Thursday, July 31, 2014

Globalization is over; or, Tom Friedman is a dope

Yes indeed, the Tom Friedman conception of globalization (The Lexus and the Olive Tree; The World Is Flat).was always too glib, optimistic and it cherry-picked success stories to paint a rosy picture.

Now we see how useless was Tom Friedman's "Golden Arches theory of conflict prevention," with Russia attacking its neighbors and fellow McDonald's countries Ukraine and Georgia, and threatening to further destabilize or attack a third McDonald's country, Moldova. 

And several more "McDonald's conflicts" -- Vietnam-China, Japan-China, EU-Russia, and US-Russia -- are starting or now underway.

Leonard's article is worth reading in full, wherein he describes how the globe is moving:
  • From free trade to economic warfare
  • From global governance to competitive multilateralism
  • From one Internet to many.
Leonard redeems the post-Cold War analysis of military strategist Edward Luttwak, who predicted that "as in earlier generations, the driving force of international relations would be conflict rather than trade. As he put it, we would have 'the grammar of commerce but the logic of war.'"

Here is Leonard's conclusion [emphasis mine]:

Interdependence, formerly an economic boon, has now become a threat as well. No one is willing to lose out on the benefits of a global economy, but all great powers are thinking about how to protect themselves from its risks, military and otherwise. China is moving toward domestic consumption after the threat of the U.S. financial crisis. America is moving toward energy independence after the Iraq War. Russia is trying to build a Eurasian Union after the euro crisis. And even internationalist Germany is trying to change the EU so that its fellow member states are bound into German-style policies.

In the years after the Cold War, interdependence was a force for ending conflict.  But in 2014, it is creating it. After 25 years of being bound together ever more tightly, the world seems intent on resegregating itself. 

To be fair, Leonard's conclusion might also be too glib; one could argue that globalization was never happening to the extent that it was hyped. A lot of economic globalization -- more than 1/3 of economic activity -- has been intra-company and inter-company trade, i.e. companies trading with themselves across borders to access cheaper labor markets and other cost efficiencies, tax preferences and laxer regulation. 

Meanwhile, rival countries have not forgotten their historical and geopolitical grudges in the name of "free trade;" they have simply adopted new strategies of conflict management.

UPDATE (09.08.2014): Here's Anne Applebaum in the Washington Post a couple weeks later cribbing Mark Leonard's column, complete with the same McDonald's analysis: "Russia's blow to globalization." 

By Mark Leonard
July 30, 2014 | Reuters

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