Dani Rodrik shatters the neoliberal dream by noting a political trilemma:
We cannot have globalization, democracy, and national sovereignty simultaneously. We must choose two among the three.
If European leaders want to maintain democracy, they must make a choice between political union and economic disintegration. They must either explicitly renounce economic sovereignty or actively put it to use for the benefit of their citizens. The first would entail coming clean with their own electorates and building democratic space above the level of the nation-state. The second would mean giving up on monetary union in order to be able to deploy national monetary and fiscal policies in the service of longer-term recovery.
The longer this choice is postponed, the greater the economic and political cost that ultimately will have to be paid.
I think there actually may be a quadrilemma: we cannot have capitalist globalization, political democracy, national sovereignty, and economic democracy simultaneously.
What we’re witnessing, in Europe and elsewhere, is the absence of economic democracy—the making of economic decisions, at both the micro and macro levels, through democratic institutions that involve the vast majority of the citizenry. If we move in that direction, we will be able to create very different kinds of globalization, political decisionmaking, and national sovereignty. That would be a real blow to the neoliberal nightmare we’re currently living through.