Perspective is everything.
Living in Southern Africa in the late 1980s and early 90s, before the internet became the source of information it is today, my main sources of international news were Newsweek magazine and CNN.
I remember “Globalization” being the main topic in political and economic news reports.
It was promoted from the perspective that it would be the solution to all mankind’s problems. It would create better education and living standards in developing countries. Prevent wars, end child labour, sexual discrimination, income “inequality” and reduce diseases. Transferring technology from the West would revolutionise agriculture, reduce pollution and better use scarce resources.
In the developed world it was supposed to open a whole universe of new opportunities in the service sector, reduce mind numbing repetitive jobs.
It was one of the few ideas supported by both businesses with a profit motive and aid organisations working to uplift the poor.
At the time I was fortunate to live in a region that had a very small first world sector of the economy supporting a very large third world sector. An economy that in South Africa was advanced enough to have carried out the world’s first heart transplant, was a leader in oil from coal technology and deep level mining.
In Rhodesia before 1980, a much smaller economy, but with agricultural expertise to develop some of the first hybrid maize (corn) varieties, producing world record-breaking yields. Later to quickly set up manufacturing facilities to produce replacements for previously imported products blocked by sanctions.
In both countries, less than 10% of the population living by first world standards with millions of others living under tribal conditions or in urban poverty. This large sector generating little income, paying almost no taxes but benefitting from services paid for by tax paying business owners and employees in the very small first world sector.
It was almost a laboratory experiment of the process of globalization that was starting.
I am not an economist and do not claim to have supernatural forecasting powers. However with a different perspective at the time I could not help compare the progress of bringing millions of third world level people up to first world standards in the two countries I knew well, to doing that on a global scale.
If it was extremely difficult for a few million, how much more difficult would it be for several billion?
With the best will in the world and billions of dollars to invest, was it realistic to think that globalization could do so much for so many people?. Could what had taken Western civilization over 2000 years to achieve, be accomplished in one generation?
Since then I have always suspected that the negative effects of globalization have been down played by major corporations, governments, the media and other groups with vested interests.
Is that starting to change?
In April The Washington Post ran an article titled “The Great Unravelling of Globalization” which suggests that globalization has not brought all the benefits that were promised 30 years ago.
Many Western businesses are finding that despite investing billions of dollars in the third world, profits are lower and problems greater, than in their own countries.
Hundreds of thousands of jobs in the West have been exported to developing countries, entire domestic industries have gone into decline, some terminally because of access to cheap labour through globalization.
Is globalization all bad?
No. It depends on your perspective.
It has provided many of the expected benefits to hundreds of millions of people in developing countries, created wealth in those countries, increased the flow of world trade.
Ironically it may have benefitted Western manufacturers who did not rush to set up factories in those countries. General Motor’s huge investments in joint ventures in China may have helped create a wealthy class of consumers more interested in spending their new-found riches on imported Rolls Royces, Rolex watches and champagne than the small vehicles made in its Chinese plants.
The purpose of this post is not to debate the good and bad of globalization or foreign investment, if you want to get a better perspective click on the Wikipedia and Washington Post links above and read the articles.
My purpose is to get you to think of the implications of any reversal of the globalization trend for you, your life.
What will increased isolation, protection of domestic industry and trade do to your business or your job? Your investments? Your retirement?
Since the end of the 20th century, we have heard that the old model of life-long work for one or a few employers with a pension at the end, is dead. I believe it is for most people, but perhaps it will rise from the ashes in a different form.
What’s your perspective?
photo courtesy freedigitalphotos.net