For anyone who thought, a few years back, that we were going to slide down a big flat-screen TV to every greater pelf and prosperity, recent events have been a real kick in the assets. First there’s the global financial crisis and the evaporation of trillions of dollars — with every Australian watching nervously to see if we’ll get a free pass for the next quarter — and then, every month or so, a new announcement suggesting that the climate indicators are worse than the worst predictions.

Then, just as we’re digesting all that, the incarceration of Stern Hu reminds us that power exists, that we don’t have it and that its exercise is not limited to white people nations we like. Far from being independent of the world thanks to our resources etc etc, we are more dependent on it than most.

The Hu case is a small but still note announcing what should have been obvious for some time — that the utopian notion of a borderless free trade world promulgated after the end of the Cold War is a fiction, its exercise dependent on the continued consent of state powers. While the porousness of borders — because of global travel, the internet and telecoms etc etc — is greater than it was, state power and boundaries are the fall-back position to which the world is prone. The “attacker’s advantage” tends to dictate that it is so — it is usually better to get the first punch in, whether it’s a coup in a banana republic, or a no-nonsense attitude to foreign elements — even if it is not without cost in the wider world.

Surely it’s obvious to everyone by now that the next stage of the game is not ever greater openness, but a return — in the areas of material production, rather than information and services — of protectionism, mercantilism and localism? If there were any doubt about it, the easy populism of the Opposition in relation to the Hu case has confirmed it. Taking advantage of the fact that the government won’t hurl the case of David Hicks into their face — the ALP don’t really want to be associated with Hicks as a person, even though the incident probably lost Howard a couple of seats, including his own — the coalition can play a ludicrous game of gotcha that undermines their whole commitment to the globalisation they spruik.

The result in the long term will be the end of the Coalition — driven in the first stage by a crisis in the National Party. Let’s face it, the National Party no longer exists. The putative leader Warren Truss is never heard from, and a nativist and xenophobic faction led by Barnaby Joyce takes the running. The more that events — from US farming subsidies, rural decline and anglo-celtic chauvinism — force the Nats towards an illiberal position, the more the Liberal Party will find itself torn by the limits of how far it can travel with them.

After all, Malcolm Turnbull has already exposed himself to charges that he would be “bad for business” in the same way as Mark Latham exposed himself to charges that his anti-US position would make him “bad for national security”. All Rudd has to do is wonder aloud how Beijing is going to look on a Turnbull government that stirred up some pretty rank attitudes to Asia and how that would affect our trade etc for many people to look to their own interests rather than that of a businessman who may or may not have been employing sharp practices to get contracts and got pinged.

That’s only the most visible recent example of something happening everywhere. The NSW government puts local supplier preferences into its budget and seems to gain support for it, even though it will raise costs. The US Congress adds the same to its Waxman-Markey climate change bill, to put on top of continuing agricultural subsidies, which make US farming as dependent on the state as is the Chinese steel industry.

In the UK, British shipyards workers strike because their neighbours and friends cannot even be considered for jobs next to them, owing to the employment contracts that have been given to foreign firms from across the EU. From the Uighurs in Xin Jiang resisting Han colonisation, to foreign workers expelled from Dubai at a moment’s notice, the first response to trouble is a contraction back to the parochial.

This sort of stuff has happened before — but one thing that is new is that it is now accompanied by a process which is progressive, at least in intent — the “localist” production movement, the idea that it is good for all sorts of reasons to source as much as possible from close to home. Some would suggest that this is entirely unprogressive — a form of demodernisation — but we can at least agree that wanting to buy carrots that haven’t been flown halfway across the world is of a different moral order to the White Australia Policy.

What is most significant is that the two questions — nationalism/globalism, localism/globalisation — are recombining politics in a way that isn’t easily mapped onto left and right. People who tend to be consciously localist — greenish, socially liberal etc — tend not to be very nationalist, while those banging the drum to “stand up to the Chinese for an Aussie” are the ones who have been trying to convince everyone that we should be indifferent as to whether the stuff we buy is Australian or not, even if the jobs of our fellow countrypeople are at stake.

That paradox points to the most bizarre thing about the post-Cold-war globalisation period that ended in September last year — that its most ardent advocates imagined that people could be persuaded to abandon a commitment to those closest to them (or connected to them by the abstract notion of nationhood) by the application of a theory of what would create the greatest prosperity in “the long run”. Of course we will abandon notions of the virtuous global market in a trice when the more immediate needs of those closest to us are threatened. Does anyone really doubt that a further major economic global reversal would prompt a vast expansion of localism and protection in all areas of life?

As of course it should. The neoliberal doctrine of atomised individualism within a vast global expanse has been as fundamentally in opposition to deeper human nature as were earlier similar projects such as Stalinism.

The only question is whether localism and protection will return in a virtuous manner, or allied to pernicious xenophobia. For a while the neoliberal Right sought to stigmatise any whiff of localism as “Hansonist” — so to express some concern about whether whole sectors of rural Australia would fall into irreversible decline, or the effect unemployment was having on urban workers, was to be be identical to a white chauvinist. It’s a deliberately misinformational strategy, and also one likely to badly backfire — if the hard right is the only group to treat such concerns as legitimite, then the hard right will claim their allegiance.

The trick now is to articulate a politics that is both universal in its outlook — wanting global interconnection, trade, travel — while also recognising a prioritising of the local and communal as legitimate demands, which have no necessary connection with racism or chauvinism.

As a rough rule of thumb one would have said that nations (and smaller communities) have a right to protect and guarantee the viability of industries essential to the reproduction of life — food, habitation, energy, etc etc — as a necessary constituent of independence. Since, as we can see — even on our flat-screen TVs — one result of globalisation has been a level of dependency that undermines any possibility of real freedom.