Globalization’s Bed of Nails, Part 1: The Optimists

Stephen DeAngelis

March 20, 2013

“The globalization paradigm,” David Brooks wrote half a decade ago, “leads people to see economic development as a form of foreign policy, as a grand competition between nations and civilizations.” [“The Cognitive Age,” New York Times, 2 May 2008] Brooks believes such notions are destructive and counterproductive. He argued that we are entering “the cognitive age paradigm” which “emphasizes … specific processes that foster learning. It emphasizes that different societies are being stressed in similar ways by increased demands on human capital.” Brooks wants the people of the world to move beyond the globalization paradigm so that we can reason together to solve transnational challenges that affect us all. He explains:

“If you understand that you are living at the beginning of a cognitive age, you’re focusing on the real source of prosperity and understand that your anxiety is not being caused by a foreigner. It’s not that globalization and the skills revolution are contradictory processes. But which paradigm you embrace determines which facts and remedies you emphasize. … It’s time to move beyond [the globalization paradigm].”

In two recent posts, I discussed the concerns of a number of analysts and scholars who worry that it’s going to be difficult to move beyond the globalization paradigm because no clear model has emerged to replace it. Brooks’ cognitive age paradigm doesn’t really fit the bill because it doesn’t describe how people, organizations, and countries are going to interact in the decades ahead. It simply states that we should be smart enough to reason together. So, for a least a while, we’re probably stuck with the globalization paradigm.

 

I do agree with Brooks that it is unfortunate that the very term “globalization” now stirs deep emotions in some people. While some pundits argue that globalization has been the catalyst that has brought more people out of poverty than ever before in history, other pundits argue that it has been the catalyst that started the developed world on the road to ruin. A British blogger, who posts anonymously, recently wrote an article that provides a pretty good overview of the arguments used by optimists, pessimists, transformationalists, and transnationalists regarding globalization. [“Theories of Globalisation,” realsociology, 9 February 2013] He (or she) begins with an overview of the optimistic theories of globalization. The first argument used by globalization optimists, he writes, is that it has resulted in “more international trade” and, in increased “wealth, health, and education for most countries.” He points to the following video as evidence that the optimistic view has lots to crow about.

 

 

The second argument that the British blogger claims is being made by the optimists is “that Transnational Corporations are a force for good. Companies such as Apple, Sony, etc. bring investment and jobs to developing countries.” This argument is not quite as easy to defend as the one above. Ethical companies have indeed helped bring millions out of poverty; nevertheless, we have all heard the tales of sweatshop conditions in which some employees in developing countries are forced to work. Recent factory fires, in places like Bangladesh, only underscore the fact that we still have a ways to go before we can truly label transnational corporations “a force for good.”

 

The third argument offered by globalization optimists relates to the fact that with improved health and wealth “patterns of consumption are becoming globalized. More people around the world are consumers rather than living subsistence lifestyles.” As I’ll note below and in the next segment, pessimists don’t necessarily see this as a good thing. I would have stated the argument a little differently: Globalization has helped millions of people escape poverty and become part of the global middle class. Most economists believe that the future of the global economy will be determined by this global middle class. People in both the developing and developed world will benefit if this trend continues.

 

The fourth argument provided by the blogger is a bit frivolous. He writes, “Sporting events such as the world cup and the Olympics have become more popular.” Globalization, especially the spread of technology, has certainly played a role in sporting events like the World Cup and Olympics being seen by more people; but, it hasn’t necessarily increased global interest in sports that did not already have an international flavor.

 

The fifth argument that the blogger asserts is used by globalization optimists is that it has helped “spread … Democracy and respect for human rights since the end of WW2.” As evidence, he points to “the end of colonial rule in Africa, the collapse of communism and the Arab Spring.” New technologies that have connected the world through satellites, cell phones, and the World Wide Web have clearly had an empowering effect. Whereas people used to talk about the course of history being changed primarily by military engagements, today we often read about super-empowered individuals who use social media to change the world. And that is a good segue to the sixth argument optimists offer, namely, “the growth of social media (Facebook and Twitter) have lead [to] more freedom around the world.”

 

The seventh argument optimists use is that “globalistion increasingly means global cities [and] urban centres … have highly educated, politically engaged middle classes.” Whereas New York Times‘ columnist Tom Friedman argues that globalization has made the world flat, others argue it has made the world spiky — making it look more like a bed of nails than a playing field. Thejas Jagganath explains it this way:

“Contrary to popular belief that globalisation is a worldwide phenomenon leading to a leveled world, Richard Florida in his book ‘Who’s Your City‘ argues that this is far from reality. He states that the world is ‘spiky’ with innovation and global ideologies largely spread across certain cities more than others. This concept of the world being uneven and spiky is in relation to Thomas Friedman’s concept of the world being flat. In his book, Friedman writes ‘when the world is flat, you can innovate without having to emigrate.’ Florida argues that this is not true, and rightly so.” [“Globalisation in a Spiky World,” Urban Times, 26 February 2013]

Just because globalization has been spiky doesn’t mean it hasn’t provided benefits. Globalization optimists argue that you should rejoice whenever you see people being raised out of poverty, even if it is accomplished unevenly. I would classify Bill Gates among the optimists. Since retiring from his day-to-day role with Microsoft, he has dedicated himself to help solving global problems ranging from food security to health to education. He believes that a combination of technology, big data, and measurement will help us solve the world’s biggest problems. [“Bill Gates: My Plan to Fix The World’s Biggest Problems,” Wall Street Journal, 25 January 2013] In his article, Gates specifically focuses on the importance of measurement. He begins his article by citing a book entitled The Most Powerful Idea in the World, written by William Rosen. In that book, Rosen relates how new, precise measuring tools helped foster the industrial revolution. Gates continues:

“There’s a larger lesson here: Without feedback from precise measurement, Mr. Rosen writes, invention is ‘doomed to be rare and erratic.’ With it, invention becomes ‘commonplace.’ In the past year, I have been struck by how important measurement is to improving the human condition. You can achieve incredible progress if you set a clear goal and find a measure that will drive progress toward that goal — in a feedback loop similar to the one Mr. Rosen describes. This may seem basic, but it is amazing how often it is not done and how hard it is to get right.”

Gates provides a litany of anecdotal examples of how finding the right measure has resulted in significant gains. He continues:

“There are plenty of other areas where our ability to measure can improve people’s lives in powerful ways — areas where we are falling short, unnecessarily. In poor countries, we still need better ways to measure the effectiveness of the many government workers providing health services. They are the crucial link bringing tools such as vaccines and education to the people who need them most. How well trained are they? Are they showing up to work? How can measurement enable them to perform their jobs better? In the U.S., we should be measuring the value being added by colleges. Currently, college rankings are focused on inputs — the scores and quality of students entering college — and on judgments and prejudices about a school’s ‘reputation.’ Students would be better served by measures of which colleges were best preparing their graduates for the job market. They then could know where they would get the most for their tuition money. In agriculture, creating a global productivity target would help countries focus on a key but neglected area: the efficiency and output of hundreds of millions of small farmers who live in poverty. It would go a long way toward reducing poverty if we had public scorecards showing how developing-country governments, donors and others are helping those farmers.”

Measurement and data go hand-in-hand. In an earlier post entitled Data Philanthropy and Global Resilience, I discussed how important is that policymakers have access to the right kind of information so that they can establish policies and programs that will make the world more resilient. Gates concludes:

“If I could wave a wand, I’d love to have a way to measure how exposure to risks like disease, infection, malnutrition and problem pregnancies impact children’s potential — their ability to learn and contribute to society. Measuring that could help us quantify the broader impact of those risks and help us tackle them. The lives of the poorest have improved more rapidly in the past 15 years than ever before. And I am optimistic that we will do even better in the next 15 years. The process I have described — setting clear goals, choosing an approach, measuring results, and then using those measurements to continually refine our approach — helps us to deliver tools and services to everybody who will benefit, be they students in the U.S. or mothers in Africa. Following the path of the steam engine long ago, thanks to measurement, progress isn’t ‘doomed to be rare and erratic.’ We can, in fact, make it commonplace.”

If I had to choose a camp into which I must be placed, my first choice would probably be the optimists’ camp. I do believe that international transactions provide more benefits than ill effects. As I noted earlier in this post, not everyone is an optimist when it comes to globalization. In the next segment of this series, I’ll look at what the pessimists have to say.