Identity politics is always utopian and nostalgic. Moreover, when push comes to shove, people put up their money to see that flashy Hollywood movie. However much many complain about the degradation of culture, they eat, en masse, at McDonalds. And if it’s a choice between being poor with cultural “identity” and being middle-class in a bland suburban way, eating, reading, driving the same things as Japanese, Americans, French, etc. … well, you guess which one they’re going to choose. Yes, there will be violent protests and terrorism. Much of value in the world’s culture will be lost, not because of conquest or police states, but because people themselves will willingly abandon it. How arrogant it is to try to force them to do otherwise. Yes, conserve as much of the old culture as you can, but don’t coerce people into continuing it. Don’t force people to live in a museum.
Now, there are problems with globalization as it works now, big ones. I don’t know what you mean about it being “out of control.” My problem is that it is too controlled. Western countries, for instance, for all the rhetoric, will not let go of farm subsidies. By cowering to agricultural interests, they impoverish the whole world, because nothing would help the lot of the third world like a free agriculture market. Would do more good than any conceivable foreign aid program. And it would bring prices and taxes down for everyone in the first world. If they would just stop trying to control it, it would be much better.
I was pleased to see Chile insisted on maintaining capital controls in its new agreement with the US. Capital flight and bubbles have done much harm to the third world, and minimum time committments for investment are exactly the kind of regulation that, in this case, make capitalism work better for everybody–even the investors who get a more stable economy and a safer investment as a result.
To answer your revised question, I’d say that governments have to legislate in such a way as to satisfy its citizens. And citizens as a group will always choose money over identity in the long run. If the pain is too much, then the citizens will demand protection from the market, and the government should oblige with funding for culture or unemployment insurance or what have you. Then if the welfare state gets too top-heavy, the economic stagnation will breed a backlash and wittle it down. If things are set up right (e.g. functioning democracy), it is a dynamic, self correcting system, and there is no one right answer except to say let the people and the governments decide.