Democracy's Dilemma, by Robert Paehlke (MIT Press, 2003), can be purchased at Amazon.com.

One of the most long-standing and important debates about globalization is whether it is fundamentally good or bad. Are the negative impacts of globalization balanced by the benefits, and what actions can national and international policy makers take to ensure that they are? In particular, how are policies in democracies and states undertaking democratization likely to be affected?

Democracy’s Dilemma by Robert C. Paehlke maps out one of the most subtle and disturbing threats that has been associated with globalization: “economism,” defined as the greed and commercialization of everyday life in the most “advanced” countries where advertisement makes everything a commodity. “Compulsive consumption habits” are fed by what is for an important segment of populations increasingly “meaningless work.” The result: ever more time and effort devoted to less rewarding work in a system of "electronic capitalism," where both the means of production and the products are increasingly electronic. The economy perversely overwhelms the political system, social system, culture, and biosphere, all of which results in both personal insecurity and systemic vulnerability of today’s human society.

What creates this perverse environment? Paehlke argues that the main driving forces are a "family-time deficit" where total work hours increase even with rising national productivity and the "democratic deficit" inherent in the structures of global decision making. In the electronic capitalist society, income and employment security decrease even when relatively low unemployment conditions prevail. The fundamental corrective is recognition that happiness is not based on income. Higher income increases expectations, not satisfaction. US consumers, in particular, must confront the reality that the deeper, non-material goals in life are not fulfilled by accumulating material goods. The well-being of an individual is a social matter rather than the product of wealth.

The sweeping breadth of Paehlke’s work and the careful integration of the local, national, and global levels of analysis should earn Democracy’s Dilemma the attention of informed readers worldwide. Who would dispute an argument for generating greater social well-being and less environmental damage from every unit of gross domestic product (GDP)? It certainly can be argued that political leaders should act on the basis that “the permanently poor buy few goods and services and that ecological diversity and sustainability are essential to the quality of life.” Accepting that “the market is a wondrous tool, equally capable of effective self-management within diverse sets of rules,” Paehlke carefully weighs the positives and negatives of electronic capitalism and establishes the need for “new terms and conditions of a more benign, and more effectively monitored, evolution of global economic integration.”

Resolving Democracy’s Dilemma, according to Paehlke, requires major policy initiatives to create minimum global environmental protection standards (with trade-based enforcement penalties), minimum standards for labor, social policy, human rights, a global economic mechanism (such as an energy and materials tax) to reduce the resources consumed in producing a unit of GDP, and a fund to finance technical aid and economic incentives for poorer states to comply with environmental treaties. To his credit, the author recognizes that these are “proposals without politics” and that “the central challenge is to find ways to guide a global economy toward desirable and necessary social and economic behaviors without bureaucracy or government at the global scale.”

Although the intellectual arguments for each of these four proposals may be both sound and logical, Paehlke’s analysis overreaches in drawing the conclusion that “as the scale of market organization is transformed, so too eventually will the dominant site of politics and government change.” We should not over-state the “eclipse” or demise of the nation-state, particularly with regard to the monitoring and regulation of international trade, which is the most clearly political and state-regulated of the major strands of economic globalization. The expansion of the global trade regime based on the World Trade Organization (WTO) has accompanied the size and strength of multinational corporations, but domestic political forces in the largest trading states remain central.

Certainly global economic exchanges require regulation or “governance,” but it is precisely the state-driven approach to international rules and principles represented by the WTO that has survived and prospered in some key areas of trade in spite of failures in other areas such as agriculture. Unlike the World Bank or International Monetary Fund, the WTO has remained modest in size, relatively responsive, accountable to its most engaged members, and successful in guiding states away from many of the most destructive policies and actions. WTO-based dispute settlement should not obstruct important national social or environmental policies, but it also should not be tasked with enforcing them. As WTO operations and decision-making have been opened to view over the past few years, social and environmental issues related to trade have become more salient and influential in trade policies.

How might we achieve Paehlke’s worthy goals of balancing “economism,” advancing human well-being, and regulating economic globalization? It demands an understanding that today’s environmental, social, economic, and political problems are at least as much local and national as they are global. We should search first at the national and local levels for the causes of new “instabilities” in employment and patterns of unemployment, as well as the sources of consumerism and related values.

Political leaders at the national and subnational levels should be held accountable for problems such as increased inequality of income distribution in middle income and wealthy countries. Indeed, why not press officials, candidates, and politicians from the local to national levels to explain and defend public policies in terms of “social well-being, environmental sustainability, and economic prosperity”? Internationally focused non-governmental organizations and public international organizations should be asking the same question and should be held to the same standards.

Paehlke’s analysis of democracy’s dilemma is a fresh, thoughtful, and well-articulated perspective on the impact of globalization. One need only look at the outbreak and spread of the Severe Acute Respiratory Syndrome (SARS) virus to see that globalization is not just about generating and distributing benefits. Yet the SARS epidemic and the epidemic of “economism,” as described by Paehlke, fundamentally illustrate that national governments will continue to be the dominant site of politics and policy change despite the transformation of the scale of the marketplace.