Global markets, nation states, and democracy can and do coexist but, at varying levels. Rodrik’s argument focuses on the inability of all three to coexist, rather two can coexist at the expense of the other. Of course, elements of the trilemma do exist. However, Rodrik fails to explain that externally many countries permit levels of all three factors coexisting, even though internally there may be some fragmentation. Rodrick’s Capitalism 3.0 may quell these fragmented disparities, but, this a wholly idealistic concept, and unlikely to be attained. The smaller players in the global market, tend to be more susceptible to uneven levels of all three. In this sense, a similarity emerges toward the argument of Rodrik, who sees trade-offs taking place that prevent all three coexisting. These trade-offs, however, are much smaller than Rodrik suggests. To an extent the ability of all three to coexist lies in the changing definitions of democracy, nation-state and global markets. All three concepts have adapted to fit with the current political, economic and social landscape – no longer permitting the same ideals they did 100 years ago. The expansion of the global market, particularly since the introduction of almost limitless credit via central banks QE policies, has meant that every country can reap the rewards of the global market, but must also be alive to the major risks of building this type of global structure. Within this expansion, there is a hierarchy of favourability in terms of who reaps the most rewards. This disparity is heightened by countries’ who rely on their multinational corporations to pursue their nations economic interests overseas, who benefit the most from the globalisation. Additionally, most countries refer to themselves as a nation state, restoring ideas of nationalistic pride and sovereignty, which gives a country strength on the global stage. Strong nation-states no longer have to be self-sufficient, instead, a strong position within the global market secured via international agreements and trade blocs, secures this sense of sovereignty externally. Internally, sovereignty is secured via a promotion of national pride and values. Brexit, for example, is likely to heighten national sovereignty internally and externally. Finally, the term democracy has evolved as a contest between the state yielding enough power to govern and making sure that their electorate feels they have a say in policy. This makes the term hard to define. Many countries identify themselves as a democracy – although, in the literal definition they are not, they put up an illusion of the latter, due to the undesirability of the alternatives. In this sense, these definitions do coexist for many states. The British exit from the European Union (EU) will further promote the fusion of all three on an external level and will strengthen the relationships between the three that already exist. They will not create new ones, differing from the argument of Rodrik.
The world now revolves around the global market and, due to trade integration and the creation of the global credit market, everyone, however big or small their input is a player. In this sense, everyone reaps the benefits from the global market, but also, the consequences. Many of the key global players have embraced this hyper-globalization, where success, no longer routed in self-sufficiency and trading success relies instead on the efficiency of trading blocs, country groupings and alliances. It is in this way that hyper-globalisation has evolved and will continue to grow. The sheer size of the global economy now means that it does not need to co-exist with the other two as it is a constant mechanism. But, it can, and it does. The degree to which it coexists with nation-states and democracy, are susceptible to variation. In order for all three to coexist at a higher rate, countries have had to adapt to hyper-globalisation by forming trade blocs. These blocs are wholly beneficial to countries’ economic activity, by promoting free trade and growing certain sectors, whilst securing a sense of protectionism within global politics (Wang, 2010). Having a strong position within these blocs consequently affects a countries growth, which is likely to reassert national identity and the promotion of democratic values. The North American Free Trade Agreement (NAFTA) for example, has been extremely beneficial for all parties involved. Mexico has seen over 5% worth of growth to its economy since joining, which has consequently given the country stability therefore increasing levels of democratic values and strengthening national-sovereignty following the Peso crisis (Griswold, 1998). Furthermore, the European Union has become one of the most powerful trading blocs in the world since its creation. Yet, as the EU has expanded from a 6-nation trading group to a 27-country economic and political federation, its powers have also expanded – but, not always in the interest of democracy or social cohesion. No longer does the EU represent a true trade bloc more, a European technocracy and it is within this current framework that all three factions no longer coexist (Rodrik, 2014). Brexit now seeks to reframe notions of democracy and sovereignty, preferably not expensed at the growth of its trade and economic well-being. If the EU had remained true to its original purpose, it is unlikely that Brexit would have occurred. Trade blocs that have remained restricted to their primary purpose (e.g Trade), and resisted the pitfalls of expansionism, have become an extremely important factor in determining a countries success in the global markets, which consequently heighten the strength of a nation and its democratic values. If a trade bloc remains within its reach of a being a union of countries for trade purposes only, it is likely that all three factors will coexist going into the future.
Additionally, lower levels of cohesion are apparent in the current economic climate. Smaller countries are starting to seek larger roles in the global economy – globalisation has made this apparent. This is achieved by securing trade deals with larger countries or multinational corporations – in most of these situations win/lose deals are set out, normally (but not always) for the benefit of the larger counterpart in the long run. Lindvall describes the winners and losers of coalition government policy; this idea can be expanded upon on a global and economic level. For example, the deal set out by Germany toward Greece following their debt crisis can be viewed as a win/lose deal. German banks profiteered as a result of the deals set out, whilst Greece had to obtain to strict rules in order to remain in the EU and avoid financial “strangulation” (BBC News, 2015) (Shuster, 2015). Not only was the crisis an example of a win/lose deal in practice, but it also showcased the Germans extended hand within the EU. These deals seek to promote countries positions temporarily in the global market, with disastrous consequence at a later date. These deals, therefore, create unstable temporary micro-economies, that are likely to collapse and lead to economic and political turmoil. In the case of smaller countries, it is, therefore, harder to gain economic recognition, whilst having a strong and stable state that promotes democratic ideals. This expansion of globalisation and imbalance of success rates within the economy means it “rests on fragile pillars” (Rodrik, 2014). These pillars have the ability to collapse at any given time, as with great expansion eventually has to come great contraction. Economic contraction as a result has the potential to reduce levels of all three co-existing completely – as with a strong economic position, comes a strong nation, and ‘democratic values’. Thus, global markets have become and are becoming extremely volatile, as a select few attempts to assert increasing amounts of power; the EU a prime example. Global markets are now at the forefront of a countries existence. In this way, markets automatically coexist with nation states and democracy. But, the smaller the role a country plays in the global economy, the more inclined they are to be weakened as a nation state which coincidently effects a countries levels of democracy.
Nation states do not change, their status on the global stage might, but the principal does not – this allows the concepts to coexist. Although it is likely that a stronger position in the global market will lead to a strengthened nation state – making it more likely for leading global powers to secure national sovereignty and their democratic values. Brexit will further the position of the British nation state by enhancing national identity internally and expressing sovereignty on an external and global level – reasserting the line between communalism and national identity that became blurred within the EU (Xianbai, 2014). It is clear that on internal levels national identity is on the rise. The ageing populations tend to favour old level sovereignty, in which the state retains its previous status and powers. Yet, the younger generation seeks communalism as a trade-off to a strong nation. This generation gap is clearly expressed when viewing the Brexit vote exit polls; 75% of 18-24 year olds wanted to remain within the EU, whilst 61% of 65+ year olds wanted to leave (Moore, 2016). This contrast expresses that in the future national sovereignty will be less of a pressing issue for the younger generation in this sense, Brexit may only temporarily enhance the nation state, but in the future, is likely to be expensed at the hands of another faction. Furthermore, national identity internally may be on the rise. But, externally nation states and sovereign nations are no longer needed in order to secure this. The evolution of the term nation state means that today, a strong nation state can be part of a global grouping supported by trade blocs and international organisations. Germany for example, has the globes 4th biggest economy, it remains the hub of EU policy and delegation, a leading member in the United Nations and a country with a strong national identity (Prableen, 2017). All of these reasons secure the strength of a nation state, whilst permitting ideals of national sovereignty in a new interpretation. Brexit will therefore enhance the cohesion of internal national identity and external national sovereignty. This will consequently allow all three definitions to coexist at a much higher, and more literal level. Nation states/state sovereignty do undoubtedly coexist with democracy and global markets for many global players. The definition of state sovereignty however is now weakened as it has become a necessity to work with others to permit a functioning and economy and for protection.
The concept of democracy fuses with national sovereignty and hyper-globalisation on a contextual level. Many countries refer to themselves as democracies, but of course the individual values they have may not abide by the literal definition but, instead, the extension of democracy that has grown as a result of globalization. In the modern climate democracy has become the goal for many nation states. Countries that permit democratic values tend to do better within the global economy – for example democratic countries achieve 20% higher GDP per capita than countries that are undemocratic (Acemoglu, 2014). These countries tend to go on to become the globes leading powers – the United States, Japan and Germany, are all members of G7 and all within the top five largest global economies. Thus, in this sense it is clear there is a cohesion, of global markets, democracy and nation states. But, many countries that consider themselves as ‘democracies’ in the loose term, are not, yet they might possess some democratic traits (Freedomhouse, 2018). For example, Russia deems itself a democracy. The country has a democratic constitution and has a Parliament elected via proportional representation but has been branded by Freedom House as “not free” since 2005 and internally faces more similarities to an autocracy than a democracy. It is this loosening of the term democracy that has allowed the terms to coexist on an international level, as long as some form of democratic values are expressed within a country, they become appealing on the global stage. Brexit is likely to strengthen this loose term of democracy both internally and externally. Internally, successfully leaving the EU will enhance democracy by following the mandate of the 52% (17.5 million people) that voted to leave – members of Parliament have had to follow the mandate rather than their own positions to rationalise the democratic process (BBC News, 2016). Externally, a hard Brexit is set to enhance democracy by boosting our state sovereignty and giving more power back to the UK and its electorate, by withdrawing from the ‘democratic deficit’ implemented by the EU (Younge, 2018). Idealistically, democracy will be enhanced both internally and externally, but, it is more likely to be enhanced on an internal level. Due to the unlikelihood that the EU will return all elements of control to Britain, instead some form of control will be needed over the economy, and social jurisdiction, in this sense an illusion of democratic values apply. Therefore, the idea of democracy does coexist with the others. But, in the literal sense it does not. Democracy as a concept has become an idea that permits some form of power to the people, whilst retaining most power within a small group or a cartel of vested interests. The undesirability of autocracies and dictatorships in the West has led to this concept evolving to fit a large proportion of the globes political landscapes.
In conclusion, it is clear there is a cohesion of all three factors on a moderate level. For many countries, seemingly the larger players in the global markets and members of G7, all three undoubtedly coexist to some extent. The smaller the player in the global markets the more susceptible to variation. Brexit seeks to heighten the moderate level of cohesion and form a strong link between democracy, nation states and global markets. Of course, this cohesion is only a moderate level, so there is room for improvement. Rodrick’s capitalism 3.0 would express the perfect solution to form a ‘healthy’ and ‘sustainable’ economy. However, this is unlikely to occur (Rodrick, 2014). Moreover, the future of this cohesion is likely to change. The trilemma is more likely to become apparent in the years to come, with the economy’s global expansion it is likely we will see a retraction and global shrinkage, the emphasis on national identity today is likely to dissolve as the next generation become the majority electorate. Therefore, Rodrick’s argument is not disproven but reworked. There is a sense of variation in the levels in which the three concepts co-exist, and there is room for improvement to strengthen global sustainability, by finding ways in which all three can be more equally managed.