If those in power dealt with emergent threats like epidemics, climate change, AI safety, nuclear war, maybe we could trust them with globalized supply chains. But since they hoard profits and refuse to pay taxes, while failing to prioritize the populace survival, seems we may do well to localize into our own communities. Why should we accept global threats and barely reap the rewards of global commerce?
Standing in the way of corporate or city-state primacy is the hyper-efficiency of the modern global economy.
Bearing the cost of ones own defense and foreign policy, instead of outsourcing it to your host government, is incredibly inefficient and leaves you open to price competition from your government-sheltered peers.
That's the entire reason the global economy of politcal-economic alliances and trade policies was created: to benefit from global, lower-cost manufacturing while still retaining the benefit of government protection.
It seems more likely we'll revert to a multi-polar late-Cold War state of affairs, with global supply chains much more influenced by current military alliances.
This is the reason we need a less globalized world where dangerous regimes like the United States can't claim most of the world's commerce through imperialism then turn around and gatekeep because "its theirs"
What threatened globalization was when COVID exposed just how fragile all of our supply chains were. Making them more fault tolerant isn't "protectionism" or "zero sum thinking", it's just good sense.
Local food is one thing—it seems absurd to ship a cucumber thousands of miles when I can just grow some in my garden. But a global society is absolutely essential to the continued well-being of our species. Globalisation is a powerful force against misinformation and propaganda—and in turn xenophobia and war.
And our global transportation infrastructure isn’t perfect, but it is the best it’s ever been in all of human history. So I would argue that buying locally is far less important than, say, buying handcrafted goods from small businesses, regardless of location.
Hum, nope. We will not rethink globalized supply chains.
It's a good time to invest in research about knowledge protection and flexible production. It's also a good time to invest in emergency production capacity (best if it's of the flexible kind) by the government, most likely inside the military. (It may also be a good time for most countries to rethink the role of the military.)
But we will not adopt suboptimal methods on the private economy. It doesn't work that way.
This kind of hardcore position really irritates me. Can one really say that globalism is "dead" when the very example, a TSMC factory in Arizona, is a transnational investment?
The analogy is autocracy: A "Tyrant" can indeed be useful in a crisis (Churchill was as close to this point as you can find in recent history) but if they steer wrong, or if there is no crisis, history shows they are a disaster. Likewise, nativism in manufacturing can have some limited benefit (consider manufacturing for your military) but in a greater sense leads to disaster.
The way to think of this issue is resilience. You want to have a diversity of suppliers and have them have independent failure modes. Likewise you don't want local monocultures (Detroit and cars, West Virgina and coal, the loss of the semi mfg infrastructure by Silicon Valley) because all-eggs-in-one-basket is the opposite of resilience.
Also Westfalian boundaries are pretty arbitrary for this issue. Should California have its own solar panel industry instead of buying from China? Or would it be OK to buy from Idaho?
Silicon Valley still has quite a diversity of technical domains while SF evolved late and remained more of a monculture (and thus is losing a small amount of share to NYC, which SV is not). Is anyone wringing their hands over this? I don't think so, and nobody should be.
Earlier today I was thinking about this positively. None of my ideas are original, but some anti-corporatism thought struck a chord today. Why do we rely on dictatorships and unstable countries for critical infrastructure? Why do we rely on slave labor overseas for such basics as textiles when we could make it here? It isn't "markets" that are wrong altogether, but there is something destabilizing and unethical about shipping a neighbor's job away to a slave to save a penny for the stockholder.
Supply chains and globalization should be very much rethought in this century.
Of course, tribalism is the primary motivator here, but I think there are a couple other economic and moral arguments to be made against unbridled globalism.
From an economic perspective, much of international economic growth is based on confidence rather than rational analysis of economic situations. Credit markets underpin everything we do, and we have seen what happens when a lack of confidence undermines an entire global credit system (e.g. It causes a global economic crisis). A steady outflow of jobs from a currently wealthy country could potentially undermine consumer confidence in that country, which would in turn decrease consume spending and the tolerance for risk in that country, which could prompt a credit shrink in the short- to medium-term, meaning that in aggregate, everyone might be worse off. Now, in the long-term, things would generally even out, but it stands to reason that achieving that globalization without such a rock to confidence in wealthy countries (perhaps in a slower or government-assisted way) immediate negative effects might be mitigated and the ride might be smoother for everyone.
On the moral side of things, one could make the argument that it's morally inconsistent to allow manufacturing and services to move to countries where labor laws and political/societal conditions are sufficiently transgressive in the eyes of the public. This is kind of a tricky idea to pick apart and is a bit fuzzy but I'll try to give an example. Consider a company that makes shoes in a country with strong labor protections for children and low corruption in government. If that company were to move operations to a country where children are regularly exploited to drive down manufacturing costs (and the company makes use of this cultural/societal condition), a resident of the former country could make a strong moral case that this company should not be allowed to continue selling its goods in that country, because the supply chain is tainted. This is a very common situation (Nestle, for instance, is notorious for these kinds of ethical violations). Once again, in the long term increased industrial economic activity in a region will generally cause it to become wealthier and improve labor protections, but in the short- to medium-term it is not unreasonable to oppose the transfer of manufacturing and service operations to places where workers are not entitled to rights that people in a wealthier/more-protected country might consider fundamental. This is unlikely to be the case for offshoring IT jobs to Bangalore (although one could potentially find gripes with systemic corruption in India), but is more common in textile-exporting countries in South-East Asia.
I'm right there with you in thinking that one human being is no more entitled to a job than another just by the section of ground he happened to be born on, but we live in a complicated world that is in a suboptimal configuration, and unbridled globalization might not be the most effective way to achieve more equity universally.
Globalized society isn't a given; it isn't like the world doesn't work with nations maintaining domestic manufacturing capability.
In fact, the biggest push to economically globalize was actually a strategic move to spread influence in the Cold War era, and a means to the end of international peacekeeping through economic interdependence.
This pandemic in particular has highlighted some of the fundamental flaws in that model, however. Namely that if you don't have maximum commitment by all members (to help, and to not hinder), it leads to decisions being made that are worse for everyone globally.
For instance; Chinna may have completely shut down, and allowed western help if they did not feel it would unduly threaten their national security; and that they could with full faith trust that other nations would not exploit the period of temporary weakness while the virus was in the process of being contained.
That did not happen, nor will it likely ever. The fact is, globalization is only touted it seems by idealists, and capital wielders looking to stretch the buck that much further. In terms of local sociocultural security; it tends to be a non-starter.
It's a pity really. I can understand and see both sides of the issue's sentiments. I'll be damned if I can figure out any way to reconcile their contentions though.
How would it work if we got globalism "right"? What if instead of a virus, it was an asteroid which instantly destroyed all the factories in Country X, so there's no way for Country X to send supplies overseas even if they wanted to? If we want to be safe from events like that, we better not outsource any critical production to Country X. But if we don't outsource any critical production to any foreign countries, what's even left of globalism then?
I think what Globalization skeptics like me are saying is actually really simple: you shouldn't outsource your critical shit to hostile countries.
Not really more complicated than that. If we're talking about the US, other countries can sell their EVs here, no problem, but you have to be in the club. Since the 1990s, we've sort of skirted our moral responsibility on who we trade with because it made a bunch of people rich, and then those rich people gave money to politicians who helped make other people rich, who then ran for office and so on. This responsibility isn't limited to "don't trade with countries that have concentration camps", it also extends to "be smart about how you trade and who you trade with such that you don't destroy your own industry and middle class".
Really not that complicated.
>The global information economy is the profit being made from trading in electronic services. Rent on transactions in payments, funds transfer, arbitrage, the dutch-irish sandwich...
This is a goofy way of saying "the global information economy" makes money on spying on human behavior and then selling ads based on that behavior. Yuck.
By global, I mean Universal, all-encompassing. Advocating for one such system is like advocating for a global government.
There are better alternatives. Local, discrete, networked systems that can co-evolve with its participants. They reduce of total collapse of the system and reduce systemic risk.
I didn't read the article because of a paywall, while I tend to agree with your point, it misses some nuance. Globalism can be both fragile and resilient to breakage. So, for example, closing the Suez canal might result short-term increase in energy costs, along with all of the follow-on effects, but the global supply chain itself will "reroute around the damage" and take a less geographically optimal, slightly more expensive but still functional route.
Also, a "threat [to] the world economy" need not be existential. The threat of recession is also possible, and likely with a situation like this.
That said, I believe there ARE existential threats posed by globalism, particularly where inter-dependency is present for generations, such that either side of the relationship institutionally forgets how to maintain, repair or upgrade significant infrastructure. Arguably that is already the case for America with energy transmission equipment, semiconductor and PCB manufacturing, such that a war with China that began with a strike to those resources could not be recovered from.
I think a major reason might be that a precondition for globalism has been the US Navy patrolling the high seas and making shipping safe and reliable. As the US retreats from that, the reality will be that many countries cannot guarantee their supply lines. Peter Zeihan talks about this (and many other factors).
The US has been doing this for a long time, but it's gotten to the point where it isn't clear that it is in our interests, e.g., to enable China to be a major trading power.
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