The Western International Order

It seems to me…

It has been said that arguing against globalization is like arguing against the laws of gravity.” ~ Kofi Annan.

Globalization is arguably the most important factor currently shaping the world economy. Unfortunately, previously consistent long-term increases in globalization, defined as the free movement of goods, people and money across borders, appears to be slowing[i]. 2012-2013 global trade growth was less than global GDP growth throughout the world for the first time since the end of World War II.

The process of globalization has been underway for centuries but recent technological innovations in communication, transportation, and information management have accelerated its pace into a force with incredible capacity to interconnect the world in ways never previously possible. The primary effects of economic globalization probably are irreversible as the welfare of nations becomes increasingly interdependent. Globalization is the absence of imaginary walls and fences that countries had erected bringing all of us closer together and making us understand that we are all a part of a single entity living in different cultural circumstances. The effect is not restricted to just finances; it also has affected the cultural, social, psychological, and political state of the world.

Globalization brings increased employment opportunities to less developed countries as developed countries outsource jobs to them by allowing each country to do what it does best. Outsourcing can lead to resentment within the originating country when production moves to new locations as it frequently reduces employment within less efficient employment categories.

While globalization is mostly beneficial, it unfortunately primarily benefits investors and upper-level managers increasing economic inequality. There also can be rising socio-economic insecurity mainly due to the rapid transition period currently underway in many countries. Financial market instability across the globe can result in large socio-economic and human costs.

Free market theory suggests that markets will regulate themselves through the competing pressures of supply and demand and resource availability but the largest multinationals are sufficiently powerful that they are able to manipulate markets solely for their personal benefit.

In the past the U.S. always has seemed willing to consume all the world could produce but average individual income has not increased following the recession of 2009 and consumer spending remains at a reduced level, Europe remains mired in a debt crisis and will require at least five more years to recover, and emerging economies, including China, are having their own problems and experiencing significantly reduced growth rates. Global economic integration therefore has either slowed or reversed as many corporations are reconsidering their supply and production chains and possibly returning them to their home country. 21 percent of U.S. manufacturing firms with sales of $1 billion or more are re-shoring and 54 percent are actively reconsidering it[ii].

The current international economic system of commerce and trade has resulted not only in economic growth but also significant armed conflict reductions. It is possible for this stability, sometimes described as the “Western international order”, to follow one of two possible future scenarios. Asia, the location of three of the world’s four largest economies within the next decade, could either embrace today’s current open, rule-based system or, alternatively, become increasingly nationalistic, focus on narrow self-serving interests, and pursue mercantilism[iii].

Unfortunately, opposition to free-trade extensions is not only from a China motivated to pursue their own narrow interests but also from the U.S. where congressional conservatives oppose anything favored by President Obama and liberals who no longer support free trade policies. While not in the best interests of our country, conservative opposition is more understandable than that of liberals who attempt to claim they are modern, future oriented, and open but instead demonstrate the increasing influence of special interests.

Trends are disturbing as indicated by complaints to the World Trade Organization concerning protectionism, intellectual-property theft, and increased trade barriers. Global markets that have been converging for the last thirty years are starting to be diverging along national and sectional lines. The expectation is for increased economic volatility in coming years.

That’s what I think, what about you?

[i] Foroohar, Rana. Globalization In Reverse, Time, 7 April 2014, p28.

[ii] Boston Consulting Group. More Than a Third of Large Manufacturers Are Considering Reshoring from China to the U.S., http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-104216, 20 April 2012.

[iii] Zakaria, Fareed. Time To Put Trade Above Politics, Time, 3 March 2014, p24.

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About lewbornmann

Lewis J. Bornmann has his doctorate in Computer Science. He became a volunteer for the American Red Cross following his retirement from teaching Computer Science, Mathematics, and Information Systems, at Mesa State College in Grand Junction, CO. He previously was on the staff at the University of Wisconsin-Madison campus, Stanford University, and several other universities. Dr. Bornmann has provided emergency assistance in areas devastated by hurricanes, floods, and wildfires. He has responded to emergencies on local Disaster Action Teams (DAT), assisted with Services to Armed Forces (SAF), and taught Disaster Services classes and Health & Safety classes. He and his wife, Barb, are certified operators of the American Red Cross Emergency Communications Response Vehicle (ECRV), a self-contained unit capable of providing satellite-based communications and technology-related assistance at disaster sites. He served on the governing board of a large international professional organization (ACM), was chair of a committee overseeing several hundred worldwide volunteer chapters, helped organize large international conferences, served on numerous technical committees, and presented technical papers at numerous symposiums and conferences. He has numerous Who’s Who citations for his technical and professional contributions and many years of management experience with major corporations including General Electric, Boeing, and as an independent contractor. He was a principal contributor on numerous large technology-related development projects, including having written the Systems Concepts for NASA’s largest supercomputing system at the Ames Research Center in Silicon Valley. With over 40 years of experience in scientific and commercial computer systems management and development, he worked on a wide variety of computer-related systems from small single embedded microprocessor based applications to some of the largest distributed heterogeneous supercomputing systems ever planned.
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2 Responses to The Western International Order

  1. berlioz1935 says:

    You write, “globalization, defined as the free movement of goods, people and money across borders.”

    In reality it seems, it does not work for the movement of people. The US and the EU want to slow down the flood of people who want to partake in the prosperity. Australia, too, is shamelessly exploiting xenophobia for political ends.

    In Germany a recent report shows that German society has a net gain from immigration. Still people believe new comers are a burden on the public purse.

    If people can’t cross borders as finance and business can it is not really a free market.
    This notion of “free market” is a selective one and in the eye of the beholder.

    • lewbornmann says:

      I’m not sure if I previously responded to your comments so please excuse me if this is a repeat….

      =======================================================

      As in all disagreements, there usually are two sides (and frequently even more) to any story.
      Unfortunately, this xenophobic response to immigration seems to be increasing in most of the advanced nations. It is not only in your country and the U.S., look at the recent election results throughout much of Europe. In almost every country, the party experiencing the largest percent increase in representation opposes immigration.

      Like most Americans, I am the descendent of immigrants. My paternal great-great-grandfather probably would be considered an illegal immigrant: he was with the Hessian military sent here to fight against the American Revolutionary Army. My maternal grandparents were recruited in Slovenia to work in the Pennsylvania coalmines. They never learned how to speak English (and probably never became U.S. citizens).

      While sympathetic to the plight of those seeking to escape the poverty prevalent in their native country for the promise of a better life here, I accept the necessity for them to abide by our immigration laws and apply to enter the country legally. That is how the majority of immigrants entered our country in the last 100 years (our first restrictive immigration law was passed in 1917).

      Yes, it is necessary to prevent terrorists, narcotic traffickers… from entering our country but refugees, especially unaccompanied children, are a different story entirely – and one rightwing extremists do not want to acknowledge. Refugees have a legal status set forth under a Geneva Convention agreed to by the U.S. and most other nations. The majority of these children do NOT attempt to enter the country illegally, they turn themselves in to the border patrol. I will not reiterate what these children are subjected to (some of it is in my blog) but it is difficult to imagine what it would take to make a child of twelve so desperate they would leave everyone and everything they know and travel 1200 miles just to improve their probability of not being murdered.

      Recent polls show that 72 percent of U.S. citizens approve of undocumented workers being given green cards or citizenship. No, the U.S. is not yet locking refugees on an island but conservatives are demanding everyone be returned home without any effort to determine their legal status. For some of these refugees, your island might be preferable.

      Where is the human compassion of those that unequivocally demand they be sent back to their homeland? How can these people claim to be Christians? Perhaps those U.S. citizens demanding we lock the gate now that they are here should ask themselves what Jesus would think of how they treat the poor, the weak, the desperate… Where is their shame?

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