers. Both were openly refusing to democratize, or to follow international laws despite their integration in global markets. Braw points out, for instance, how despite Russia’s annexation of Crimea and China’s fabrication of artifically-made islands in the South China Sea in 2015, investments in China continued unabated.

To underscore further how authoritarian countries have exploited the West’s naïveté to advance their own domestic goals, Braw includes a discussion of Iran. The Obama administration’s Joint Comprehensive Plan of Action (JCPOA) represented the peak of the Western globalist hope that Iran would abandon its nuclear plan and related inimical political objectives in exchange for greater access to the world’s markets and all their related financial benefits. Executives, consultants, and bankers rushed to Iran when its top officials only hinted at a willingness to modernize the country with the West’s help. But these were clearly illusions for Western eyes, embraced despite clear indications that Iranian scientists were pushing forward with their nuclear program. These mirages have now almost entirely evaporated, in the wake of Iran’s brutal crackdown on the Women, Life, Freedom movement and peaceful protests commemorating the death of Mahsa Amini, a young Iranian woman who’d challenged the country’s compulsory hijab law and who died while in custody.

The Trump administration, by and large, saw through the window dressing and took a more overt public stance than recent presidential administrations. President Donald Trump warned German parliamentarians of the consequences of falling under Russia’s grasp; began the effort to unroot Huawei-built parts in sensitive American infrastructure; and pulled the United States out of the JCPOA. His qualms about globalization resonated with a significant part of the U.S. electoral base. Braw argues that despite these actions, Trump’s occasional prescience was undermined by his unpredictable expressions of faith and adulation toward Chinese Premier Xi Jinping and Russian President Vladimir Putin, and his abrupt withdrawals from commercial agreements that would have reinforced alliances such as the Trans-Pacific Partnership.

Now that the world has arguably broken up into several geopolitical blocs, and Russia, China, and Iran have formed their own authoritarian front, is it safe to say that globalization is a lost cause? Not quite, Braw maintains. Instead, the West must learn from its past experiences to pioneer a globalization 2.0—a term that one of Braw’s interviewees, former chairman of Ericsson Michael Treschow, uses in the book. Braw summarizes it as engaging with globalization “less naïvely… and addressing issues such as climate change” which were ignored during the nineties. 

This definition leaves readers yearning for specificity, and indeed, one of the book’s shortcomings is that its recommendations for an improved form of globalization are too vague. For instance, Braw diagnoses the West’s “lecturing” on human rights issues as a reason why countries fell into China’s embrace. However, she provides few concrete recommendations as to how Western countries can provide aid to the Global South and include reform benchmarks that won't be perceived as onerous human rights mandates in the eyes of less democratic governments. Without these benchmarks, the West will repeat the same mistake it made when it assumed that economic aid to China and Russia would naturally lead to democratization. However, Western policymakers must also recognize that they may lose potential partners if they insist on democratic reforms that are profoundly antithetical to these countries’ deeply engrained cultural and societal traditions.

Western politicians and business leaders should see globalization 2.0 as a middle ground between the excessive flexibility given China and Russia in the nineties and the unrealizable demands made of developing countries over the past few decades. Washington’s current approach to India, guided by a fragile balancing act between technological cooperation through the Quad and pressure on New Delhi to decrease dependence on Russian arms, is a successful case study of how globalization 2.0 should look.

Braw emphasizes that the West’s efforts at promoting a new wave of globalization should be directed at problems faced by all countries across the world. One example is climate change, which represents an opportunity for politicians, scientists, and business executives from different parts of the globe to cooperate in finding sustainable alternatives to current production processes. This is another issue in which the Global South has felt historically neglected by international organizations. Accordingly, the West must work with its adversaries to lead strategic outreach initiatives to particularly vulnerable countries.

Finally, the West will have to embrace the new prospects made available by today’s rapidly evolving technologies to pioneer a form of globalization unconstrained by geopolitical tensions. As Braw explains, artificial intelligence (AI) could make it possible to establish more self-reliant supply chains in countries with which the United States has a weaker relationship. Entrepreneurs could inaugurate new production lines and factories without sending waves of managers and politicians in-country, dictating their own agendas. Unfortunately, Goodbye, Globalization does not mention how AI’s risks may undercut efforts at implementing globalization 2.0. AI may exacerbate ideological divisions between countries, making it more difficult for them to cooperate economically, thus decreasing the likelihood of the democratic reform desired by Western leaders.

Although globalization 2.0 may be less direct than its previous iteration, it promises to be more sustainable in its incorporation of new technologies and flexible policies tailored to each country’s national interest. As regional and international conflicts surge around the globe, this may offer a more stable alternative for today’s divided world.

Axel de Vernou is a junior at Yale University studying history and global affairs. He is a research assistant at the Yorktown Institute.

Image: A close-up of the engraving of Benjamin Franklin on a U.S. $100 dollar. Image has been color adjusted from the original. (Unsplash: Adam Nir)

AuthoritarianismDemocracyEconomicsEastern EuropeU.S. Foreign PolicyUnited StatesLatin AmericaPolitical PhilosophyChina