The Limits of Globalization

Marc-William Palen

Inimese_tegevusruumAfter last week’s post extolling the seemingly limitless avenues of historical inquiry offered through the study of globalization, it seems only fitting that I should now offer a somewhat contrary one on the limits of globalization.

Sycophantic proponents and adamant critics alike view globalization — the process of speeding up global integration via capital flows, markets, ideas, people, and technology — as an omnipresent and inexorable process. For devout acolytes from Richard Cobden to Thomas Friedman, it appears as a benign process that will one day make the world’s markets so interdependent that war itself will become anachronistic. For its harshest critics, and despite historical evidence and scholarship to the contrary, globalization remains an unstoppable force led by a secretive cabal of powerful multinational corporations hell-bent upon undermining national sovereignty in an endless search for profit.

Conspiratorial suspicions of economic globalization – commonly associated with ‘neoliberalism’ and ‘free trade’ – are by no means a new phenomenon. As I have explored in my own work on late-nineteenth-century America, for example, paranoid members of the Republican party, the party of infant industrial protectionism, commonly viewed any attempt to lower American high-tariff walls as part of a vast transatlantic free-trade conspiracy. Such ‘anti-globalization’ opposition has remained prevalent throughout much of the globe ever since. And of course the world is now much more interconnected than it was in the Victorian Era.

the-world-is-flat coinBut do present-day statistics support the contention that ‘the world is flat’, let alone the paranoid speculations of anti-globalization protesters? Economist Pankaj Ghemawat argues that many of these assumptions, whether favorable or fear-driven, remain illusory. Instead, he suggests in a provocative 2012 TED talk that the world is only semi-globalized, and that ‘apocalyptically minded authors have overstated the case.’

He calls such mischaracterizations ‘globaloney’, and he too looks to earlier antecedents:

I’m a little bit of an amateur historian so I spent some time going back trying to see the first mention of this kind of thing and the best earliest quote that I could find was one from David Livingstone writing in the eighteen fifties about how the railroad the steamship and the telegraph were integrating East Africa perfectly with the rest of the world. Now clearly David Livingstone was a little bit ahead of his time by it does seem useful to ask ourselves just how global are we before we think about where we go from here. [1]

A useful question indeed. The present-day statistics Ghemawat marshals to his aid are illustrative, from immigration, to foreign aid, to social media networks like Facebook, a.k.a. ‘techno-trances’. As summed up on the TED Blog, he admits that this issue of Facebook might

be a touchy subject for a TED audience, but ‘this is nothing more than an analogy with a well-known finding that if you listen to techno music for a long time it does something to your brainwave activity.’ That’s similar with the belief that technology will win out over all. Ghemawat clearly doesn’t agree. So he looked at Facebook. After all, Facebook lowers the barrier to friendship. We should all have friends everywhere now. Right? Wrong. Typically, up to 15% of your friends are from another country than the one in which you live. ‘Not negligible,’ he acknowledges. ‘We don’t live in an entirely local or national world, but that’s far from the 95% level you might expect.’

What does all this mean, according to Ghemawat? It means that such globaloney might very well be misdirecting the debate:

First, recognizing that the glass is only 10-20% full helps us to see that there is plenty of room for additional gains. ‘If we thought we were already there, there’d be no point in pushing harder,’ he says. ‘Being accurate about how limited globalization levels are is critical to noticing that there might be room for something more that would contribute further to global welfare.’

‘Secondly, avoiding overstatement is very helpful, because it reduces and in some cases reverses some of the fears people have about globalization.’ For example, where French people guess that immigrants make up 24% of France’s population, the figure is actually 8%. ‘Maybe realizing that the number is 8% might help cool some of the superheated rhetoric we see around the immigration issue,’ he says.

Not only do his statistical observations have the potential to stimulate a more rational debate, they are just downright fascinating. If you haven’t already, be sure to check out his TED talk in full: