“De-Globalization?”

The classic study of the “swirl of processes and events” that ended previous globalization episodes is the theme of Princeton Professor Harold James’ 2002 book, The End of Globalization: Lessons from the Great Depression.

Globalization” is here. Signified by an increasingly close economic interconnection that has led to profound political and social change worldwide, the process seems irreversible. In this book, however, Harold James provides a sobering historical perspective, exploring the circumstances in which the globally integrated world of an earlier era broke down under the pressure of unexpected events.

James examines one of the great historical nightmares of the twentieth century: the collapse of globalism in the Great Depression. Analyzing this collapse in terms of three main components of global economicscapital flows, trade and international migrationJames argues that it was not simply a consequence of the strains of World War I, but resulted from the interplay of resentments against all these elements of mobility, as well as from the policies and institutions designed to assuage the threats of globalism.

Could it happen again? There are significant parallels today: highly integrated systems are inherently vulnerable to collapse, and world financial markets are vulnerable and unstable.

While James does not foresee another Great Depression, his book provides a cautionary tale in which institutions meant to save the world from the consequences of globalization—think WTO and IMF, in our own time—ended by destroying both prosperity and peace.

Legitimate fears about “globalization reversal” have been well put by Zakaria:

Davos, Switzerland

President Trump’s speech here at the World Economic Forum went over relatively well. That’s partly because Davos is a conclave of business executives, and they like Trump’s pro-business message. But mostly, the president’s reception was a testament to the fact that he and what he represents are no longer unusual or exceptional. Look around the world and you will see: Trump and Trumpism have become normalized.

Davos was once the place where countries clamored to demonstrate their commitment to opening up their economies and societies. After all, these forces were producing global growth and lifting hundreds of millions out of poverty. Every year, a different nation would become the star of the forum, usually with a celebrated finance minister who was seen as the architect of a boom. The United States was the most energetic promoter of these twin ideas of economic openness and political freedom.

Today, Davos feels very different. Despite the fact that, throughout the world, growth remains solid and countries are moving ahead, the tenor of the times has changed. Where globalization was once the main topic, today it is the populist backlash to it. Where once there was a firm conviction about the way of the future, today there is uncertainty and unease.

This is not simply atmospherics and rhetoric. Ruchir Sharma of Morgan Stanley Investment Management points out that since 2008, we have entered a phase of “deglobalization.” Global trade, which rose almost uninterruptedly since the 1970s, has stagnated, while capital flows have fallen. Net migration flows from poor countries to rich ones have also dropped. In 2018, net migration to the United States hit its lowest point in a decade.

The shift in approach can best be seen in the case of India. In 2018, Prime Minister Narendra Modi came to Davos to decry the fact that “many countries are becoming inward focused and globalization is shrinking.” Since then, his government has increased tariffs on hundreds of items and taken steps to shield India’s farmers, shopkeepers, digital companies and many others from the dangers of international competition. The Office of the U.S. Trade Representative recently called out India for having the highest tariffs of any major economy in the world.

Indian officials used to aggressively court foreign investment, which was much needed to spur growth. Last week, with India’s economy slowing badly, Jeff Bezos announced a $1 billion investment in the country. (Bezos owns The Post.) But the minister of commerce and industry scoffed at the move, saying Amazon wasn’t “doing a great favor to India” and besides was probably engaging in anti-competitive, “predatory” practices. Often, protectionist policies help favored local producers. Malaysian Prime Minister Mahathir Mohamad recently criticized some of Modi’s policies toward Muslims. The Indian government effectively cut off imports of Malaysian palm oil. In a familiar pattern, one of the chief beneficiaries was a local billionaire long associated with Modi.

The Economist notes that Europe, once one of the chief motors for openness in economics and politics, is also rediscovering state intervention to prop up domestic industries. And if you think the Internet is exempt from these tendencies, think again. The European Center for International Political Economy tracks the number of protectionist measures put in place to “localize” the digital economy in 64 countries. It has been surging for years, especially since 2008.

It’s important not to exaggerate the backlash to globalization.

As a 2019 report by DHL demonstrates, globalization is still strong and, by some measures, continues to expand. People still want to trade, travel and transact across the world. But in government policy, where economic logic once trumped politics, today it is often the reverse. Economist Nouriel Roubini argues that the cumulative result of all these measures — protecting local industries, subsidizing national champions, restricting immigration — is to sap growth. “It means slower growth, fewer jobs, less efficient economies,” he told me recently. We’ve seen it happen many times in the past, not least in India, which suffered decades of stagnation as a result of protectionist policies, and we will see the impact in years to come.

Nevertheless, today, nationalism and protectionism prevail.

This phase of deglobalization is being steered from the top. The world’s leading nations are, as always, the agenda-setters. The example of China, which has shielded some of its markets and still grown rapidly, has made a deep impression on much of the world. Probably deeper still is the example of the planet’s greatest champion of liberty and openness, the United States, which now has a president who calls for managed trade, more limited immigration and protectionist measures. At Davos, Trump invited every nation to follow his example. More and more are complying.

The world is de-globalizing. Trump set the example.The Washington Post, Fareed Zakaria

Students should sense that while history does not repeat itself, it sometimes rhymes and this is a major danger. It also might imply that coping with climate change will be all the harder because American-led unilateralism everywhere would mean world policy paralysis.

Navigating through Sources

Consciousness and the Novel: Connected Essays by the famous British novelist David Lodge is a classic work published by Harvard in 2004.

In this Lodge book, the author mentions a famous British society-watcher, Charles Masterman. In 1909, Masterman published his best-known study, The Condition of England, which tells us that England at that time experienced a greater inflow of migrants into London than in previous centuries taken together.

[Charles Frederick Gurney Masterman PC MP (24 October 1873 – 17 November 1927) was a British radical Liberal Party politician, intellectual and man of letters. He worked closely with such Liberal leaders as David Lloyd George and Winston Churchill in designing social welfare projects, including the National Insurance Act 1911. During the First World War, he played a central role in the main government propaganda agency.]

We then notice that one recurrent topic in various movie versions of the E. M. Forster novel Howards End (1910, set in those years) is the “horrifying” trend where great mansions and stately estates (Howards End and Wickham Place, say, in the novel) are all being demolished and replaced by ugly “flats.”

There must be, one thinks, a direct link between all the massive migrations into London at the time and all the proliferating flats at the “expense” of beautiful and historical villas. (This “demolish” trend is also part of the story of the classic novel A Handful of Dust by Evelyn Waugh, 1934)

In the predecessor to Downton Abbey called Upstairs, Downstairs, the story ends in 1930 with a sign outside the great “house” at Eaton Place offering flats coming soon, as the demand for housing (think of San Francisco today) is so massive that sellers can make a fortune selling out to developers, move into one of the flats being created, and live off the sale for the rest of their lives and “duck” the higher “Lloyd George taxes.” (In Downton Abbey, the dowager played by Maggie Smith repeatedly lashes out at Prime Minister Lloyd George as a kind of financial traitor.)

We see from this simple example how students should learn to “jump” between books and movies and TV miniseries to get a stronger focus on what’s being depicted on screens and pages and not just “swim along” at the surface level without any “drilling down.”

Education is largely the struggle or habit where students learn to bring pattern and structure out of “chaos,” thus giving narratives some overall shape.

This reminds one of the opening lines of Beryl Markham’s 1942 Africa memoir:

“How is it possible to bring order out of memory? I should like to begin at the beginning, patiently, like a weaver at his loom. I should like to say, ‘This is the place to start; there can be no other.’ ”

from West with the Night by Beryl Markham

This is a similar impetus: to bring order out of memory or others’ memories in books and movies from various times and places.