Confronting the Long Crisis of Globalization Alex Evans
January 26, 2010 | More on Cooperation and coherence, Global system, Influence and networks, Key Posts | 2 comments
Tomorrow, the 40th anniversary session of the World Economic Forum begins in Davos, with the theme of ”Rethink, Redesign, Rebuild“. To coincide with it, David and I have teamed up with CIC director Bruce Jones to co-author a new report entitled Confronting the Long Crisis of Globalization: Risk, Resilience and International Order.
The report – commissioned and sponsored by the UK Foreign Office (though not a statement of government policy) - focuses on the mismatch between new transnational threats and flawed international institutions, and argues that if efforts to develop, reform and renew international institutions continue to fail, then there is a real and under-appreciated risk of a systemic failure that sees the current period of globalization start to unwind.
There’s precedent for this, we note in the report. The ’first globalization’ came to an abrupt halt in 1914 with two world wars and an intervening depression, having failed because:
States’ shared assumptions pushed them towards fragmentation rather than cooperation, mutual incomprehension instead of shared awareness. An epoch that that seemed to be characterized by interdependence and common interests ended in shared disaster.
Even just in the last decade, the three defining events - 9/11, the 2008 food and fuel price spike, and the credit crunch – were all about a collective international failure to manage shared risks effectively. So, we argue, states’ foreign policy doctrines need to move away from the national interest – which is in any case defined badly, if at all – and towards shared risk management.
We also set out a range of concrete recommendations in pursuit of the same ends, including:
Creating new analytical mechanisms for creating shared awareness about shared risks. E.g. the IPCC provides crucial analysis of the problem of climate change – but there’s no equivalent on the solution.
Improving the ‘bandwidth’ of the G20. E.g. by strengthening Sherpa mechanisms, and building links between the G20 and formal institutions, thus improving the range of policy options going to heads.
Setting up a ‘red team’ in the international system that has the job of exploring risks and challenging policymakers on whether enough is being done to manage them – similar to the Defense Research Advanced Projects Agency in the US, which has the job of “preventing surprise”.
Changing how governments organize and deliver foreign policy. We argue that all governments will need to spend more money on managing global risks, and do more to integrate the different elements of foreign policy (aid, diplomacy, military).
The paper’s conclusion:
The challenge facing globalization can be compared to ‘shooting the rapids’. Charting a course through whitewater, there are many possible paths, but few attractive destinations. It is the river, not the paddler, that dictates the speed with which the boat moves. There is no opportunity to pause and rethink strategy, or to reverse direction: it is the capacity to reorganize while undergoing change that ultimately determines the journey’s outcome. Above all, the challenge is a collective one: the direction of the boat depends on the combined efforts of all those on board.
The task of building a resilient globalization is similar. Much could go wrong. The pace of the transition will be dictated by the risks themselves, yet governments will only succeed if they are prepared to take the initiative. Even in the best case, outcomes will be ‘messy’ and far from perfect. Results will be determined by governments’ ability to act in concert, as well as with networks of non-state actors.
The aim should not be to balace power between competing states, but to aggregate the efforts of those willing to aim for the preferred destination, while marginalizing or excluding those who are not (including those who actively seek to capsize the boat).
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An excerpt from my message to the authors of this report on globalization: “You have missed perhaps the most important element of the “Foundations for Cooperation” and why globalization has simultaneously increased both prosperity and risk/instability, which is the need to properly channel the aspirations of each individual citizen of the world in tune with the aspirations of the (progressively larger) group of which he/she is a part. Without that your “broad assessment of risks and solutions” and “an integrated picture that forces analysis” and covergae of “the scale of the task ahead” remain seriously inadequate. On that note please read below the reference to one Mr. F.W. Taylor, whose prescriptions aimed at making workers think differently have unfortunately morphed into using such incentives to reward short-term thinking. In his most notable Testimony to a Special Committee of the US Congress in 1911 Mr. Taylor said “Our opportunity lies in systematically cooperating to train and make this competent man. . . . The remedy for . . . inefficiency lies in systematic management, rather than in searching for some unusual or extraordinary man.” This basic thinking was at the root of the success of many western nations and Japan in the twentieth century and was recognized as such by Peter Drucker, but your report fails to mention that much of what is currently known as globalization emphasizes the latter. On that note, in “Where we are” and “Where we need to get to” you also miss Joseph Stiglitz’s argument in the Financial Times couple of years ago that the benefits of globalization are contingent upon the minimum wage for unskilled labour (through productivity gains) becoming comparable across the world. Over time that lack of focus on the individual will be the most troubling threat to international stability, not to mention a self-serving vision of non-zero-sum games by the powerful players….it took one misguided individual to almost blow up a plane over Detroit last Christmas.”
The ideals of globalization may have degenerated in order to promote the big players on the market, but we must look to the possibilities opened to us by globalization
It has made intellectual property available world-wide in an instant, whereas even 15 years ago a book would have to be shipped.
Globalization has also expanded the sales of hard-line items to a large extent, from foreign cars, to building materials, to tropical berries, to medicines, and more by opening communication lines that formerly were much more challenging and unreliable (overseas mail, telephone, and a lengthy paper-trail). As the internet has expanded world-wide, an online order form and instantaneous purchase has streamlined the buying process.
And last, but not least, globalization has allowed people all over the world to be exposed to all sorts of different peoples and cultures. This has created demand for products that not too long ago were limited to tourism. Now when a buyer reads about a Chinese jade necklace, or an Indian Sari, or a book by an Iraqi author, they simply do a search and buy what they want.