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Jan 19, 2017 11:25 AM ET

Is Globalisation Reversible?

iCrowdNewswire - Jan 19, 2017

By Biru Paksha Paul
Jan 19 2017 (The Daily Star, Bangladesh)

Over every summer, I leave the US to visit my village in Nalitabari where I look after construction work and run an online class for the students of mainly upstate New York. This is called globalisation. Sometimes I go to the Garo Hills branching from Meghalaya, or travel by boat on the river of Vogai while responding to important emails or checking my balance after a mobile transaction – a scene beyond imagination in Bangladesh some 30 years back. All thanks to globalisation.

globalisation_2Of late, we are wasting more and more energy carrying out a confused propaganda against globalisation, claiming that it is in reverse gear. However, it never was and it never will be. The issue is how we see and define globalisation. The main strength of globalisation comes from technology that does not regress – whether we like it or not. The two major events on the global stage last year, Brexit and the election of Donald Trump, seem to have once again solidified the conviction of those who have been anti-globalisation since long. But that is a misinterpretation of these two victories, which mainly banked on anti-immigration sentiments and some mistakes in state policies of the respective governments.

Many critics are now extremely hyperactive in their fight against globalisation, some of whom are Nobel laureates. Of course, they present facts but often these facts are honey-coated with their biases and prejudice. But globalisation has many wings; it is a comprehensive, complex dynamic. And only labour migration cannot explain the whole story. Among other dominant determinants are capital, technology, knowledge, and above all human psychology that helps us understand and learn about different cultures. Capital flows from one side of the globe to the other in a couple of seconds, and so do knowledge and technology. Resisting this phenomenon by a simple display of ‘likes’ or ‘dislikes’ is nearly impossible.

But why would we resist globalisation? It goes against the basic Darwinian motion of evolution. No one would like to get back to the age of clumsy typewriters when computers are readily available. I witnessed the death of two upstate New York cities, Endicott and Cortland, because they could not swim upstream against globalisation and the principles of profit maximisation. Cortland was noted as the origin of a world-class typewriter company, Smith Corona, whose slogan was ‘commitment for excellence.’ But any excellence that is myopic or does not figure in technological growth is doomed to perish.

Endicott, the birthplace of IBM, saw jobs being outsourced to China and India, and could do nothing to hold them back, because the company treated the whole world as a single village for the sake of greater output and profit. Basic economic laws have empowered globalisation to keep on moving. No mighty commander was able to dictate this march. Had it been possible for any force to block this forward motion, the US could have done that to save millions of jobs outsourced to other countries in the last 20 years. And a large segment of US businesses would rather outsource their jobs to further their cost-lowering drive.

It is better to brainstorm which institutions we need to build to face the growing challenges of globalisation rather than blindly believe that some ‘saviours’ will reverse globalisation to protect the inefficient local mills and factories. Businesses are the main force behind global integration. Capital travels from one country to another for the sake of a better interest rate. Modern kabuliwalas are around and we need to deal with them for direct portfolio investment. There is no point in waiting for the kind-hearted kabuliwala of a Rabindranath Tagore story; people like him are no longer a part of this world order.

Noted Indian economist Jagdish Bhagwati initially believed in socialist closed-type planning, but later turned into a globalisation guru. His student and Nobel Laureate of Economics Paul Krugman believes that the good side of the big monopolistic competition that has spread over the world can guarantee lowest prices. Hence, fighting Walmart becomes almost impossible for local small businesses.

Some of us might be confused to see a drop in inter-country labour migration, which we immediately credit to a reversal of globalisation. New apps of Microsoft in Seattle can instantly be downloaded in Rangamati. But capital movements depend on how we handle a myriad of rules and regulations that we have bureaucratically built over time. The movement of labour is even more complicated, and therefore, the slowest. Capital does not have any choice, but workers have religion, taste, language barriers, and above all, family bonds. Hence, uprooting workers from one culture and asking them to adopt another is difficult. Capital from one country and workstations at various countries build a style, which makes globalisation even more sustainable today.

In the early 1990s, many were opposed to three terms: globalisation, liberalisation, and free market economy. Some critics bundle all three items together and associate a similar (negative) connotation to all of them. Needless to mention, all three terms differ slightly in their meaning. Liberalisation mainly refers to the easing of trade; the main rationale of a free market economy is efficient pricing; but globalisation mainly refers to global travelling of capital, labour, and technology – a prerequisite that eases global integration of production and consumption. Tagore’s hope for a borderless world is definitely far from reality, but inter-country dependence, as proposed by David Ricardo’s theory of comparative advantage, is inevitable – and so is globalisation.

The writer is Associate Professor of Economics at the State University of New York at Cortland.
E-mail: [email protected]

This story was originally published by The Daily Star, Bangladesh

Via iCrowdNewswire
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