Globalisation: Time for a Second Coming?

Turning and turning in the widening gyre

The falcon cannot hear the falconer;

Things fall apart; the centre cannot hold;

Mere anarchy is loosed upon the world

THE SECOND COMING – William Butler Yeats

Written in 1919 after the death and destruction of the great war, Yeats is envisaging is a revival of humanity from the darkness to recovery and new light. In a world where the inner workings of Trump's white house have been revealed, and it appears the centre cannot hold these are good lines on which to reflect. It would be too easy to Peter Pan, duck or gloss over the polarisation of the social, political and regional flash points in the world. The interconnected nature of these challenges and how they impact the public perception and support for globalisation directly threatens economic growth and the continuing recovery of the global economy. Unlike some, I still believe globalisation can lift people out of poverty and make life and the world better.

To achieve this a coordinated response to the hyper-nationalism which is destroying both Pax Americana and the European dream of harmony, stability and enlargement must be found. A coherent answer is needed in response to these forces and the fear and enablement of 'hard man' isolationist politics. True, financial markets are at record levels, in 2017 IPOS in the US were up with 189 companies raising nearly $50 billion. However, the lack of leadership in Europe and the 'fire and furry' of Trump have left the world order rudderless with no one focused on global cohesion.

Positives are seen in low unemployment in many regions, inflation is kept in check and the economic indicators from key markets including India and China are robust. However, it is a mistake to view the world through the lens of this financial data alone. The real tragedy is that globalisation, welcomed in the 1990s, in the relatively short stretch of two decades, now has a bad name. The idea or concept seems disconnected from its origins which at one point were noble and positive.

The world has changed so much that it is hard to keep track of all the events that have been changing it. For millions of people, life has been turned upside down. As dramatic as that sounds, perception is reality, and that is what is undoubtedly at work. The 1990’s was a period of high optimism and possibility. Naomi Klein’s book ‘No Logo’ informed a generation with a manifesto as to how capitalism could operate. In the immediate post-cold war era, with influential global institutions in the right hands there seemed a way to get back home to universalist approach to politics and economy the force on which everyone would rise. This was the optimism of the times.

The pioneering thinking of the era around climate change and sustainability has culminated in the Paris Agreement. Jubliee 2000 and efforts such as 'Drop the Debt' heralded a new consciousness where developed economies, policymakers and businesses actively focused on supporting development in Africa and Asia. With these achievements, and acknowledging the setbacks, it is still puzzling why the ideas of coming together in an integrated globalised world are facing such rejection today. A starting point and dialogue is required to restore the original ideas and concepts around globalisation as a force for good.

Part of the challenge can be found in the retreat of economic thought which was tied to the social compact. This created economic imbalances which are aligned with the isolation of progressive political thought in Europe and the US. Perhaps one can blame the speed with which the EU and the US chased the creation of a homogenous world economic order, with little analysis of the consequences. In retrospect rate at which the European Union expanded and the introduction of the single currency were well-intentioned mistakes. The misguided overseas wars and interventions have left a geopolitical legacy of instability and disorder. Finally one can not ignore the 2008 financial crisis and its economic consequences which had a significant influence on the UK's decision to leave the EU.

The voters for Brexit cite the influx of eastern Europeans or ‘non-English’ as their main gripe. However, one suspects the real culprits are the impact of 'import shock' on manufacturing jobs and the long-term failure of the ‘mythical trickle down economics’ and the free fall economic policies created by Milton Friedman and the Chicago school of economics, so pervasive in both the US and Europe, which encourages the withdrawal of the state and the shrinking of government.

Evidence suggests that in the post-crisis world governments virtually everywhere adopted knee-jerk measures to reform the running of their economies. These ranged from erecting barriers to entry for services and labour to implementing cuts across all government spending in favour of the troubled banking system. While the call for reform was most influential in Europe, the political leaders failed to take the electorate with them which increased the impression that globalisation leads to individual isolation. The response can be seen in low voter figures and in the Catalan vote in Spain. Suggesting the idea that disengagement and being smaller in a global world more favourable than being isolated in a globalised world.

In the western world, the general feeling among consumers is that as an individual consumer and voter is being played, left alone, pushed and shoved this way and that, and increasingly being made to watch the world around you as it comes apart. To many people, the total of events and developments that have been happening over the last couple of years have been happening at a supranational level and out of their control.

There is a real or imagined deficit of truth. When one looks at current events, people across the world can hardly be blamed for being scared about the future and recoiling from a globalised economy of which they know little, and understand less. The source of the fear comes from many places in the public and private lives of people, but the one thing they point at is ‘globalisation’. Which they believe as a force which only benefits the few, the rich, the technology owners and the elite.

Millions of jobs have gone from West to East the workers have been lucky enough to survive are now faced with the perceived threat of modernity in the form of Artificial Intelligence and the obsolescence of their skills. The feeling of vulnerability has manifested itself in the historical way that economic fear does, which is with the collapse in the centre followed by a move to the left and right we witness in both Trump and Brexit. What is the most unsettling is the inability for the centre and the progressives to find their voice and mount a charge or an attempt to restore order.

It is poignant that this week saw the passing of the Irishman Peter Sutherland dubbed ‘the father of globalisation’ long before the term acquired its current negative connotation. Sutherland was at his most powerful in 1994 when, as head of the General Agreement on Tariffs and Trade, he secured the ‘Uruguay Round’ when 123 countries agreed to new rules on agriculture, textiles, services, intellectual property and trade disputes.

A man of his generation born just after the second world war, having lived through a Europe of the cold war he represented for many the enormous progress that economics and politics could make in the world in combating anarchy and forging a future for all. The two words “for all’ are critical because for the Jesuit educated, Sutherland the model of globalisation is about progress and modernity where rich and poor will benefit.

That was the promise and where globalisation has faltered. It is the challenge leaders in Davos, G8, G20, the EU and progressives globally need to remedy. We have gone too far to turn back, we are too interconnected not to find the second coming and a solution to fix the problems of globalisation and its discontent’s.