“Rejecting globalisation was like rejecting the sunrise.” This is what American journalist George Packer had to say about the ready flow of goods, services, capital and labour between countries in the 1990s. Like the rising and setting of the sun, globalisation seemed inevitable.
The last decade has turned this argument on its head. Politically, we’ve seen Britain’s decision to leave the European Union over concerns of national sovereignty, the economically ‘left behind’ and immigration, and Donald Trump’s call for “Americanism, not globalism” during his presidency. Even those in favour of free trade are unsure of the current state of globalisation; economist Dambisa Moyo asks us to consider the “significant losses” it has caused.
So why is globalisation facing so much criticism – and why now?
What is globalisation?
Globalisation is a term used to describe “the increasing worldwide integration of economic, cultural, political, religious and social systems.” It spans many walks of life – so much so that The Guardian describes it as “notoriously imprecise”.
Having said this, it’s often used in an economic sense to describe the spread of financial products, goods, technology, information and jobs across national borders and cultures. Although coined in a Harvard Business Review article in the 80s and is a modern term, the concept itself has its roots as far back as the ancient paths of the Silk Road, linking trade between Rome and China in the 2nd Century BCE.
The aftermath of the first and second world war – one of the most turbulent times in modern history – brought about multinational organisations, agreements and trade in order to stabilise the world markets and bring the world back to order. And for decades since, companies have seen the benefits of globalisation: expanded customer bases, diversified revenue streams, access to resources and (contentiously) cheaper labour. Low-income countries also reaped the rewards with rising GDP thanks to opportunities for trade and employment.
Director of the McKinsey Global Institute Olivia White finds that “every region in the world depends on another significant region for at least 25% of a flow it values most.” China imports its minerals from Brazil or South Africa; Europe (previously) imported 50% of its energy from Russia; and the US and Europe are significant exporters of data and IP.
We only have to look at the rapid spread of Covid, followed by the successful development and deployment of vaccines, as proof for the interconnectedness of our world.
What is anti-globalisation?
Criticism towards globalisation emerged at the turn of the millennium. People worldwide were beginning to wonder whether a more interconnected world actually made their lives better. This came to a head in November 1999, when the World Trade Organization meetings convened in Seattle. The delegates were supposed to meet to discuss furthering the integration of the world’s economies through reductions in trade barriers, however this was met by a series of protests amassing 40,000 people. They protested for the human rights and environmental failures of globalisation, and wariness towards the WTO policies on free trade.
People worldwide were beginning to wonder whether a more interconnected world actually made their lives better.
So now, two global financial crises, a global pandemic, war in Europe, tensions between the United States and China – as well as rising questions towards the ethics of globalisation – has continued to spur opposition to the concept, in a movement called ‘anti-globalisation’.
Ironically, digital news (which is a mass component in creating a more interconnected world) is also a huge disseminator of anti-globalist rhetoric. What has made anti-globalisation so alluring is that it doesn’t just encompass one ideology – it spans climate change, wealth disparity, the protection of jobs, labour activism and more.
What are globalisation’s main criticisms?
Many of globalisation’s criticisms have been raised by economist Dani Rodrik in The Globalisation Paradox, where he sets out the perils of unfettered financial globalisation. These include:
- Exploitation of labour. Globalisation has increased companies outsourcing their work to other countries where the cost of labour is often cheaper. But this has led to harsh questioning of the exploitation of foreign workers; writer and activist Van Badham says that we have “watched globalisation’s exploitation stories play out for decades”.
- Wealth distribution. International bank Standard Chartered have acknowledged that while globalisation has lifted many out of poverty, it has also contributed to “unevenly distributed gains that have trapped individuals and countries in a downward cycle”.
- Environmental impact. Globalisation has led to more goods being produced and raw materials being traded – thus more carbon emissions emitted through travel and production.
- Cultural homogenisation. Cultural homogenisation is a big concern for a more globalised world, in how mass-produced goods may engulf local commerce and dilute cultural distinctiveness.
- Outsourcing of labour. Some argue that the outsourcing of labour reduces job prospects in their own country, as the European Union acknowledges that this predominantly affects low-skilled industries.
Does anti-globalisation seek self-sufficiency?
Larry Elliott at The Guardian argues that sprawled-out supply chains that have come about from globalisation have been ‘gummed up’ by war and post-pandemic shockwaves. This has moved forward the pursuit of self-sufficiency and less globalist ideals: “be it in food, fuel, personal protective equipment or Covid-19 drugs.”
For companies, globalisation also carries with it similar supply chain risks. For example, the global reliance on Taiwan for semiconductors – which power our trains, ATMs and even the internet – was threatened by Covid-19, and multinational companies rightly fear what may happen to them if China were to invade Taiwan.
Where does globalisation go from here?
We’re now at a time in history where globalisation is plateauing: “the flows of goods, the real tangible stuff, have levelled off after nearly 20-plus years of growing at twice the rate of GDP” according to White, or to give it yet another buzzword, “slowbalisation”.
At this juncture, large organisations are taking up the mantle of considering their global footprint and impact. Therefore, the question on leaders’ minds may become “how” to globalise, rather than “if”.
The Globalization Paradox: Democracy and the Future of the World Economy – Dani Rodrik
Globalisation: the rise and fall of an idea that swept the world – The Guardian
How our interconnected world is changing – McKinsey
Against the World — a panoramic history of anti-globalisation – Financial Times