“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.

How to See Fundamental Tension in the World Easily

People-Class Part II

A few years ago, in 2006, there was a first rate movie called The Last King of Scotland with the great black American actor, Forest Whitaker, playing barbaric Idi Amin Dada Oumee who destroyed the life of the Asian community in Uganda in the 1970s.

This great actor later appeared on the TV talk show, The Charlie Rose Show. Charlie Rose and Whitaker were discussing the movie and Rose denounces Idi Amin as the mad barbarian he was.

But Whitaker objects and says, “You gotta keep in mind, Charlie, that more than 90% of Ugandan commerce was in Asian hands and the situation was not viable.”

We have here a simple way of seeing our world more clearly since commerce is a cosmopolitan activity of business people whereas “ethnonational” considerations (expressed by Whitaker) are tribal and backward or inward looking and not conducive to cosmopolitanism.

Somebody once made the quip that the world, country by country, is divided into the tribalethnonationalSerbs (so to speak) in conflict with the “cosmopolitans.”

In this vocabulary Trump and Trumpism are “Serbian.” He will decide who is and who is not a “real American.”

Go back to our essay on the concept of “peopleclass” and all the attendant genocidal murders. (Uganda under Amin being the example we’re mindful of here).

Ethnonationalism (e.g., “Serbian” style anti-cosmopolitanism) is of course exactly what is at war with cosmopolitan or internationalist global trends and commercial chains which makes it nativist. Populism refers to that connected sense that the elites (in the worst case, “The Davos Crowd”) are trying to destroy the real people (e.g., “Trump’s America”) via their internationalist or cosmopolitan attitudes and behaviors.

Thus the movie The Last King of Scotland and the discussions it engendered are very “canonical” or educational in laying forth this “civil war” everywhere.

Thinking of a group as a “peopleclass” tells you that Idi Amin or Rwanda 1994 belligerence (i.e., ethnonationalism) is being stoked by politicians to create “hatred opportunities” like Trump did. Trump’s idea was to use hatred as a “wave maker” that he could ride. The Trump voters created a nativist/populist cult figure in Trump. He would protect them from the outside world and globalism by ethnonationalism.

Forest Steven Whitaker (born July 15, 1961) is an American actor, producer, director, and activist. He is the recipient of such accolades as an Academy Award, a Golden Globe Award, a British Academy Film Award, and two Screen Actors Guild Awards.

After making his film debut in Fast Times at Ridgemont High (1982), Whitaker went on to earn a reputation for intensive character study work for films such as Bird; Good Morning, Vietnam; The Crying Game; Platoon; Ghost Dog: The Way of the Samurai; The Great Debaters; The Butler; Arrival; and Respect. He has also appeared in blockbusters such as Panic Room, Rogue One: A Star Wars Story as Saw Gerrera and Black Panther as Zuri. For his portrayal of Ugandan dictator Idi Amin in the British historical drama film The Last King of Scotland (2006), Whitaker won the Academy Award for Best Actor.

Wikipedia