Globalization is being redefined across the world, which will change economic, political and social relationships. How, will, and can the world direct these changes for mutual benefit or increased tension?
The post-World War Two globalization system was structured to produce an American controlled structure, with rules and order planned to establish American hegemony for the future. The structure was brilliant. The United Nations would develop political solutions. The World Bank and the International Monetary Fund would provide economic management. The General Agreement on Trade and Tariffs would manage trade, as it became the World Trade Organization. The costs of communication, travel, and trade were reduced. Containerization and global supply chains allowed advantages of worldwide labor and markets. The world-wide-web was the connector, to bring everyone and everything together. The system was essential, from an American standpoint, because we believed that we controlled the position as the self-declared superpower. Fukuyama declared the End of History, which Washington sincerely believed solidified the American position. Then, the worldwide system began to unravel.
Globalization and the Davos Man became suspect. Questions increased of the role of democracy and whether inequality was essential to capitalism. The global supply chains, which fostered the economic rise of China, became involved in issues of national security, within a context of growing nationalism and populism. The internet, which was meant to unite, suddenly became an instrument of division, with nations seeking to control the flow, production, and distribution of information. We suddenly discovered new realities, which had crept into the international consciousness. We have built smart bombs, smart cities, and smart systems, yet lack smarter decision-makers.
First, we had centralized many of our systems of communication and control into the internet. Our finance, power grids, communications, and structure of control were increasing within our internet systems. As we centralized our control systems, we decentralized access. Osama Bin Laden in a cave with a cellphone could engineer a 9/11 attack. The control of missiles, banking accounts, or power systems was possible from across the world.
Second, technology moved at a much faster rate than governance or morality. We faced new issues, but were able to act only from a reactive position. New issues of bioethics, nuclear warfare, cyberwarfare, secrecy, and privacy were being shaped by technological giants, focused upon profit and not any ideal of the international common good. The fact that information moved quickly across borders did not guarantee increased understanding and empathy.
Power no longer resided in the size of armies, weapon stocks, or military expenditures. Power now became asymmetrical, with investment in research and development, an educated population, the strength of science, investment and tax policies, availability of resources, and national risk culture.
Third, and most importantly, the emerging issues were increasingly unrelated to national borders, while the growth of nationalism and populism strengthened local demands for decisional control. The institutions established such as the UN, IMF, World Bank, or agreements like the Paris Accords on Climate were incapable of meeting the new challenges.
The pandemic made us realize that vaccine diplomacy revealed structural failures, instead of management capability. As Phillip Stephens of the Financial Times notes “Viruses may be global, but politics are local.” The emerging issues such as pandemics, climate change, international trade and communications, terrorism, the Arctic, conflict resolution, nuclear weapons and financial interconnections require multinational analysis and governance. There is an existing disconnect between our need for shared governance and our demand for national control. This disconnect is growing, at the very moment we understand the need for connections.
Fourth, Trump sped a process that was already in motion. His withdrawal from the Paris Climate Agreement and the Trans-Pacific Partnership, abandoning the Iran Nuclear Agreement, playing the fool with North Korea’s Kim Jong-Un, building domestic distrust of science, US intelligence, and the decision to leave the World Health Organization increased world uncertainty. The concept of Washington producing an unraveling of the political, economic, and security architecture and the end of a rules-based system by the founders became a present reality.
Biden seeks to re-establish the older normality, predictability, and order of American leadership, but the world had changed. American unipolarity had changed, the power of others had changed and the nature of power has altered. As a response, we are redefining our structures, which will increase our inabilities to solve shared problems.
Global supply chains will remain for some products. These will be increasingly replaced and supplemented by three major regional supply chains and a series of smaller agreements. One supply chain will be based in China, supported by Russia. A second chain will be centered within the European Union, and the third based in the US and the Americas. Scandinavia, the Baltics, Africa, and South America will both seek regional arrangements and shifting ties to the larger supply chains. The internet and social media will increasingly be separated into national units, with the Chinese Firewall, and Russian legal structures for local control. Nations will increasingly seek to control information flows, taxation, and program content. The United States will watch as their position changes from being the center of content and technology, to challenges from growing Chinese, Korean, Indian and African films and programming. Fareed Zakaria’s Rise of the Rest will become the new definer of worldwide entertainment, even with local political control focused upon information being the new process of citizen management. Global financial systems will shift from dollar-based to the dollar remaining dominant, but under a consistent challenge from the renminbi, as well as new cyber systems like bitcoin and others. Many will seek to replace the dollar, with the dollar’s strength-based in the question of America’s decided role in the world.
Fifth, is the danger produced by protectionism. As national governments seek to guarantee local labor markets, currencies, and production base, there is a possibility of a repeat of the 1920s. During this period, protectionism, such as the 1930 American Smoot-Hawley Act, weakened the base of vision and relationship, producing the Great Depression.
The danger is not simply economic. The American reality of being 4.5 percent of the world population with market growth based upon the other 95.5 percent is understood by multinationals, but not most politicians. The process has become political and social, as religious, national, and racial groups become the targets of anger and economic dislocation.
The battle between “We and They” has become central to issues of globalization. We blame others, because we do not wish to face the truth. In the United States, the Russian and Chinese did not force us to change tax policies to favor the wealthy, nor lessen emphasis on investments in infrastructure, education or research and development. Washington did this to America, just as the government in Moscow and Beijing will determine the future of their nations. We study history, but we repeat the mistakes in new forms because we believe we have the intelligence and experience to avoid errors of the past. We are mistaken. We are witnessing the continuing battle between forces of the past and the future in politics, religion, education, and culture. At one point, globalization represented the future. That belief is under attack worldwide. The resolution of this struggle will determine our future. The question now becomes if we have the wisdom for a new architecture, or whether the possible entropy will continue a state of world fluidity. We understand the need and the questions. We have little agreement on the answers.