Disembedded Liberalism: Why global

Bringing together democratic theory and international political economy literatures, I begin with the thesis that economic globalization is undermining the embedded liberalism of the post WWII era. Embodied in the Keynsian welfare state, embedded liberalism held out democratic avenues for disaffected groups to hold political actors responsible for suffering induced by market forces. Transformations in the global economy, however, constrain the options available to governments and curtail avenues of democratic accountability. Some have argued that the market itself can provide an adequate alternative. This view is deeply flawed. Drawing from the economic theory of Hayek and Friedman, I discuss how markets can operate as accountability mechanisms. I then turn to Karl Polanyi to discuss how markets that become disembedded from social contexts induce severe consequences for society and the environment. These consequences exceed what markets alone can account for. What’s more, as Habermas has observed, the system logic of markets is incompatible with the deliberative contexts in which democratic decision-making takes place. To propose markets as the solution to democratic deficits is to miss the point that it is the substitution of markets for social regulation that generates many of the problems in the first place. It is also to ignore the ways markets undermine the very spaces in which legitimate solutions can be determined. Somehow the effects of market accountability need to be accounted for. For this, there can be no substitute for forms of democratic deliberation that are themselves not reducible to market pressures.