Tuesday, August 05, 2008

The End of Globalization?

Are we seeing the beginning of the end of globalization?

I have been thinking on this for some months, as oil prices continue to rise and the cheap transportation that has facilitated globalization goes away. I am teaching a history of globalization course this fall and I am thinking of ending the course with a discussion of this. You might say that I should know what I ending the course with since class starts in 3 weeks, but that's another issue.

It's quite a thing to suggest that globalization is ending. Although anti-globalization activists have made a lot of good points, you have a hard time finding people who reject globalization outright. Who has not enjoyed cheap travel? Who does not like getting tropical fruit, balsamic vinegar, extra virgin olive oil, Thai food, etc.? Remember, none of these things were readily available in supermarkets 25 years ago. Who does not want to be able to connect with people around the world through the internet? These are all key aspects of globalization and are all positive things. McDonald's and Wal-Mart and the homogenization of the world are bad things, no doubt. But Americans at least have benefited from the globalization in profound ways.

The beginning of Larry Rohter's excellent Times article from a couple of days ago on how higher transportation costs is beginning to affect our global society is I think quite telling

When Tesla Motors, a pioneer in electric-powered cars, set out to make a luxury roadster for the American market, it had the global supply chain in mind. Tesla planned to manufacture 1,000-pound battery packs in Thailand, ship them to Britain for installation, then bring the mostly assembled cars back to the United States.

But when it began production this spring, the company decided to make the batteries and assemble the cars near its home base in California, cutting more than 5,000 miles from the shipping bill for each vehicle.

I know that oil prices are down right now, but they aren't going to fall forever. Demand remains high for petroleum. Ultimately, high oil prices will continue to plague us, forcing Tesla Motors and other companies to make things closer to home.

Let's think about how expensive oil changes the globalization equation. First of all, it may mean that the trend of deindustrialization in the United States reverses itself. Perhaps this seems far-fetched in the face of GM's latest plant closings. But once it becomes economical again to manufacture items at home, we are likely to see factories again spring up. How does this then affect the developing world? Does it continue to develop? If manufacturing jobs aren't going to Cambodia or Honduras anymore, do those nations fall further into poverty? Or do they change their production for the local market, building localized economies that succeed because money was made through an earlier globalized economy? On the local front, do unions make a big comeback because both labor and capital will be less spatially flexible? Will US unions also be able to make big inroads in Mexico, since the border will be the one place where transnational manufacturing will still make sense?

Our eating habits are changing too. The rise of locally grown food is an important step, not only for our health but as a response to globalization. Rohter asks if we will still eat avocado salad in January? I have long asked almost the exact same question, though I tend to use lettuce as my example. It just isn't going to make sense to import tomatoes from Chile unless the cost of transportation remains extremely low. What does this mean for the consumer? We are going to have to change our diets to reflect seasonal variations. The winter and early spring might be pretty bland times for eating because potatoes and carrots are going to be what's available. Canning, freezing, and other ways of preserving vegetables may become common again. On the other hand, when asparagus, avocados, and tomatoes come into season, it is going to be a wonderful thing. We will really appreciate the miracles that are these foods instead of taking them fore granted as we do now, when we simply expect to find any vegetable we want when we walk into the grocery store.

The decline of globalization also affects travel. It has recently been suggested that air travel is again becoming a luxury for the rich. Any perusal of plane tickets is evidence for the potential truth of this statement. I don't think the world needs Americans with even less knowledge of the rest of the world, but we are quite possibly going to see it. More isolation means more cultural preservation, but it also means sharing less of what is good about other cultures. It might also mean different spatial settlement patterns within the United States. So often today, families live far apart from each other, comfortable with the knowledge that they can fly and see each other a few times a year. If this is not possible, will people live closer together again and if so, how will that affect economic development?

There are so many other questions to ask about how the decline of globalization will affect the world. Will poor people have access to new medicines that are developed in the first world? Will family planning continue to grow around the world? Will women see their rights grow or regress? Will people have to return to farming and how will this affect the world's remaining forests? Will we see a bigger income gap as the world's rich can consume with abandon but with an increasingly larger number of people in each nation unable to partake in the remnants of our global society?

I expect to write more about these topics as the fall goes on since I will be dealing with them in my class. I really wonder if we have reached the closing of an epoch in human history, one that has lasted since at least 1492. For over 500 years, globalization has been a major force in the world and has expanded at a consistent, but ever increasing pace. Maybe this is the end.