Globalization Needs Urgent Fixing
In an interview for CBS News on March 8, 2009, during the financial crisis that became known as the Great Recession, then Wachovia Corp. economist Mark Vitner said that untying the world’s entangled economies is “like trying to unscramble scrambled eggs. It just can’t be done that easily. I don’t know if it can be done at all.” Since then, we have grown even more entangled. Nevertheless, the developing food crisis because of the Russia-Ukraine war, the semiconductor crisis and shipment delays because of the pandemic, and the increasing international tensions have brought back the question of deglobalization.
If we dedicate efforts to teaching ourselves about our interdependence and the necessity to collaborate positively, we can reverse the negative trajectory and the threat of war. Instead, we will advance with globalization peacefully, in a way that benefits everyone, and truly provides for all our needs.
At the 2022 meeting of the World Economic Forum (WEF) that ended just last week, deglobalization was again a major topic. The Financial Times reported in one story that “The three-decade era of globalisation risks going into reverse according to company executives and investors,” and in another story, argued that “Technological progress suggests the turn from globalisation can bring benefits as well as challenges.”
I agree with Vitner’s observation that it is impossible to deglobalize the world economy. It cannot be done, not now, not ever, and in the future, it will be even more scrambled than today.
However, and this is why economists are toying with the idea of breaking the ties between the world’s economies, globalization is aggravating the world’s problems because it is based on such negative relationships that we should stop its progress and not continue until we organize it on a more positive basis for everyone involved.
Currently, we are relating to our economic relations the same as we are relating to all of our relationships: from an exploitative approach. Without realizing that the economy provides for our most basic needs, and should therefore not be treated as a means for abusing and trampling other people, the world economy will continue to slow down and food and gas shortages will escalate.
The paralysis will lead to famine in many countries and severe shortage of staples in many others. As a result, conflicts will become violent, wars will break out, and life will devolve to 19th century conditions. We cannot afford to mistreat each other when it comes to economic matters.
What is even more frustrating is that the shortages are not real; they are the outcomes of nations’ unwillingness to supply other countries with necessary products. If we change our attitude toward each other, we will discover that we already have an abundance of everything and there will be no shortages of any kind.
Thanks to globalization, small countries such as Singapore, Israel, some of the Arab states in the Persian Gulf, European countries with small populations, and small islands can all prosper despite their size. They import what they need, which is most everything, and export unique products or technologies, or rely on tourism. However, in the absence of extensive and constructive ties between countries and nations, such countries will not be able to provide for themselves, and they will simply disappear.
Notwithstanding, we will not be able to stop being dependent on each other. We may think we can, and this is why deglobalization was a topic of discussion at the WEF, but we will not be able to do so. One way or the other, we will have to improve our relationships and stop trying to belittle and put each other down. We will discover that even trying to do so, as is happening now, causes tremendous harm to everyone, including to ourselves.
There is no way to go through the shift without some level of pain. Pain is the only impetus for change. However, I hope that we will be clever enough to respond to it quickly so that the level of pain we must endure will not entail a third, nuclear world war.
The natural evolution of humanity has connected us, and nature does not reverse its track. Therefore, all we can do is try to move forward pleasantly and not painfully.
If we dedicate efforts to teaching ourselves about our interdependence and the necessity to collaborate positively, we can reverse the negative trajectory and the threat of war. Instead, we will advance with globalization peacefully, in a way that benefits everyone, and truly provides for all our needs.