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Can globalization survive war?

Can globalization survive war?

Since capitalism adhered to the neoliberal model, globalization has been responsible for spreading the new model throughout the world. Opening of markets, economic deregulation, privatization, prioritization of fiscal adjustments, promotion of the minimum State, everything that the Washington Consensus and the single thought claimed to be necessary and universal norms.

Suddenly, already in this century, the pandemic and the war in Ukraine came, surprisingly. The countries have once again reacted nationally to its effects, each one seeking ways to rebuild the action capacity of their States to protect their countries, taking care of their borders, putting into practice public health policies and helping the most fragile, using of state resources. The State has once again assumed responsibilities that it had delegated to private companies and the market in general. Forms of fiscal reform are imposed that seek to concentrate taxes on the richest.

Joe Biden implements economic and social investment measures that seem to break with the neoliberal policies in force in the United States for decades, such as bipartisan policies. The measures against Russia push back globalization, after a long process to convince that country and China to adhere to globalization.

At this point the question can be raised: to what extent will the neoliberal consensus survive this war and will the post-war world have a different scenario than before?

To answer whether globalization and the neoliberal model itself can survive the pandemic, the war in Ukraine and the same capitalist crisis that began in 2008, whose effects are still being felt in a large part of the countries at the center of capitalism, with effects on those of the periphery, it is necessary to go deeper into the hegemonic economic and social foundations behind that model.

Neoliberalism meant, among other phenomena, the displacement of the economic hegemony of the large international industrial corporations towards financial capital in its speculative forms. They are private banks and financial entities that, in their activities of distributing the resources of the large economic groups, concentrate them in the stock exchanges and in other forms of buying and selling paper.

They are concentrated where investments yield more, have less taxation and greater liquidity, at the expense of productive investments with their employment generation mechanisms and certain levels of income distribution. Behind these mechanisms is the hegemony of financial capital at the national and international levels.

It is necessary to define whether the new policies adopted as a reaction to the pandemic and especially to the war in Ukraine, again affect and displace the accumulation models of capitalism in a structural and permanent way, or if they are just temporary reactions, which will end with the end of the war. In other words, if international capitalism has alternatives to the neoliberal model and globalization, or if it only promotes defensive adjustments linked to the offensive against Russia.

It may be too soon for a definitive answer, before the Ukraine war ends or at least changes its present form. But it can be anticipated that there is still nothing to say that the measures taken by some governments and the sanctions against Russia, however important they may be, make capitalism walk towards overcoming globalization and neoliberalism.

The measures against Russia and Russia’s reactions imply setbacks in international economic exchanges in force in globalization. But the exchanges between the Russian economy and that of other countries will have to be resumed once the war is over. With China, the United States and the Western powers do not even dare to impose sanctions, due to the deep and structural economic relations they have with China.

The interests of financial capital were not affected, only occasionally set aside in favor of emergency measures within each country and in international confrontations.

What is evident is that, when it is necessary to attend to the urgent needs of the population, fiscal adjustment models must be limited, albeit temporarily. But the structural mechanisms that fuel financial speculation are still in place. But, once the contingency is overcome, the neoliberal mechanisms will continue.

The war still has a few chapters ahead of it, but there is nothing to say that capitalism is looking for a model to overcome neoliberalism. The only governments that take steps in this direction are Latin American governments, which do so out of the deep conviction that neoliberalism is incompatible with democracy and social justice.

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