The Death Of Globalization? In Fact, It Is Doing Quite Well
Tim Fernholz reviews a new book by foreign policy analyst and Tufts University professor Dan Drezner, The System Worked: How the World Stopped Another Depression, which posits that global economic governance prevented the financial system from falling into a deep Depression.
In his book, Drenzer said it is not globalization, but global governments, that have failed in erasing or limiting inequality. According to Fernholz, Drezner cites Apple’s supply chain, which led the US to send $1.9 billion to China in 2009 for iPhones alone, to keeping the global economy moving.
“Unlike in past periods, when trade failed to operate as a unifying force (before World War I, say), today’s trade isn’t just finished goods between countries: China imports 96% of the materials and components necessary to build an iPhone. That level of micro-integration arrayed interests, not just in China but in a community of countries, against cutting back on participation in the global economic system,” writes Frenholz.
Peter Hall, Chief Economist at Export Development Canada, also weighs in on the health of globalization and says reports of its death are themselves dead.
“Recession-fed neo-protectionism is a much greater concern. The world has long since concluded that the benefits of freer trade far outweigh the costs,” he writes in The Huffington Post.
Hall says the idea of globalization appeared to be on the ropes following the Great Recession when economies and nations shuttered their doors and protectionism gained popularity. While globalization survived the economic slowdown, its future will depend on the course of the recovery.
However, Hall seems unconcerned that globalization will remain alive in theory and practice.
“For multiple reasons, globalization has a gravitational pull that is hard to resist. We have likely just gone to the further reaches of an elliptical orbit that renewed growth will pull us back from. Over the coming months and years, we are likely to see the rapid dismantling of the post-crisis period’s economic Maginot lines.
“The bottom line? Globalization is alive and well, and the launch of the world economy’s next growth cycle — now underway — will prove it all over again,” Hall concludes.
The recent elections in Europe were seen as a victory for those opposed to greater integration, particularly the European Union, but Andy Baker, a political scientist at the University of Colorado at Boulder, says globalization is thriving in another part of the world – Latin America.
In a guest editorial in The Washington Post, Baker contends that it is somewhat of a surprise in a region that spawned dependency theory, the neo-Marxist body of scholarly thought critical of international trade, “all evidence shows them to be surprisingly enthusiastic about globalization and incredibly forgiving of their colonial and neo-colonial tormentors.”
He points to surveys from Latinobarometro, which has interviewed nationwide samples of citizens in 18 Latin American countries almost annually since 1995, and the Pew Global Attitudes that show Latin Americans embracing globalization.
Baker, the author of “The Market and the Masses in Latin America” and “Shaping the Developing World,” counters arguments that elections in the region could be seen as anti-globalization.
“Not really. Americans and other Westerners surely flatter themselves in thinking that Latin Americans are thinking about them when they vote. Matters closer to home, such as the domestic economy, incumbent competence and corruption tend to swing Latin American elections, just as they do in the United States. The left rose much less because of voters’ wholesale rejection of globalization and more because of their desire to slow the pace of other market reforms,” he asserts.