While globalisation gently sleeps

| Updated: October 24, 2017 21:59:00

While globalisation gently sleeps

Globalisation is not dead, not by a long shot. Amid the hoopla behind Brexit and Donald J. Trump's 'America First' policy-orientation over the past year or so, not to mention other similar inwardly-looking spurts since the Great Recession began in 2008, a cottage industry describing and predicting the collapse of globalisation has dominated the literary world. Given the heat of any moment during that time, at least two secular factors get completely obscured: (a) the cyclical nature of the globalisation-nationalism tussle has been on an upward trend favouring globalisation regardless of the length, breadth, and depth of nationalistic sways; and (b) our vehicles into the future, technological progress, have virtually left us no choice but to grab globalising forces, the sooner the better, the more the merrier.
Business cycles have a way of informing us which of the routine upswings and downswings are the pivotal ones: they go beyond regular corporation-level industry adjustments to demand-supply balances by identifying the extraordinarily rare sector-level shifts. Trade brings this dynamic into play; and just in the free-trade era, that is, from mid-19th Century, the cataclysmic changes took place in the 1870s-80s and the 1930s. In the former, the textile industry was overtaken by steel-based industries, evident in the wild expansion of rail-lines, automobiles, airplanes, the reinforced concrete that makes skyscraper-buildings possible, and, of course, a variety of high-powered weapons, from the needle-gun to tanks to bombers. From the Franco-Prussian wars until 1870 to the end of the Second World War, nationalist forces were insurmountable, so much so that as they locked horns across state-boundaries, the future also looked dismal: business owners preferred being dubbed 'robber-barons' than going bankrupt and over philanthropy.
Yet, the world still advanced, with innovations in every field revolutionising production, consumption, education, communication, and recreation. The industrial sector had deepened its reaches, diversifying from ready-made garments to a wider range of sophisticated manufactured goods than during the rest of previous history.
The global economy went through another such cataclysmic moment between the two world wars, this time with the agricultural sector being toppled as the largest contributing sector to the economy by manufactured goods. Tractors facilitated this shift, pushing farmers into bankruptcy, urban migration, and a search for factory jobs, especially in import-substitution industries (ISI). It was as true in North America as in Latin America, North Sea Europe, and Mediterranean Europe.
Common to both episodes were (a) technological upgrading boosting production, thus the need for greater market-access, in other words, instinctual globalisation; and (b) adjustments to ever higher spread of free-trade practices, from bilateral to regional, plurilateral, thence multilateral, not in a zero-sum fashion, but simultaneously. More countries practice the second-best trade policy option of a liberal orientation today than ever before, if World Trade Organisation membership is any guide (where the occasional retreat into protectionist measures is even permitted).
Technology demands both, from the assembly-line of two-and-a-half century ago to off-shore networks over the past century. Today's new technological is built upon artificial intelligence (AI), again constituting a sector-based shift, from manufacture to services: all kinds of services, from low-wage-migrants and nurses to banking, investment, financing, and planning, from material goods to strategies, secrets, and speed; from the assembly-line to software programming.
As in the 1870s/1880s and 1930s, today's shift is also marked by a huge economic downturn, from 2008: it has been of a longer duration than typical corporation-level demand-supply adjustments since the instruments and structures must also shift. It is a time of intense flux, necessitating desperate safeguards. National governments have provided these more efficiently than any other agency, from tariff policies to social security provisions and welfare. No corporations can match that for as many people. People cannot help but return to the secure confines controlled by the government rather than trade agreements or other partnerships abroad.
Unlike before, when external competitive threats came from limited countries located in symmetrically structured regions, today's is more open-ended in every respect, encompassing the entire world. There is more reason to fear the more developed the country one belongs to: comparative advantage is shifting from precisely these locations to others. Populism grows commensurately with that fear, but globalising forces grow even faster because a wider distribution of competitive manufacturers beyond the suddenly unemployed in the uncompetitive zones needs larger markets than the safety of the domestic market. Noise stems from one, growth occurs in the other.
Today's AI technology makes the world as the unit instead of the country. Those countries adjusting accordingly may reap more of the fruits than those that do not. For example, China's 'one-belt-one-road' strategy seeks broader markets globally, but Brexit does not, though Britain can still turn out a winner if it substitutes Europe for the world for its markets. So too can Trump's United States, the Trans-Pacific Partnership (TPP) rather than his 'American First' slogan. Only Australia, Canada, Japan and New Zealand have been adjusting to the new forces among the industrialised countries outside Europe, alongside France and Germany within Europe.
As evident, since we hear and speak more about Brexit, Trump and other retreating forces/factors, globalising counterparts, such as AI dissemination, do not receive, nor even demand, as much attention even though their long-term impacts may be more telling. Cultivating AI technologies further impede their access and full functioning: they require more intellectual inputs (training such as 'deep learning') for innovation than, say, assembly-line manufacture production or back-breaking agriculture ('hardware' requires fixed infrastructure, thus is more long-lasting than 'software' which can be developed on the run, if needed). Therefore, fewer students capture the appropriate skills than before, that too amid a secular decline in student-attention to class-room activities
External forces have also been reducing or redirecting globalisation growth. For example, the present defeat of such terror groups as Islamic State has reduced their international campaigns to recruit members, acquire funds, and travel wherever they like. Because of their activities, international travel cannot reach its peak levels, whether in passenger-flows or destinations travelled. On the other hand, to contain them, globalising military intelligence indicates how globalisation is alive and well, but in arenas and with activities that cannot be replicated several times over. Reduced access is also fed by the frequency with which 'software' changes: not every individual or institution can upgrade their software systems every year, for example, when Microsoft Word brings out a new version. Expenses do get in the way, in turn, converting each globalising stride into a more exclusive market. If anything, globalisation feeds significantly into widening gaps of income and intelligence.
In short, globalising forces have been relegated to the back-burner, become unaffordable, or keeps playing in silent-mode. They just have not, and indeed, cannot, disappear or retreat. The present lull is simply an incubation phase to plan, design, and deploy, technological progress.
Dr. Imtiaz A. Hussain is Professor & Head of the newly-built Department of Global Studies & Governance at Independent University, Bangladesh.
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