Globalization at the Crossroads
Globalization,
one of the most talked-about terms of the last 15 years, is neither new
to our generation nor is its progression assured, Carl Strikwerda,
professor of history and dean of arts and sciences at the College, told
a Christopher Wren Association audience last semester.
Globalization neither new nor inevitable
While recognizing that critics of globalization argue that it spreads inequality, destroys the environment and hurts workers in developed countries, Strikwerda called globalization, "on balance," a "good thing." He suggested that the economic development spurred by increasing cooperation among global entities is the "one tool we have to lower poverty around the world." He added that globalization leads, albeit slowly, toward peace by encouraging the development of democracies. "Democracy is one of the few means we have that we know leads to less conflict among nations," he said.
1875 to 1914: A previous round
There are facets of the present spate of globalization that are new, Strikwerda said, pointing out that countries in Asia and Latin America are generating economic activity today and are not primarily objects of Western investment, as they were prior to 1914. In certain ways, however, the world was more globalized during the late 19th-century, he argued. "We still do not have the freedom of movement that many people in the world possessed at that time," he said. "By 1914, much of the globe was becoming a single labor market. The stability of the world financial markets before 1914 that depended on the British pound, backed by gold, is something we lack today."
During the period roughly from 1875 to 1914, globalization was facilitated by breakthroughs in technology and transportation that led to the creation of organizations and agreements, including postal unions and communications treaties, that still operate. "Everything we have today in aviation, international property rights, and even the Internet is built on the foundation of international cooperation that was laid over a century ago," he said. The period ended abruptly as pre-World War I developments undermined economic and political stabilities. The failure of globalization to reassert itself during the 1920s was due to several factors, including the facts that the British pound became too weak to play a stabilizing role and that countries employed protective tariffs and quotas that stifled international trade. At one point, Strikwerda called "international cooperation" one of the "most important casualties" of the post-war era.
"When the Great Depression hit, every country tried to save itself, and the world economy virtually collapsed," Strikwerda said.
As the process unfolds
Strikwerda predicted that as long as technological innovations lower costs and raise efficiencies, there will be pressure to carry the benefits of these changes to countries that have not yet experienced them. He identified several issues to watch for in terms of their utility as conduits of globalization, including the ongoing integration of the economies of China and India with those of the developed world, the increasing openness to international trade and the acceptance of migrants. Concerning international trade, he said, "Trade barriers are like weeds. They will always be there, but if you stop fighting them, they just get worse." About migration, he said, "[It] not only lowers unemployment in the sending country, it creates economic development in the country that sends the migrants." He pointed out that "remittances"-money sent by immigrants back to their home countries-represent the second largest item in terms of international trade, second to oil.
Of the pressures that work against globalization, wars and political instabilities often are unpredictable, Strikwerda said. Others involve cultural and social barriers that can be understood and addressed. He listed the struggles in globalizing economies to enact health, safety and social-welfare policies among the forces with the potential to halt globalization.
"One can make a powerful argument that what destroyed globalization before the First World War was a backlash against it by groups that believed they had less to gain from it than they had to lose," Strikwerda said. "We should not make the same mistake again. Economic growth is not an end in itself. Economic growth has to lead to greater social welfare, or societies will not support the creative chaos that capitalism inevitably brings in its wake."
