Posts Tagged ‘globalization’
“The international situation is desperate, as usual”*…
… so desperate, an increasing number of pundits argue, that globalization– the “flat world” proclaimed by Tom Friedman– that was to totem of the turn of the century, is no longer possible. But as the estimable Martin Wolf argues, we shouldn’t be too hasty– nor too sweeping and blunt– in our judgements. Trade in goods may be slowing, but the potential for technology-enabled trade in services remains huge…
What is the future of globalisation? This is among the biggest questions of our time. In June, I argued that, contrary to increasingly widespread opinion, “Globalisation is not dead. It may not even be dying. But it is changing.” Among the most important ways in which it is changing is via the growth of services provided at a distance.
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A crucial point is that the expansion of trade in such services has depended little on trade agreements. The regulation of service activities focuses on final services, not intermediate ones. There exist, for example, strict rules on selling accounting services in the US. Yet there are few rules on the qualifications of the workers that do the paperwork behind the provision of such services.
Thus, a “US accountant can employ pretty much anybody to tally up a client’s travel expenses and collate them with expense receipts”. Examples of occupations that provide intermediate as opposed to final services include book-keepers, forensic accountants, screeners of CVs, administrative assistants, online help staff, graphic designers, copy-editors, personal assistants, X-ray readers, IT security consultants, IT help staff, software engineers, lawyers who check contracts, financial analysts who write reports. The list goes on. As Baldwin argues in The Globotics Upheaval, the potential for this sort of technology-enabled trade is huge. It will also be highly disruptive: the white-collar workers who provide these services in high-income countries are an important part of the middle class. But it will be hard to protect them.
In all, the evidence suggests that natural economic forces have largely been responsible for past changes in the pattern of world trade. Growing concern over the security of supply chains will no doubt add to these changes, though whether the result will be “reshoring” or “friendshoring” is doubtful. More likely is a complex pattern of diversification. Meanwhile, technology is opening up new areas of growth in services…
“Globalisation is not dying, it’s changing,” from @martinwolf_ in @FT.
* Tom Robbins, Even Cowgirls Get The Blues
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As we contemplate commerce, we might send muckraking birthday greetings to Upton Sinclair; he was born on this date in 1878. A writer, activist, and politician, he is probably best remembered for his classic novel, The Jungle, which exposed labor and sanitary conditions in the U.S. meatpacking industry, causing a public uproar that contributed in part to the passage a few months later of the 1906 Pure Food and Drug Act and the Meat Inspection Act.
Many of his novels can be read as historical works. Writing during the Progressive Era, Sinclair describes the world of the industrialized United States from both the working man’s and the industrialist’s points of view. Novels such as King Coal (1917, covering John D. Rockefeller and the 1914 Ludlow Massacre in the coal fields of Colorado), Oil! (1927, the Teapot Dome Scandal), and The Flivver King (1937, Henry Ford– his “wage reform” and his company’s Sociological Department, to his decline into antisemitism) describe the working conditions of the coal, oil, and auto industries at the time.
Sinclair ran unsuccessfully for Congress as a nominee from the Socialist Party. Then he ran, as a Democrat, for Governor of California during the Great Depression, under the banner of the End Poverty in California campaign, but was defeated in the 1934 election.
He was awarded he Pulitzer Prize for Fiction in 1943 for Dragon’s Teeth, which portrayed the Nazi takeover of Germany during the 1930s.
It is difficult to get a man to understand something, when his salary depends upon his not understanding it.
Upton Sinclair, ruminating on his gubernatorial loss
“… life, by definition, is never still”*…
Jason Farago explores some of the extraordinary things that a still life can tell us…
When you visit a museum’s collection of European painting, do you skip by the still lifes and head for the showier stuff?
It’s understandable. Their scale is usually smaller than that of other paintings. Their prices are lower. They can feel straightforward: Pictures of fruit and fowl, cups and bottles, what do you want from me?
Still life had a bum reputation for centuries. Early critics rated them as something less than high art…
[There follows a wonderful– and wonderfully-illustrated– close reading of the painting above, and an exploration of its reflections of its place in a globalizing moment in Dutch and world history…]
… this is the power of still life. It’s here, more than any other mode of art, that this social and economic life of things becomes visible.
Inside and between these carefully observed objects is a narrative of global scale. It’s a tale Heda tells even despite himself…
Art may show you the connections for just a moment. They will always be hazy. But some motions can only be sensed when you’re standing still.
A marvelous visual essay: “A Messy Table, a Map of the World” (unlocked), from @jsf— part of the “Close Read” series in @nytimes.
* Kurt Vonnegut
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As we uncover connections, we might send observant birthday greetings to an artist who painted still lifes (and other forms) to a different end, Georges Braque; he was born on this date in 1882. With his friend, collaborator, and rival, Pablo Picasso, he was central to the development of Cubism.
“It has been said that arguing against globalization is like arguing against the laws of gravity”*…
The preponderance of evidence suggests that financial globalization – especially unrestricted hot money – aggravates macroeconomic instability, creates the conditions for financial crises, and dampens long-run growth by making the tradable sector less competitive. Few economists would list financial globalization as an essential prerequisite for sustained long-term development or macroeconomic stability. And arguments made in its favor presume that every country has already met highly demanding regulatory requirements. Most have not and probably cannot, except over the long run.
While the International Monetary Fund has begun to make some allowance for restrictions on capital flows, albeit only as a temporary last resort for weathering cyclical surges, the dogma of financial globalization remains intact. One reason, perhaps, is that development economics has not shed its resource/savings fundamentalism, which attributed underdevelopment to a lack of domestic savings. The implication was that developing and emerging economies should attract resources in the form of foreign aid or, after skepticism about aid became widespread, foreign private capital.
Alternatively, the orthodoxy may owe its resilience to the power of entrenched financial interests that have stood in the way of new controls on cross-border capital flows. Wealthy elites in several countries – especially in Latin America and South Africa – embraced financial globalization early on because they saw it as offering a useful escape route for their wealth. In these cases, policy inertia and possible reputational costs made it difficult suddenly to start advocating a reversal. Global financial elites had long relied on a narrative that equates capital controls with expropriation, and responsible policymakers did not want to be seen as violating property rights…
Although much of the intellectual consensus behind neoliberalism has collapsed, the idea that emerging markets should throw their borders open to foreign financial flows is still taken for granted in policymaking circles. Until that changes, Arvind Subramanian and Dani Rodrik argue, the developing world will suffer from unnecessary volatility, periodic crises, and lost dynamism: “The Puzzling Lure of Financial Globalization.”
* Kofi Annan
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As we cache our cash, we might recall that this was a bad day for inclusiveness in Massachusetts in 1635: the General Court of the then-Colony banished Roger Williams for speaking out for the separation of church and state and against the right of civil authorities to punish religious dissension and to confiscate Indian land. Williams moved out to edge of the Narragansett Bay, where with the assistance of the Narragansett tribe, he established a settlement at the junction of two rivers near Narragansett Bay, located in (what is now) Rhode Island. He declared the settlement open to all those seeking freedom of conscience and the removal of the church from civil matters– and many dissatisfied Puritans came. Taking the success of the venture as a sign from God, Williams named the community “Providence.”
Williams stayed close to the Narragansett Indians and continued to protect them from the land greed of European settlers. His respect for the Indians, his fair treatment of them, and his knowledge of their language enabled him to carry on peace negotiations between natives and Europeans, until the eventual outbreak of King Philip’s War in the 1670s. And although Williams preached to the Narragansett, he practiced his principle of religious freedom by refraining from attempts to convert them.
Roger Williams statue, Roger Williams Park, Providence, R.I.
“The international situation is desperate, as usual”*…
Two experts agree that the days of increasingly easy and speedy global flows of goods, money, people, and ideas are over; the future that Tom Friedman evoked in The World is Flat is, at best, delayed. But they have very different ideas of what this may mean…
First, Jean Pisani-Ferry: after a sharp precis of the forces that that have led us to what he calls a “spiky” world, he suggests…
US President Donald Trump’s ruthless use of the centrality of his country’s financial system and the dollar to force economic partners to abide by his unilateral sanctions on Iran has forced the world to recognize the political price of asymmetric economic interdependence. In response, China (and perhaps Europe) will fight to establish their own networks and secure control of their nodes. Again, multilateralism could be the victim of this battle.
A new world is emerging, in which it will be much harder to separate economics from geopolitics. It’s not the world according to Myrdal, Frank, and Perroux, and it’s not Friedman’s flat world, either. It’s the world according to Game of Thrones.
Read his piece in full at “Farewell, Flat World.”
Then consider the argument of Michael O’Sullivan, who agrees with Pisani-Ferry as to the diagnosis, but has a very different prognosis:
Globalization, at least in the form that people have come to enjoy it, is defunct. From here, the passage away from globalization can take two new forms. One dangerous scenario is that we witness the outright end of globalization in much the same manner as the first period of globalization collapsed in 1913. This scenario is a favorite of commentators because it allows them to write about bloody end-of-the-world calamities. This is, thankfully, a low-probability outcome, and with apologies to the many armchair admirals in the commentariat who, for instance, talk willfully of a conflict in the South China Sea, I suggest that a full-scale sea battle between China and the United States is unlikely.
Instead, the evolution of a new world order—a fully multipolar world composed of three (perhaps four, depending on how India develops) large regions that are distinct in the workings of their economies, laws, cultures, and security networks—is manifestly underway. My sense is that until 2018, multipolarity was a more theoretical concept—more something to write about than to witness. This is changing quickly: trade tensions, advances in technologies (such as quantum computing), and the regulation of technology are just some of the fissures around which the world is splitting into distinct regions. Multipolarity is gaining traction and will have two broad axes. First, the poles in the multipolar world have to be large in terms of economic, financial, and geopolitical power. Second, the essence of multipolarity is not simply that the poles are large and powerful but also that they develop distinct, culturally consistent ways of doing things. Multipolarity, where regions do things distinctly and differently, is also very different from multilateralism, where they do them together…
Read an interview with O’Sullivan and more of the excerpt from his new book, The Levelling: What’s Next After Globalization quoted above at “Globalisation is dead and we need to invent a new world order.”
For more on the history of nativism and protectionism, especially in the U.S., concluding, as Pisani-Ferry and O’Sullivan do, that they’re with for awhile, see David Kotok‘s “Borders.”
* Even Cowgirls Get the Blues
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As we renew our passports, we might recall that it was on this date in 1405 that Ming Dynasty admiral Zheng He set sail on the first of his seven exploratory “treasure voyages” to Southeast Asia, South Asia, Western Asia, and East Africa, exacting tribute and encouraging trade.
After his death, at the end of his seventh expedition, Ming naval efforts declined dramatically (the government’s attention having been diverted by a threat from the Mongols in their northwest). 1950s historians like Joseph Needham popularized the idea that after Zheng He’s voyages, China turned away from the seas (as reflected in to the Haijin edict) and was isolated from European technological advancements. But modern historians point out that Chinese maritime commerce didn’t totally stop after Zheng He, that Chinese ships continued to participate in Southeast Asian commerce until the 19th century, and that active Chinese trading with India and East Africa continued long after the time of Zheng.
In any case, it’s clear that Zheng He belongs atop any list of maritime adventurers– the vanguard of globalization.
Statue from a modern monument to Zheng He
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