The term “global capitalism” expresses a contradiction. Sovereignty, democracy, and economic regulation are national but, as we are constantly reminded, the economy is global.

Elite opinion replies without hesitation: International trade and foreign investment work, thanks to the magic of the market. It’s national governments that are old-fashioned, obsolete. Globalization is a fact. If it limits space for political control of the economy, so much the better.

Socialists, however, must hesitate: We neither have faith in automatic adjustment by markets, nor are we willing to give up conscious regulation of the economy. We are torn between seemingly incompatible goals—to build genuinely democratic international governance; to preserve space for regulation of economic life; to advance the interests of the particular national constituency we are accountable to; and to address pressing global needs like climate change and inequality.

How do we negotiate these three terms—nation-states, markets, and the people who we hope to represent within or against them? If you’re an economist, one natural starting point is Dani Rodrik’s widely cited formula of “the trilemma.” Rodrik argues that, of national sovereignty, democratic government, and international economic integration, you can have two of them but not all three. When Rodrik introduced the trilemma in the 1990s he, like most liberals, believed it was the nation that should go. Globalization is inevitable; if it prevents national governments from delivering what’s needed for democracy, then political authority must shift to a supranational level. But now he’s having second thoughts. Recently he wrote in the New York Times, “We must reassess the balance between national autonomy and economic globalization . . . we have pushed economic globalization too far . . . [and put] democracy to work for the global economy, instead of the other way around.”

For both liberal advocates of economic integration and for its critics, this question, the political question, is key. The strongest arguments against (and for) continued globalization focus not on the direct effect of trade and finance on living standards and economic outcomes, but on the ways in which those links constrain the choices of governments. As long as democratic politics operates through nation-states, it is likely any left program will require some degree of delinking from the global economy.

https://www.dissentmagazine.org/article/cautious-case-economic-nationalism-global-capitalism