DRAFT: Not for quotation RETHINKING GLOBALIZATION AFTER THE COLLAPSE OF THE FINANCIAL BUBBLE An essay on the challenges of the Third Millennium

The present understanding of " globalization " is inextricably tied to the " free market " ideology for both proponents and opponents. This paper will argue that globalization has many potential forms of which the neo-liberal recipe, applied up to now, is only one. The need to recognize the whole planet as the economic space is inherent to the present technological revolution and its techno-economic paradigm. In that sense, globalization, in one form or another, would be basically inevitable. However, just as in the previous mass production paradigm national State intervention in the economy took several different forms, so globalization can be socially and politically shaped to favor truly global development for the full deployment of the current paradigm. Simply put: globalization need not be neo-liberal. The pro-development version of globalization has not yet been designed or defended as such. 1 Yet, it will be argued that, without it, not only would it be very difficult to relaunch development in the South but also to overcome the present recessionary trends in the North. These propositions stem from a historically-based model of the way in which successive technological revolutions are assimilated in the economic and social system, generating great surges of development that follow a recurring sequence. The present period would be the mid-point of the surge, after the collapse of the major financial bubble, when the structural tensions that underlie the ensuing recession require a fundamental institutional recomposition. Among other tasks, income needs to be rechannelled towards new layers of consumers in order to help overcome the premature market saturation, which results from the polarization of income in the top band of the spectrum, in each country and in the world. This paper will argue that the present is, for that reason, the most appropriate time to put forth bold proposals for a profound redesign of global regulation and institutions. The argument will be developed beginning with a general summary of the model, in section B. Then, Section C will focus on the recurrence of great financial bubbles, a decade or two after the irruption of each technological revolution, and will examine their role in facilitating the paradigm shifts and in concentrating enough investment in the installation of the new infrastructures. Section D will analyze the post-bubble recessions and the structural distortions inherited from the previous casino economy, which must be overcome by appropriate regulation and institutional changes. The final …