Tired of globalisation

 
Globalisation sounds like a good idea. It would be if co-operation was the motive behind it; an altruistic type of co-operative system. But it's far from that. Globalisation has some elements of co-operation, of course. Most of these are legal arrangements, and economic arrangements (such as common curriencies and trade systems). In reality, it's really just an aberration. And although the world is racing towards globalisation, it is racing towards a concept that has no future.
It's like a couple pouring their money and investments into a holiday home in a foreign country. For a while it's good. The holiday home earns rental income for a while, and provides a place for further investment. So they decorate, and furnish and travel to their faraway home. It creates local demand. But further down the road, the costs to use the house, the costs to get to the home, the costs of one's own home, make it an unsustainable arrangement. After that it becomes difficult to dispose of the investment, because everyone else is trying to do the same thing, and local resources are minimal.
What are these future costs? They're the costs associated with Peak Oil. Peak Oil will undo globalisation, and reverse the efficiencies we see in the world into proportionate inefficiency. The globalised world is less a system of co-operation, than a competitive, profit-seeking system addicted to oil, and very dependent on long range sustaining systems (Wal-Mart's supply chains from China, Zimbabwe consuming grain grown in Kansas).
When these systems disintegrate, local vacuums are exposed, and these leave large numbers of the global population vulnerable to food and other shortages. This is the worst risk associated with globalisation - dependence on the importation of food. But there are others: globalisation provides thoroughfares for terrorism and disease, and the transmission of instability to each and every thing connected to this system.

It's nevertheless easy to be a proponent of globalisation. Globalisation sounds good. No borders, no boundaries. Free trade. But the reality is quite different. It's only free for big corporations and multinationals. The trick is to try to engender co-operation instead of competition. But in a free market, given the profit motive, this is not easily achieved. Ordinary citizens experience the so-called freedoms of globalisation through common currency, for example in Europe. Travel is also easier in some cases.
The ideals of this concept aren't bad, but pursuing globalisation ignores the severe problems it causes.
- worsening divide between rich and poor (not only individuals, but countries, especially Third World countries)
- outsourcing of jobs (example: auditing jobs and basic call centre services outsourced to India, and Bangladesh)
- outsourcing of local production (example: McDonald's and Starbucks replacing local restaurants and coffee shops on a global scale)
- increased vulnerability to outside instabilities (including increased vulnerability and connectivity to war. Globalisation leads to the building and then destruction of Empires. The Roman Empire, British Empire and German's attempts at an Empire are all examples of failed attempts at globalisation).
- unsustainable

In any event, many activites in the world are based around the concept. Much of today's growth and economic activity is fuelled around the globalisation trend.
In Asia, the demand to learn English is incredible, simply because the demand for business and trade on a global scale (especially with English speaking countries) is incredible. Unfortunately, due to future fuel costs, this trend (that's all globalisation is, a trend) is not likely to continue for much longer.

We'll see more and more problems associated with globalisation, and we'll read more articles like this one below, saying why we should continue on our road to nowhere.
What we ought to do is encourage and support local comptencies, including the local production of food.

Nov 3rd 2005
But trade liberalisation and other forms of openness are needed more than ever

FREDERIC BASTIAT, who was that rarest of creatures, a French free-market economist, wrote to this newspaper in 1846 to express a noble and romantic hope: “May all the nations soon throw down the barriers which separate them.” Those words were echoed 125 years later by the call of John Lennon, who was not an economist but a rather successful global capitalist, to “imagine there's no countries”. As he said in his 1971 song, it isn't hard to do. But despite the spectacular rise in living standards that has occurred as barriers between nations have fallen, and despite the resulting escape from poverty by hundreds of millions of people in those places that have joined the world economy, it is still hard to convince publics and politicians of the merits of openness. Now, once again, a queue is forming to denounce openness—ie, globalisation. It is putting at risk the next big advance in trade liberalisation and the next big reduction in poverty in the developing countries.

In Washington, DC, home of a fabled “consensus” about poor countries' economic policies, a bill before Congress devised by one of New York's senators, Charles Schumer, threatens a 27.5% tariff on imports from China if that country does not revalue its currency by an equivalent amount. In Mr Schumer's view, presumably, far too many Chinese peasants are escaping poverty. On November 4th George Bush will escape the febrile atmosphere along Pennsylvania Avenue by visiting Argentina to attend the 34-country Summit of the Americas. There he will be greeted by a rally against “imperialism”, by which is meant him personally, the Iraq war and the Free Trade Area of the Americas which he espouses. Among the hoped-for 50,000 demonstrators will be Diego Maradona, who as a footballer became rich through the game's global market and as a cocaine-addict was dependent on barrier-busting international trade; and naturally his fellow-summiteer, Hugo Chávez, who is using trade in high-priced oil to finance his “21st-century socialism” in Venezuela.

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All, perhaps, the normal fun of a Latin American visit. Last week's Latinobarómetro opinion poll revealed that whatever the protesters may say, a clear majority in all the region's countries favour a market economy rather than a closed, state-directed one—even in Venezuela (see article). This is, however, a difficult moment for the market economy and for relations between rich countries and poorer ones, for the Doha round of trade-liberalisation talks under the World Trade Organisation are in trouble. When it began in 2001, the round was billed as a big effort to boost growth in poor countries, and the lowering of barriers to food trade was placed at its centre. In the past few weeks, however, a fairly bold American proposal for reducing its farm protection has been greeted by a much weaker response from the European Union and none at all from Japan. And ministers from Bastiat's own country, France, have vied with one another to denounce all talk of further reform to the EU's common agricultural policy. Europe must, they say, remain an “agricultural power” even at the expense of the taxpayer and the poor, and, according to President Jacques Chirac, must fight back “liberalism”. Whatever happened to Liberté, Egalité, Fraternité?

The world will find out, to some extent, next month when ministers from the 148 countries in the WTO meet in Hong Kong. The last time they gathered for such a crucial meeting was in September 2003 in Cancún, and the result was a shambles. There was a bitter row between rich countries and poor ones, and the meeting broke up in acrimony. At that stage, however, there was still plenty of time to repair the damage. For in effect the deadline for the Doha round comes in June 2007, when the trade-negotiating authority granted by Congress to President Bush expires. But, although that leaves more than a year and a half after Hong Kong, the complexity of a negotiation involving 148 countries and scores of highly technical issues means that the deal really needs to be done during 2006, with the political framework for it set early on—which essentially means in Hong Kong.
The case for selfish generosity

Trade-liberalisation rounds are arcane affairs about which free-traders are often thought to cry wolf. The previous talks, known as the Uruguay round, went through lots of brinkmanship and delays before they were completed. The result was still disappointing in many ways, especially to developing countries, and yet since the round's completion in 1993 the world economy has grown lustily and the biggest developing countries, China, India and Brazil, have all burst on to the global trading scene. Would the world really be hurt if the EU merely refuses to expose its farmers to more competition?

The likeliest outcome both from the Hong Kong meeting and the eventual Doha agreement is a compromise—as always. The European position is feeble but not risible, for it has offered an overall average cut in its farm tariffs of 39%, up from 25% only a month ago, though with rather a lot of loopholes that could severely limit the benefits. France, and other European farm protectionists, may prove more flexible than they currently imply: this is hardly the first time they have promised to man the barricades shortly before striking a deal. Yet though some sort of fudge in Hong Kong must be likely, with the Americans lowering their ambition and the Europeans raising theirs a little, such an outcome would still represent both a missed opportunity and a risk.

The missed opportunity is that Doha has offered the first proper chance to involve developing countries in trade negotiations—they now make up two-thirds of the WTO members—but also thereby to use a full exchange of agricultural, industrial and service liberalisations to make a big advance in free trade that could benefit a wide range of countries. Some of that progress may still be made, even in a fudged deal: Brazil, for example, stands to benefit hugely from freer trade in agriculture (see article), so it should be willing to promote other concessions in return. India is reluctant to cut its own farm tariffs but has a big interest in liberalising trade in services, wanting more freedom in everything from finance to health care to entertainment. But if the rich world could gird itself to be more ambitious on agriculture the gains would be even greater: help for the poorest countries, making the rich look generous; better access to the biggest and richest developing countries for western companies; and a rise in global income in a decade's time of $300 billion a year (says the World Bank), which would thus help everyone.

The risk is that failure to agree on a new wave of openness during a period (the past two years) in which the world economy has been growing at its fastest for three decades, with more countries sharing in that growth than ever before, will set a sour political note for what may well be tougher times ahead. A turn away from trade liberalisation just ahead of an American recession, say, or a Chinese economic slowdown, could open up a chance not just for a slowdown in progress but for a rollback. Currently, for example, the Schumer bill to put a penal tariff on Chinese goods looks unlikely to pass. If American unemployment were rising and world trade talks had turned acrimonious, that might change. So might the political wind in many developing countries.

If so, that would be a tragedy for the whole world. Although the case for reducing poverty by sending more aid to the poorest countries has some merit, the experience of China, South Korea, Chile and India shows that the much better and more powerful way to deal with poverty is to use the solution that worked in the past in America, western Europe and Japan: open, trading economies, exploiting the full infrastructure of capitalism (including financial services—see our survey on microfinance) amid a rule of law provided by government. In other words, globalisation. To paraphrase Samuel Johnson, anyone who is tired of that is tired of life.