The Power of Finance and the Erosion of Democracy

• In Event: Globalization, Populism and Democracy

Abstract

Nationalism, especially ideological nationalism, however important in the transition to supposed "modernity" up to the middle of the 20th century, was ultimately a negative structural trend, giving rise to two world wars, fascism, Third World dictatorships, etc. It was partly counteracted by "embedded liberal" American hegemony in the post-Second World War period, but that has been declining for decades, especially since the end of the Cold War but also with the technological impact of the Third/Fourth Industrial Revolution(s). The result has not been the creation of more crosscutting identities and loyalties, but is leading to a backlash -- not the potentially positive neo-social democratic longer term outcome proposed by Colin Crouch in The Globalization Backlash, but more the "dialectic of globalization and fragmentation" -- the new anarchy, heterarchy, transnational neopluralism, etc. This puts economic special interests that can organise transnationally into the driving seat, especially through financialization.This in turn transforms the nation-state into an increasingly ineffective "reactive state," trying to deal with the ever-increasing impact of globalization/fragmentation, but failing and falling prey to the sorts of neo-nationalistic reactions Reinhold Niebhur talked about in Moral Man and Immoral Society (1932) . "Make America Great Again", Brexit, "illiberal democracy", etc., mean losing, not gaining, control.

Authors

• Philip G. Cerny, University of Manchester

• Rosalba Belmonte, Tuscia University