Anti-globalists should be careful what they wish for
Klaus Schwab and his team were on to something when they chose globalization 4.0 as the theme for last month’s annual meeting of the World Economic Forum. As so often, Davos captured the Zeitgeist when it examined the link between globalization and what new technologies (artificial intelligence, robots, etc.) mean to how we live our lives. It addressed the issues of where to find the jobs of the future, and how to provide food and energy for the soon to be 8 billion inhabitants of the world in an increasingly globalized environment.
The winners and losers produced by globalization are well documented, and anti-globalization rumblings have been around for two decades. Their protagonists lacked voice and were banished to the fringes of anti-G8 demonstrations and later the Occupy Wall Street movement. The financial crisis heightened sensibility to the losers of the established economic system. They were swept up in various populist movements that became increasingly mainstream. In Europe Germany’s AfD (Alternative fuer Deutschland), France’s FN (Front National) or the Netherlands’ Freedom Party all gained substantial minority positions in Parliament. They are among the strongest anti-globalization advocates. They are even critical of regional frameworks of cooperation such as the EU. Brexit was another manifestation of these sentiments. Nigel Farage did not just capture the anti-EU sentiment prevalent in large segments of the UK population, he also cleverly played on how the average Briton felt unrepresented by the out-of-touch political elites in Westminster. Worse, many citizens were out of a job or fearing for their employment, and post-financial crisis austerity had hit them particularly hard.
The strongest manifestation of the anti-globalization skepticism is the movement — for a movement it was — that brought Donald Trump to power.
The debate as to how much tax the Facebooks, Googles and Amazons of this world ought to pay has been raging in many countries for some time. It is directly related to questions of fairness surrounding the phenomenon of globalization.
The strongest manifestation of the anti-globalization skepticism is the movement — for a movement it was — that brought Donald Trump to power. He vowed to bring back the industrial jobs in the rust belt (although those jobs reflect the past rather than the future of employment).
Trump also went about upsetting the global economic order, an aim his Secretary of State, Mike Pompeo, unashamedly praised at Davos (via video conference — he was not allowed to travel there because of the US government shutdown).
Trump has a point when he talks about unfair trading practices, issues around intellectual property and industrial espionage in his trade tiff with China. He actually has the backing of corporate chiefs such as Goldman Sachs’ David M. Solomon. Even George Soros, no friend of Trump, said the West needed to be wary of being left behind by the latest technological advances in China. Whoever owns the technology of the future will influence the economy of the future.
However, when Trump, Pompeo & Co. want to undermine the global trading system altogether, they are walking down a perilous road. Supply chains are so integrated that dismembering the system would harm the US economy just as much as China’s — and the world’s for that matter.
Before the financial crisis, it would have been unthinkable to discuss the merits and pitfalls of globalization, but the world has moved on since then and the globalization debate has become so mainstream that it found a platform even at Davos. This is, after all, the ultimate stage for titans of industry to engage with their political counterparts as well as selected representatives of civil society.
• Cornelia Meyer is a business consultant, macro-economist and energy expert.