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Columbus Day 2018

October 8, 2018


Columbus Day is a U.S. federal holiday commemorating the date when Christopher Columbus first set foot in the Americas. Because Columbus and colonization remain controversial subjects, Columbus Day is not as widely celebrated as other U.S. holidays. According the Old Farmers’ Almanac, the first U.S. celebration of Columbus’ landing on 12 October 1492 took place some 300 years later (1792) “by the Columbian Order (Society of St. Tammany) in New York City.”[1] The Almanac goes on to note, “In 1937, the occasion was declared a national holiday by President Franklin D. Roosevelt. Columbus Day has been observed on the second Monday of October since 1971. Many celebrate Italian-American heritage on this day. The observance of Columbus Day is not without controversy. European exploration brought disease and devastation to the lives of the indigenous people of the Americas. Some areas of the United States choose to honor Native American culture on this day instead [referring to the holiday] as Indigenous Peoples’ Day.”


Exploration and the beginning of globalization


Although the motives for and often catastrophic results of exploration are often discussed, global exploration was and remains inevitable. The Farmers’ Almanac notes Columbus Day epitomizes “the thirst for adventure, exploration, and possibilities” that characterizes the human spirit. Many early explorers were looking for a shorter route connecting Asia to Europe. They didn’t know two oceans and two continents lay in between. The age of exploration quickly succumbed to the age of colonialism. Colonialism is marked by the exploitation of weaker countries by stronger nations. As the colonial system unraveled, former colonial states faced various struggles to remain viable; especially those whose borders had been artificially established by colonial powers. Over time new international relationships were developed and new trading patterns established. For decades, the Cold War played an important role in how the international economic system functioned. The Cold War ended about the same time e-commerce was gaining a foothold along with a new era of globalization. Looking back on the rise of globalization, Jeffrey Rothfeder (@jrothfeder) noted proponents of globalization predicted it would “act like a rising tide, lifting all boats in poor and rich countries alike. Buoyed by hundreds of thousands of new assembly line jobs courtesy of multinationals in emerging nations, the middle class would swell, which in turn would propel higher local consumption. More factories would be needed to meet the demand, further raising local standards of living and handing the largest non-domestic companies a vast and enthusiastic new customer base.”[2] Hindsight shows us the effects of globalization have been mixed giving rise to populist politics now threatening to unravel the global economic system.


David Hunt, Chief Executive Officer of PGIM, notes, “As this tug of war between globalization and nationalism plays out, the world could broadly evolve in three distinct directions. One scenario would see multilateralism driven back and a return to a country-dominated system — with companies retreating to their home markets and international trade declining sharply. This would give back many of the gains from global integration over the past 40 years but could have political appeal. In a second scenario, we could see a leveling out of globalization: the 1990s and 2000s would be seen as ‘peak globalization’ and trade would stagnate but not appreciably decline. However, we strongly believe the global economy will follow a third path: one in which a new and somewhat different form of globalization will take hold.”[3] This new form of globalization, he argues, will be more regional and more suited to the Information Age. It will involve “multi-local” strategies, embrace new technology platforms, and move from manufacturing to service industries. It will be interesting to see whether he is correct about the future of globalization.


The benefits of past globalization


I will leave it to others to argue about the past injustices and future of globalization. What is clear is that the world’s poor have been faring better over the past couple of decades. Josh Zumbrun (@JoshZumbrun) reports, “The global population living in extreme poverty has fallen below 750 million for the first time since the World Bank began collecting global statistics in 1990, a decline of more than 1 billion people in the past 25 years.”[4] Despite that positive news, Justin Kuepper observes there is wide perception gap between experts and the general population when it comes to the benefits of globalization. “Most economists,” he writes, “agree that globalization provides a net benefit to individual economies around the world, by making markets more efficient, increasing competition, limiting military conflicts, and spreading wealth more equally around the world. However, the general public tends to assume that the costs associated with globalization outweigh the benefits, especially in the short-term.”[5] He concludes, “Globalization has impacted nearly every aspect of modern life and continues to be a growing force in the global economy. While there are a few drawbacks to globalization, most economists agree that it’s a force that’s both unstoppable and net beneficial to the world economy. There have always been periods of protectionism and nationalism in the past, but globalization continues to be the most widely accepted solution to ensuring consistent economic growth around the world.” In a world filled with incivility and falsehoods, we need to remind ourselves that things have been getting better. The following short video by Oxford economist Max Roser demonstrates that point.





Brookings analysts, Homi Kharas and Kristofer Hamel, write, “For the first time since agriculture-based civilization began 10,000 years ago, the majority of humankind is no longer poor or vulnerable to falling into poverty. By our calculations, just over 50 percent of the world’s population, or some 3.8 billion people, live in households with enough discretionary expenditure to be considered ‘middle class’ or ‘rich.’ About the same number of people are living in households that are poor or vulnerable to poverty. So September 2018 marks a global tipping point. After this, for the first time ever, the poor and vulnerable will no longer be a majority in the world. Barring some unfortunate global economic setback, this marks the start of a new era of a middle-class majority.”[6] Regardless of what you think about Christopher Columbus, or the legacy of explorers past, exploration is part of the human spirit and early exploration to find new trade routes were the first steps towards globalization and a global middle class. We still need explorers in every field of endeavor to help make our world a better place to live.


[1] Staff, “Columbus Day 2018,” The Old Farmers’ Almanac, 2018.
[2] Jeffrey Rothfeder, “The great unraveling of globalization,” The Washington Post, 24 April 2015.
[3] David Hunt, “Death of globalisation is greatly exaggerated,” Financial Times, 30 May 2018 (subscription required).
[4] Josh Zumbrun, “World Poverty Falls Below 750 Million, Report Says,” The Wall Street Journal, 19 September 2018 (subscription required).
[5] Justin Kuepper, “The Impact of Globalization On Economic Growth,” The Balance, 13 August 2018.
[6] Homi Kharas and Kristofer Hamel, “A global tipping point: Half the world is now middle class or wealthier,” The Brookings Institution, 27 September 2018.

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