As part of a larger study on the future of the post-World War II liberal international order, RAND researchers analyze the health of the existing order and offer implications for future U.S. policy. [Note: contains copyrighted material].
Globalization is under attack in the West. The debate among pundits is no longer about whether globalization is to blame or not. It is about why globalization is now the bugaboo it has become.
Is the resistance to globalization grounded in economic losses for the once-secure middle class citizens of the Western-style democracies, and the fear of future losses for them and their children? Has anti-globalization grown because the growth of trade has brought economic competition from China, reducing high-wage manufacturing jobs, and more immigrants taking once steady working class “trades” and construction and other service jobs? Or is the anti-globalization movement (Trump’s America First) a by-product of what we call, in the United States, the “culture wars?” Is the rise of protectionism and anti-immigrant, nationalist xenophobia fundamentally about inchoate resentment of a new “cosmopolitan” elite: the corporate “Davos men,” bankers, lawyers, “experts,” even academics, whose globalist attitudes and networks are unmooring Western societies from allegiances to traditional nationalist, ethnic, and religious customs and values? [Note: contains copyrighted material].
Politicians are reaping gains by wrapping themselves in flags and directing hostility toward globalization. “Humankind is developing an emerging ‘global consciousness’ – a collective sensitivity to noble thoughts as well as to phobias and ignoble protectionism,” explains Farok Contractor, a professor of global management at Rutgers University. Contractor describes how responses to global connections divide societies. One example is the embrace of Valentine’s Day by many consumers in Asia while some religious fanatics in India target foreign practices for eroding cultural traditions. Likewise, voters in rural United States and Britain, areas with few foreigners, fell prey to scaremongering about immigration while the more educated and wealthy in cities may be less threatened by multicultural ideas. Angst over job losses, stagnant wages and changing industries is real, but unscrupulous media and populists manipulate audiences by blaming globalization, trade and immigration rather than automation or the quest for modernization by majorities in many countries. Contractor concludes that “Globalization is a symptom of human desire and ambition leading to ever-increasing connections.” Nations that resist globalization, rather than engaging in thoughtful examination and policymaking, will encounter many negative consequences. [Note: contains copyrighted material].
Hufbauer and Lu, updating a landmark PIIE study made in 2005, calculate the payoff to the United States from trade expansion from 1950 to 2016 at $2.1 trillion. The payoff has stemmed from trade expansion resulting from policy liberalization and improved transportation and communications technology. The sum translates into an increase of $7,014 in GDP per capita and $18,131 in GDP per household. The potential gains from future policy liberalization could be as large as $540 billion for the United States by the year 2025, or an increase of $1,670 in GDP per capita and $4,400 in GDP per household. On the other hand, 156,250 manufacturing sector jobs were lost annually over the past 13 years, representing less than a percent of the number of people involuntary separated from their jobs each year. A more generous unemployment insurance program and expanded tax credits would help displaced workers adjust, the authors argue, while preserving the large gains resulting from trade expansion. [Note: contains copyrighted material].
The “no vote” victory rejecting Italy’s constitutional referendum is widely interpreted as a clear win for anti-globalization populist forces in Europe. Even the defeat of Austria’s anti-immigrant populist Norbert Hofer last Sunday in the presidential elections, with just a 53-47 percentage, is seen in the same vein, as the extreme-right candidate’s loss was slim. Forces from the political edges are gaining ground in the post-truth era and many pundits think the path of global integration has stalled. The author sees it differently. The schism of societies currently underway, even in the prosperous western democracies, is more of a globalization victory than a defeat. [Note: contains copyrighted material].
Trade is the glue for globalization and without it other connections can subside. But US voters rejected a US leadership role in global trade deals and elected billionaire Donald Trump who has already signaled intent to have the United States to withdraw from the Trans-Pacific Partnership with 11 other nations. Analysts suggest that China could step into the US role, but “The baton of global leadership rarely passes in such a seamless fashion,” cautions Yale professor Stephen S. Roach. The United States has global responsibilities not easily dismissed, and China confronts multiple risks including high debt and other economic imbalances. Roach proposes that Trump could pursue another huge opportunity by concluding the US-China Bilateral Investment Treaty, under negotiation since 2008. China is the third biggest US export market. Roach concludes, “For a growth-starved US economy, there could be no better way of tapping into what promises to be the world’s greatest market expansion in the years ahead.” [Note: contains copyrighted material].
Tools of globalization like the internet, so often blamed for homogenizing the world, are also encouraging diverse lingual communities to connect and even revitalize their endangered languages. “Linguists estimate that of the world’s remaining 6,500 languages, up to half will no longer be in regular use by the end of this century,” notes Mark Turin, linguist and anthropologist. Many are indigenous languages, which “function as vehicles for the transmission of cultural traditions, environmental understandings and knowledge about medicinal plants, all at risk when elders die and livelihoods are disrupted.” Turin describes linguists’ efforts to compile archives of digitized audio, visual and other documents to ensure that these languages and the cultures they reflect do not simply vanish, their contributions going unforgotten. Globalization is often more process than intent, and the real force behind cultural homogenization, Turin maintains, is unbending beliefs reinforced by monolingualism. [Note: contains copyrighted material].