Globalization is a term that has come to mean negative things, for some reason. I’m not exactly sure when it started, but sometime in the last ten years or so, a concept that used to be viewed as beneficial somehow came to represent oppression, confinement, intolerance of diversity, condensation of power and exploitation. While I think these horrendous realities are indeed of concern, and do occur within the context of human behavior around the world, I don’t think they are the result of global trends that are typically inferred by the word “globalization”.
For example, “globalization” is generally agreed to include as part of its definition the spread of commerce around the world through trade agreements that reduce the barriers historically used to protect producers within a nation’s boundaries. Detractors of such free trade agreements point to the elimination of jobs that can come with a lack of tariffs and customs duties that would otherwise assure competitive pricing for the home country businesses. But if we define the market to include all capitalistic trading partners on every continent, the loss of jobs in one location is offset by the creation of jobs in another. This causes the economic system of the “losing” location to solve its problem of unemployment. Solutions typically seen include reducing production costs to adequately compete with foreign producers, labor forces moving to higher demand/lower supply regions and industries, and the invention of new businesses that can take advantage of the labor supply and have competitive advantages which the “lost” industries don’t.
You can trace the predictable phase changes associated with free trade by examining the histories of the auto industry, the steel industry, oil production, integrated circuit manufacturing and even accounting services. Each of these American industries, and more besides, experienced prior dominance in the world, suffered from foreign competition which applied cost advantages, adjusted to create sustainability and invented new business models. Let’s look at automobiles. Most “American” made cars have engines, transmissions or other key components that are made outside of the U.S. And many of the “foreign” cars sold here are actually assembled and tested in the U.S., containing parts that were manufactured in this country. If you take apart any car, “foreign” or “domestic”, and trace the lineage of its constituent parts, you will find a collection of nationalities representative of many countries. This is truly globalization, when the interconnected web of economic relationships transcends the geographic boundaries drawn on national maps.
Another example. The oil industry is really broken down into four parts: exploration, production, refining and distribution. Exploration is hugely expensive and requires multi-national companies working in many countries. Production is local to the field, and refining is local to the market, as is retail distribution. The connection between production and refining/distribution is symbiotic. You can’t produce more than you can refine without decreasing the value of the raw commodity. You can’t refine more than you can distribute based on market demand, else risk lowering the value of the refined product, and even possibly wasting it. (Gasoline doesn’t last that long in storage, without special additives. Diesel fares better.). The interconnectedness of nations and businesses requires very close coordination and cooperation, in order to protect the investments that each party makes. Headlines and crowd-pleasing political rhetoric notwithstanding, I suggest that the oil industry is a highly interdependent, efficient global exchange of a commodity that everyone currently relies upon, and which is an example of incredibly cooperative international activity. The fact that there is periodic conflict over the black goo only demonstrates the power of the cooperation. Imagine if there were no global interdependency in the four stages of creating usable material out of crude oil. Not a good scenario for stability of international relations. The fact that oil is (currently) indispensable makes it that much more critical that many nations participate in its recovery from the earth and its transformation into usable, distributed liquids. A monopoly creates an imbalance in power that fosters the more violent forms of redistribution.
Every industry that has been impacted by what is called “globalization” first decries the competition, then re-invents and adjusts, and finally comes to benefit by the resultant interconnectedness that glues us together economically. The consuming public has long benefited by the globalizing trends in business. Our standard of living in this country, for example, has stayed very high in comparison to other less developed nations because the products we consume are made in locations that provide the lowest costs. Capitalism chases cheap labor, cheap supplies and raw material, cheap methods of distribution, etc. Capitalism goes where it must to increase profits and wring out inefficiencies. Now, manufacturing is coming back in certain product areas to the U.S., because the cost of transporting components and finished goods is washing out the labor cost savings in countries distant from the market. And labor costs in “developing” economies are rising at a much, much faster rate than in mature economies, so the cost advantage is diminishing there as well. The cycles play out.
I think the globalization of industries creates strong, resilient bonds that diminish the chances for isolation and conflict. Military treaties only last so long as there is a common threat to encourage the bond. However, economic relationships are like Thanksgiving with the in-laws. The dinner talk isn’t always pleasant, but everybody brings a dish to share and helps to clean up.