Class Struggle and International Economic Institutions: The Origins of the GATT and “Embedded Liberalism”

Abstract

If one wants to get a grasp on the international institutional arrangement of what J. G. Ruggie called “embedded liberalism,” which included the General Agreement on Tariffs and Trade (GATT), one must first carefully examine the conditions that made the regime of accumulation called Fordism possible. More precisely, it is essential to grasp how the particular evolution of class struggle in the US strongly influenced the organization of capitalism in this country, and subsequently the international institutions at the core of the embedded liberalism. Simply put, the thesis defended in this article is that the evolution of class struggle in the US in the 1930s and the following decades has been the main influence in the shaping of Fordism and an undervalued factor in the creation of the GATT. The GATT, in other words, is an agreement that strongly corresponds to the necessity of the management of the class struggle associated with Fordism.

Re‐Embedding Trade in the Shadow of Populism

“…The contributors have been asked to go beyond purely descriptive accounts to also propose policy solutions or approaches to resolving the tensions they describe. Jones (2023) and Bachand (2023) address the embedded liberalism compromise from contrasting points of view. The former argues for a strong version of Ruggie's original framework and draws on the sociological concept of constructivism to understand the foundation of global trade institutions.…”

“…He proposes several "fixes," including improving trade adjustment policies in domestic trade policy, revisiting the consensus rule at the WTO, providing for more domestic policy space, and finally stronger leadership on trade. In contrast, Bachand (2023) identifies the changes related to the transformations of the world economy and questions international institutions and their capacity to provide a new deal that would be adapted to globalization. This is key to understanding the linkage between embedded liberalism and the underlying labor-capital relationship that was at the basis of tripartism.…”

“…A Polanyian double movement is certainly at play, but the national political and legal space is perhaps no longer matching the economic space with the rise of transnational capitalism. Bachand (2023) suggests that there needs to be a focus on greater democratic participation in the enterprise and the economy generally. Santos (2023) turns our attention to ISDS institutions.…”

“…The threat and challenges to public health are viewed with a domestic lens by Dalingwater (2023). Like Bachand (2023), she emphasizes the away from embedded trade and globalization to a neoliberal form of transnational capitalism. Defending the NHS became the organizing theme of anti-globalization populists on both left and right, helping lead to Brexit, and general skepticism of global economic and political integration.…”