Saturday, April 10, 2010

Should we welcome globalization or fear it?

Having just finished reading Gregg Easterbrook’s new book, ‘Sonic Boom’, I'm not sure how he would answer that question. He sees fantastic potential for social progress, but improved living standards are likely to be ‘wrapped with ribbons of stress, anxiety and dissatisfaction (p.34). His bottom line seems to be that globalization is inevitable and that we just have to learn to live with it.

Easterbrook expects the forces of globalization to grow stronger. That means that the insecurity that people often associate with globalization is likely to accentuate:

‘Job turmoil, the economic roller-coaster, financial bedlam, media superficiality, celebrity inanity, political blather, targeted advertising, scream-and-shout discourse, the paving over of nature – they’re all going to get worse. A lot worse in some cases. Most likely, global economics will be blamed for whatever about coming decades we don’t like.’

He also suggests, however, that much of what people tend to like about life will get better:

‘Prosperity will increase, especially in the less affluent nations where improvement is most needed. Democracy will flourish on five and perhaps six continents ... . Information and knowledge will proliferate as never before, while art and culture become available to everyone. Many aspects of this evolving sonic boom will be really terrific.’

Then comes the recommendation:

‘The terrific aspects and the anxiety inducing aspects will be intertwined and we’re just going to have to live with this’ (p. 209).

Why is globalization inevitable? I think Easterbrook discusses this in several places but I have noted one place in particular. (I’m glad I made notes as I read the book because there are few clues offered in the contents page about where to find stuff and the index doesn’t seem to be as helpful as it could be. But I digress!) Easterbrook suggests that we can’t stop global change because it is associated with the spread of freedom – ‘most of the world’s nations are acquiring the same core structures (democracy, free-market economics, emphasis on education) that makes the United States the current world leader ... . The more America-like the world becomes, the faster the pace of economic change will be’ (p. 192).

I think Easterbrook is basically right about this. It would probably take a world war to stop globalization and there doesn’t appear to be one of those on the horizon. Perhaps some people said similar things around 1900 - prior to a few decades of disruption in global trade and investment. Even so, the main point is that the forces shaping the future of the global economy are beyond the control of any individual, firm or government. At a national level it is possible to shield some groups from the forces of global change but only by reducing the opportunities available to others.

Easterbrook acknowledges that it is possible for governments to provide a safety net that will provide citizens with some degree of security, particularly in relation to health care. He argues that people in the U.S. suffer more stress than do people in western Europe because of problems associated with the U.S. health care system (pp. 200-202). I don’t know whether or not this is a valid point. Evidence from the Gallup World Poll suggest that people in the U.S. tend to experience more stress than do people in western European countries and Australia. But Mexicans report experiencing a lot less stress than Americans and less stress than Europeans and Australians - so there is probably more involved than health care.

My main reservation about this book, as with Easterbrook’s earlier book ‘The Progress Paradox’ (discussed here), is that I think he overstates the insecurity that people actually feel as a result of the forces of globalization. The book seems to be full of colourful phrases to describe this insecurity. For example, Easterbrook writes of ‘change-based anxiety’ (p.34), ‘Multiple Media Personality Disorder’ which he defines as a ‘a universal low grade nervous tension from which there may be no realistic escape’ (p.70), ‘the Super Bowl of stress’ (p. 72) and ‘collapse anxiety’ (p. 168).

I acknowledge that job insecurity has increased. Easterbrook makes a strong case that each year it gets easier for someone to come along with a superior idea and put an established firm out of business (p. 134). He could be right that in future there will be a greater risk that people who have risen to the middle classes will ‘fall back’ down the economic ladder and end up bitterly unhappy (p. 196). I also acknowledge that the insecurity of modern life is a popular topic of conversation, particularly in the media. But I don’t think insecurity is having a large impact on behaviour and the way people feel about their lives. If a lot of employed people were feeling a high degree of insecurity about their jobs I think they we would see more precautionary saving and less willingness to go into debt than we have seen in recent years. Survey evidence suggests that the vast majority of people in high-income countries feel that they have a great deal of control over their lives.

This leaves me thinking that there must be a huge gap between the fears that a lot of people express when they talk at a superficial level about the challenges and insecurity of modern life and the deeper feelings that they have about opportunities and threats in their own lives. By the way, returning to the original question, I think we should welcome globalization for the potential it offers for ongoing improvements in living standards.

Gallup poll data for the U.S. shows, not surprisingly, that people working in firms that are hiring more people are more likely to be thriving than are people working in firms that are letting people go. However, even in the firms that are letting people go the percentage who are thriving exceeds the percentage who are struggling. It seems that most people who have a job are optimistic about the future even if their job is insecure.


Lorraine said...

Not sure how dumbing-down of media is attributable to globalization. Perhaps deregulation, but specifically those deregulations due to trade treaties? I don't see it. Most American lefty progressives attribute it to the expectation that journalism pull its own weight in the media enterprise, whereas a generation or two ago there was a tacit (and in the case of broadcast media explicit) understanding that the commercial activities of a media organization should subsidize the news division, which in turn should address the public with a certain gravitas.

American health care causes an enormous amount of stress. Being an American is living with a type of sword of Damocles over your head. If you have a job without bennies (a rapidly increasing percentage of jobs) it's living in terror of something going wrong with your body. If you have what's one of what's left of the cushy jobs (say a good union job) you worry about whether your claim will fly. The claims process is of course adversarial with all insurance plans, public and private, everywhere, but American health insurance is notorious for unpleasant surprises in the fine print. Another trend: Doctor's offices are starting to refuse to file claims, leaving the paperwork to the patients. But it's not the paperwork they are pawning off as much as the head-butting. American health care routinely turns middle class families into charity cases. I don't know what the deal is in Mexico. Perhaps, it being a poor country, dying prematurely for economic reasons isn't as embarrassing.

As for me, I'm an alter-globalist. I too see globalization as inevitable, or more precisely, I would say the nature of the economy has always been global. This is nothing to fight, as such a fight would either be futile or would result in international trade flowing through black-market channels. But I do not approve of the WTO model of trade treaties as a way to impose a deregulatory political agenda on nation states. If the carrot of access to markets is to be hitched to the stick of some treaty provision, the pressure on nation states should be more toward improving human rights, ecological practices and economic justice and less on right-wing agenda items like so-called structural readjustment, intellectual property lockdown, fiscal austerity, creditors' rights etc.

As for most Americans feeling secure or in control, I have heard of surveys indicating the opposite. Perhaps you are being ideologically selective of your sources. It's also quite possible that I'm an atypical American; one of below average worth.

Winton Bates said...

Thanks Lorraine. The comment about people feeling in control of their lives was based on the World Values Survey. The question: Some people feel they have completely free choice and control over their lives; while other people feel that what they do has not real effect on what happens to them. Repsondents are asked to give a rating from 1-10. Americans seem to have relatively high scores.