Home » Posts tagged 'Globalization'
Tag Archives: Globalization
Geopolitics: Are We Ready for Globalization v2.0?
“If humanity proves unequal to the moment, it will inaugurate an era of irreversible and potentially uncontrollable global crises.” — Joschka Fischer, The End of Contemporary History, writing in Project Syndicate
Geopolitics on planet Earth are at a crossroads — and some recognize that fact for what it is, some don’t recognize that’s where we’re at, while others who should know better won’t admit that we’re at the crossroads and that the time is past where we should’ve chosen a new path.
Realistically, there’s only one path!
(There is another path, the path of status quo leading to nuclear Armageddon, which path is too stupid to contemplate. So let’s not waste time discussing that path)
And the realistic way forward is to learn from history, where we went from feudal city-states, to nation-building, to empire-building, and onward to multilateralism on the governance side and globalization on the economic side.
The Next Logical Step is to keep multilateralism (that part is working) and replace globalization with interdependence — a process already occurring in diverse places and at an uneven rate of change.
Globalization is the (mostly) unrestricted pursuit of a country’s economic goals, expressed through their domestic corporate environment, and it’s been a (mostly) fine thing.
The leaders of countries that saw this period for what it was in the early 1970’s took advantage of the moment to dramatically improve their economic standing: Japan (following the Arab Oil Embargo of 1974) Germany (since everyone began loving Mercedes Benz and BMW cars in earnest) and to Taiwan (since PC computers arrived because that’s where the majority of computer chips were made and continue to be made) and China (since every consumer loves the lower price of goods made in China) and all of it has been massively good for the global economy, ushering in an era of unparalleled economic growth across the world.
Other countries played their cards smartly — like Sweden which added a thriving defense export component to its economy, Norway which moved to simultaneously exploit its undersea resources / legislate high taxes on resource extraction / improve every social progress marker in the country / and thereby became the Happiest Country on Earth according to the UN Happiness Index (and also ranks very highly on the Social Progress Index, socialprogress.org) the OPEC countries, and the fascinatingly successful South Korean economy.
A hearty “WELL DONE!” to the leaders of all those countries — who took stock of the global situation as it then existed, researched the potential opportunities for their countries based on their available resources, and then worked very hard to maximize opportunities for their country’s industries.
An historic leap forward for those countries whose leaders were smart enough to seize the (then-present) moment.
Alas, the moment is gone, or at least, receding.
But something will replace it. Something always has, and always will. Because if it doesn’t, it’s human nature that our default mode is regression — and waiting at the end of that process will be nuclear annihilation and the ‘grey goo’ aftermath.
The Next Logical Step, “Interdependence” is on the horizon — and the best example also happens to be the least likely example — that of Russia and Ukraine combining forces to ship corn (this week) and wheat (next week) and probably sunflower seeds (the following week) and on and on, until the end of time. Let’s hope!
Interdependence means that instead of reckless competition that works to destroy each other, allowing their mutual competitors to utilize a ‘divide and conquer’ strategy to injure or destroy both — arrangements are made that when Russia ‘wins’, Ukraine ‘wins’ also. And vice-versa.
When a Turkish bulk carrier ship arrives in Odesa, Ukraine at the request of Russia, Ukraine and Turkey, to load corn that is sourced from Russia AND Ukraine — and both Russian and (hopefully, one day) Ukrainian naval ships ‘shadow’ that Turkish ship to ensure its safe passage across the Black Sea onto Turkey and then Lebanon — then we know it’s in each party’s best interest for that shipment to arrive safely in Beirut’s port.
Arranging things carefully means it becomes important to Russia that the shipment arrives in Beirut, it becomes important to Ukraine that the shipment arrives in Beirut, and because Turkey facilitated and supported this agreement it’s important to Turkey that the shipment arrives safely — then we have true Globalization v.2.0 — which I call “Interdependence”.
I can’t stress it enough: The countries that move quickly to Interdependence will outperform countries that don’t.
Remember the lesson of countries that enthusiastically embraced globalization in the early days — which advanced their economies by orders of magnitude — Japan, Germany, Taiwan, China, Sweden, Norway, the OPEC countries and South Korea have never regretted making globalization a priority.
So too, will be the countries that embrace Interdependence, carefully arranging every single thing they do, to the point that every operation becomes a ‘Win-Win’ operation for as many sides as are foresighted enough to participate.
The way to prove ourselves ‘equal to this moment in history’ is to embrace Interdependence and to utilize ‘Win-Win’ thinking as the vehicle to get us to our respective economic and social progress index goals.
Written by: John Brian Shannon
Will Theresa May and Donald Trump Meet the Existential Challenge of Our Time?
by John Brian Shannon | January 23, 2017
UK Prime Minister Theresa May has been invited to the White House on January 27 to meet with the new American president, Donald J. Trump.
It’s always an honour to be the first invitee of the new president, and the timing couldn’t be better as the Western economic order is beginning to churn.
In the West, the past 70 years have been a relatively stable era with increasing wealth (although since the Reagan-era tax cuts, obscene inequality has become a destabilizing force) and social mobility has increased dramatically since the creation of the internet.
This combination could prove extraordinarily useful to motivate leaders to provide the kind of leadership required of the times — or 2017 could prove to be the pivotal moment in the unravelling of the Western democracies.
President Trump wasn’t elected U.S. president because American citizens were bored by the Democrats.
Americans voted Trump/Pence to overthrow the existing plutocracy in Washington, not to overthrow foreign governments.
Regardless how many Middle Eastern conflicts the West prosecuted over the past 13 years, the rich keep getting richer and the poor keep getting poorer. But this time the problems are here at home, not in some faraway country.
Americans voted for Barack Obama (2008 and 2012) and now Donald J. Trump (2016) in large part to stop the unfolding economic disaster in the West. Britons may have held similar ideas to American voters about a sustainable economic plan when they voted for Brexit.
Will Prime Minister of Britain Theresa May and President of the United States Donald Trump work together to solve the existential challenge of our time? Image displays the share of the world’s total wealth for the Top 1% vs. the Bottom 99%. Image courtesy of OXFAM.
The chart below (from 2010) reveals the bottom 80 percent of Americans share just 7 percent of the nation’s wealth, but it’s much worse now (in 2017) and this phenomenon is no longer confined to the United States.
Britain must work with the United States to roll back record inequality that will eventually destroy the entire middle class. You can see the bottom 80% compete for only 7% of America’s total wealth. (This image is from 2010. It’s actually much worse now)
That trend will not change until politicians are bigger than the challenges that confront them, and actually do something about the record inequality sweeping the West.
It’s not a call to ‘do something, anything, anything at all’ — as some so-called ‘solutions’ might be worse than the problem.
But what citizens of the Western nations require is an acknowledgement by politicians of the sheer scale of the problem, and some initial steps to slow the rapid transfer of wealth away from the bottom three quintiles to the top 1 percent. (Even tiny baby-steps are preferable to the decades-long stony silence on the matter)
Britain and the United States must ensure that globalization and free trade work for everyone. Image courtesy of the New York Times, You can’t feed a family with GDP by Neil Irwin.
Inequality ignored, will only result in citizens ‘giving up’ on their governments and ‘giving up’ on democracy — and we know how that will end. Badly. For everyone.
Including powerful politicians who serve for amazingly short stints of time in office. Once you’re in politics, four years pass by like a long summer!
Today’s toxic combination of ultra-low taxes on the rich and unrestricted globalization aren’t working for 3/5ths of the population. In 10 years, it won’t be working for 4/5ths of the population. And let’s remember, all of them are voters.
Here’s how that looks
In 2016, more than 50 percent of the world’s wealth was owned by the 1 percent.
By 2030, more than 70 percent of the world’s wealth will be owned by the 1 percent.
By 2045, more than 85 percent of the world’s wealth will be owned by the 1 percent.
Put another way; Do you really want to live in a world where 8 billion people are fighting over the then-remaining 30 percent of the world’s wealth?
Can you imagine what it’s going to look like in 2045 when 9 billion people are fighting over the then-remaining 15 percent of the world’s wealth?
At that time, you’d better be living on an island in the mid-Pacific that doesn’t appear on any map, in a castle with 100-metre high concrete walls.
I respectfully suggest to Prime Minister Theresa May and President Donald Trump that if inequality isn’t addressed this year, it’ll be too late. Just look for a remote island in the Pacific Ocean… now, before the rush begins.
The time involved in getting new legislation passed, combined with the lag time involved for it to take effect during the following fiscal cycle, is years from the day it is first discussed.
Therefore, let’s hope that January 27, 2017 will come to be known as ‘the day the decline of the bottom-three quintiles was halted and reversed’ by these two great leaders.
Brexit, and now, Trump. What’s driving voters to reject the status quo?
by John Brian Shannon | November 14, 2016
After eight years of competent and relaxed rule by President Barack Obama, real estate tycoon Donald Trump arrived on the scene and swept Democrats and other Republicans aside to win the presidency of the United States. So obviously a protest vote — but a protest against what?
Pollsters and so-called ‘elites’ seem astonished at the Trump victory yet many saw it coming from afar. How is it that some people ‘never saw it coming’ while others saw it as a logical progression of the present societal moment?
The U.S.A. has a total population of 325 million people (November 2016) and when we look at the demographics of the country by quintiles, we see that there are five groups of 65 million people.
Each group is ‘one quintile’. The ‘top quintile’ are those who are the top income earners in the country, while the ‘bottom quintile’ are the lowest income earners in the country, etc.
The so-called ‘elites’ live in sumptuous luxury that few can imagine and tend to have stable lives which is a direct consequence of their high income levels and (usually) higher level of education.
Ninety-four percent of the people who live in the top-two quintiles are children of parents who also lived in the top-two quintiles.
(Yes Virginia, wealth is largely inherited and many studies attest to this — the myth of ‘work hard and you’ll get ahead’ represents only six-percent of the top-two quintile population in Western nations)
The bottom-three quintiles in America have been losing ground since the 1970’s when one person (the ‘breadwinner’ of the family) was able to earn enough to support a family, buy a reasonable home, and a new car every 2-3 years without needing to finance the purchase, take one vacation per year, and send their kids to college. All on the strength of one income-earner!
Nowadays, the bottom quintiles are barely working, many of their jobs off-shored to Asia. For those fortunate enough to have a job, it takes two income-earners to rent or buy a condo, buying a car means financing it for up to 8-years, and one ‘staycation’ per year (staying near home during vacations, with only daytrips to nearby sights) while their kids must obtain expensive student loans that can take decades to pay off.
It’s a different world from the 1960’s and 1970’s.
The major reason for this is the Reagan-era tax cuts that were designed to stimulate growth and investment in the U.S. economy (which were the right prescription for the times) and those tax cuts created a record number of billionaires — which eventually resulted in the creation of the so-called ‘1 percent’ who now invest their money in the ‘Asian Tiger’ economies which bring better financial rewards for those investors, but results in the off-shoring of millions of jobs in the Western nations.
At present, the 1 percent own more than 50% of the world’s total wealth. Leaving less than one-half of the world’s wealth for the remaining 7.3 billion people.
But by 2030, the 1 percent will own more than 75% of the world’s total wealth. Leaving only one-quarter of the world’s wealth for the (then) 8 billion people on the Earth.
And in 2040, the 1 percent will own more than 85% of the world’s total wealth. Leaving only one-sixth of the world’s wealth for the (then) 8.75 billion people to fight over.
World Wars have been waged over less!
Brexit, and now, Trump. Share of the world’s total wealth for the Top 1 percent and the Bottom 99 percent. Image courtesy of OXFAM.
People wrongly blame ‘Globalization’ for this sorry state of affairs but it was a profound change in U.S. tax laws that allowed wealth to flow upward to the 1 percent who simply take their money and invest it in Asia. It represents trillions of dollars (U.S. and Canada) and trillions of euros (EU) and hundreds of billions of pounds sterling that will never, ever, return. It’s money that has left the West forever.
And some people wonder why things like Brexit and the stunning repudiation of the status quo candidate in the U.S.A. (Hillary Clinton) have occurred? Really? Are you kidding me?
Politicians and so-called ‘elites’ who didn’t see this coming have no business leading nations, nor should they be calling themselves ‘elites’ — nor have they ever spent a minute talking with a member of the bottom three quintiles in any Western nation.
In democratic societies ‘The People’ are always right. Some 52% of Britons voted to leave the EU, hoping for a better democracy and a better economy, while in the U.S.A. millions of voters chose hope over the status quo.
Upcoming elections in Italy, the Netherlands, France, and other Western nations are likely to show similar results.
It’s startlingly clear. ‘The People’ aren’t looking for more of the same. They voted for real change — not talk about change!
Politicians like PM Theresa May and President-elect Donald Trump have garnered a huge mandate for change. For politicians, it doesn’t get any better than this. Whatever these politicians do as long as it looks like they’re attempting to meet the needs of ‘The People’ they will be generously rewarded for their successes and easily forgiven if a particular policy fails to meet expectations.
It’s a time of unprecedented opportunity for politicians who’ve upset status quo candidates, but failure to deliver meaningful change now will bring us uncomfortably close to a total breakdown of the social contract that has worked so well for citizens and governments in the postwar era.
For those politicians elected to bring change, but who subsequently fail to do so, will find themselves losing landslide elections four years on — while bringing the wrath of ‘The People’ against ‘The Establishment’.
Let us do our part to make it easy for newly-elected politicians to do the right thing, and to forgive them easily if perchance some minor policy point goes awry.
We all need to do our part to assist the change that must now occur — otherwise, by 2040, some 8.5 billion people will be fighting over 15% of the world’s total wealth — resulting in an apocalypse worse than anything we’ve yet seen.
Letter to Britain 