Globalization has failed us

COVID-19 is the straw that broke the camel’s back. If you’ve been looking at what’s been happening to the global economy over the past 20 years, there have been many warning signs suggesting that the model is flawed. If globalization were a military campaign, we would describe it as being guilty of mission creep.

What we mean by globalization has rapidly changed over the past 20 or 30 years. Originally globalization was largely associated with free trade, trade of finished goods. That’s certainly the way it was in the pre-First World War period. In more recent years, it has expanded in a much more destructive direction. We had the globalization of capital in the 1980s and ’90s, which gave us our first warning signal with the Asian financial crisis in 1997-98. But that warning sign was ignored and we quickly went to the globalization of labour.

A number of companies began to take advantage of this liberalized capital and industrialization to offshore a considerable amount of their manufacturing facilities, notably in the United States. This facilitated a globalization of labour, which had two effects. It led to very significant rises of inequality in most of the developed economies and significant declines in living standards for many Western workers. We had the rise of the so-called precariat, which are people with no income security, no employee benefits.

All of this was facilitated by the fact that if these workers didn’t accede to these lower labour standards, the jobs could easily be moved offshore. I don’t think that it’s any accident that during these high watermarks of globalization we saw the rise of Brexit and the ascension of Donald Trump to the presidency. I think he became the voice for an increasing number of Americans who count themselves among the biggest losers of globalization.

Every four years, we have an election in the United States and there’s always the promise to do something for them, but nothing ever happens. They are dismissed as what the economists like to call a negative externality of free trade, which to me sounds a little bit like what the military describes as collateral damage when one of their bombing missions goes astray and they accidentally kill a bunch of civilians rather than a military target.

During COVID-19, global supply chains have become vectors of contagion and have disrupted our capacity to provide necessary protective equipment to help our populations cope. I think globalization has also contributed to environmental degradation, which is another symptom of which pandemic is a part. Localized farming has been replaced by globalized industrialized farming. Logging and the exploration for minerals and fossil fuels for the global economy have decimated forests. Humans have moved into formerly remote areas and close to pathogens, which have been in wildlife for generations. COVID-19 is one of those new pathogens, which shows as nature striking back.

So, it’s hard for globalization advocates to claim success given this multiplicity of pathologies that I’ve described.