The crisis of globalisation 

The crisis of globalisation 

Context

Today’s so-called crisis of  globalization is nothing more than a new variable of the old battle between protectionism and free trade. On the one hand it is the tribalists while on the other it is the globalists. On one side there are the anti-Amazon, pro-retailers, losers of a global challenge, while on the other, there are the pro-Amazon, e-commerce winners.

Even as leaders tap into discontent, there won’t be any promised return to the past

The opening of trade walls has accelerated industrial evolution in such a way that workers have had to learn to adapt to almost every generation.

Accelerated Evolution?

The difference, today, is that the evolution didn’t happen within a lifetime, but a few times within that lifetime. This is why the Indian farmer, who initially moved to the city to work in a call centre, had to reinvent himself as an Uber driver and is now worried about driverless cars — all within one lifetime.

Cause of discontent

Technological innovations are what accelerate the rhythm of change.

It is the transformation of technology that affects society, not whatever that technology delivers (news, electricity, TV series)

Living in the past

And this is why in the United States and the United Kingdom and in some parts of Europe, so many 50-somethings, unemployed, disgruntled voters who found it hard to reinvent themselves ended up voting for someone who promised to bring back an impossible past — a greater America, a more British Britain, whatever that may mean.

Too many evolutionary shifts

• Up until 20 to 30 years ago, you could reach your pension age before a new radical evolution in the job market, which created its winners and losers
• Today, the challenge is that evolutionary shifts happen not just once before reaching pensionable age, but often.
• This is what causes globalisation’s discontent

Silicon valley out of reach

Blue collar workers from the mid-West cannot move to Silicon Valley; it’s a totally different skill set, and only few can manage it.

A sort of revenge

• S. President Donald Trump’s and Brexit’s victories can be seen as a sort of “revenge of the losers”
• The victims of the system described above decided to vote for someone who promised to protect them

But Little has been done

Little has been done by Mr. Trump or British Prime Minister Theresa May to help those workers. And little is being done. Their standards of living have not improved. Or have certainly not returned to previous levels. Nor is there any policy in motion indicating that the previous levels will return.

No Jobs for the unskilled

There won’t be any promised return to the past. Which doesn’t mean the economy will not thrive. It just won’t bring back the same old jobs to the unskilled.

The US tax reform

For example, the latest U.S. tax reform promises to lower corporate taxes, rehashing the ancient myth job, the “trickle down” theory, will not impact the lower middle classes who voted for Mr. Trump

Global Impact

How will this impact free trade globally? U.S. manufacturing is down to 11.7% of U.S. GDP (2016), while farming agriculture is only 1% (2015)

America produces services such as Amazon, Google and Facebook; these are the richest corporations. Their expansion is thriving globally. And so is the expansion of other multinational corporations.

Conclusion

Even though the discontent of globalisation is a leftover of the crisis of 2008, today we don’t see that it will really impact globalisation seriously. At least, so far, we don’t see the results of this desire to raise barriers. Globalisation is here to stay.