Globalization: An inevitability or an accident?
Globalization is breaking down because it is rooted in geopolitical realities that no longer exist.
The indisputable trend of the past 30 years is increasing globalization. Modernity as we know it is all about increasing interconnectivity among nations via the removal of national barriers to trade, travel, and communications. But this increased interconnectivity is based in the assumption of continued certainty and stability.
Consider the events of the past 12 months. What about the world’s political, economic, health, cultural, and environmental systems are stable? Was anyone certain of what was going to happen? Of course not. The idea of certainty and stability is laughable. Uncertainty and instability are increasingly the norm.
Modernity’s problem is it was designed for a different world. Globalization is breaking down because it is rooted in geopolitical realities that no longer exist.
The foundations of globalization are found in the ashes of the Second World War. Europe is in ruins. The depths of human suffering surpass the imagination. From Paris to Warsaw to Rome to Berlin to London the landscape is the same: bombed out ruins of once proud capitals. Fifteen million soldiers dead. Twenty-five million civilians murdered - over 2.7 million slaughtered in Nazi death camps. This is Europe in the immediate aftermath of the Second World War, a continent ruined and traumatized by the horrors of war.
Despite these horrors, there is little reason to hope the looming specter of war is banished. The Soviet Union shows no sign of relinquishing its occupied territories in Europe. In fact, Stalin’s militaristic occupation of Eastern Europe and East Germany in the post-war period signals the possibility of renewed conflict on the Northern European Plain.
A brutal reality confronts the Americans in late 1945. The Soviet Red Army numbers over 11 million soldiers. In comparison, the U.S. Army numbers only 8.2 million and is spread across the European and Pacific Theaters. Even with nuclear weapons, which are few and difficult to produce, the Americans lack the sufficient forces to resist a Soviet attack in Western Europe. And the Allied powers know it.
The great powers of Western Europe are compromised. Germany is demilitarized and partially occupied by the Soviets. France’s remains a shattered husk of former greatness. The British Empire, overextended by its efforts in the First and Second World Wars, is on the verge of total collapse. The only Allied Power with the resources capable of defeating the Soviets is the United States, and yet it is an ocean away. In the advent of war, Western Europe would be absolutely steamrolled by the terrifying death machine of the Soviet Red Army that raped and pillaged its way through Eastern Europe into the heart of Germany.
Given these realities, it appears that all Europe might rapidly fall behind the iron curtain of communism. Something must be done to deter Stalin’s ambitions of a global communist state. The Americans, being the ultimate pragmatists, decide upon a simple, straightforward solution: Uncle Sam would become Uncle Sugar. America would buy a global alliance to contain the Soviet Union.
American strategy is simple: grant preferential trade agreements to friendly powers so they can use exports to the U.S. to rebuild their manufacturing capacity, rapidly enrich their populaces, and, most importantly, field a modern military to deter the Soviets.
Western Europeans are offered a very transparent deal: you can either be filthy stinking rich by siding with the Americans and get annihilated by the Soviets or you can be poor and miserable by siding with the Soviets and get annihilated by the Americans. The Western Europeans, being supremely reasonable people, choose the option that makes them filthy stinking rich. If extermination is inevitable, might as well enjoy the ride.
What unfolds next is the most ambitious series of multi-lateral agreements in human history. To guide and formalize this new democratic bloc, the Americans oversee the Bretton Woods Conference and subsequent creation of the World Bank and International Monetary Fund (IMF) to govern international monetary policy, the General Agreement on Tariffs and Trade (GATT) to direct trade, the Marshall Plan to stabilize Bretton Woods and jumpstart economic growth in Western Europe, and finally the North Atlantic Treaty Organization (NATO) to consummate the anti-Soviet military alliance. Ultimately, this improvised system of global finance, trade, and military security would be expanded to include almost every major power not formally aligned with the Soviet Union.
What’s so crazy about this unprecedented, ad-hoc, unholy concoction of military alliances, trade agreements, and monetary policy is that it worked.
On Christmas Day, 1991, the Soviet Union fragments, shocking the world and signifying an end to the Cold War. The Americans manage to defeat the Soviets without firing a shot. World War III is averted.
That’s not to say Soviet defeat is without cost to the Americans. The Americans lost over 54,000 soldiers fighting the North Koreans and Chinese on the Korean Peninsula in the 1950s. In the 1960s and 1970s, the Americans fought the Vietcong and their Soviet and Chinese allies to a tactical draw but lost the political war at home.
The cost to the U.S. economy is also steep. Faced with cheap exports emanating from Western Europe and Japan, the once great Arsenal of the Democracy slowly transforms into the Rust Belt. Real wages for most Americans stop growing in 1973. Government deficits balloon to maintain military expenditures and to provide social welfare spending to placate a growing number of economically disenfranchised citizens.
But given the alternative of nuclear apocalypse and the possible annihilation of the human species, it’s not a bad trade. Getting nuked is no one’s idea of a good time, so the Americans went with the option that didn’t make the Fallout video games series a reality.
Here’s the thing: despite the costs the Americans incurred to defeat the Soviets, it wasn’t crippling. America at the end of the Cold War is the indisputable military and economic superpower. There is no rival to American hegemony. The only possible rivals of France, the United Kingdom, and Japan are all subsumed by the American alliance and economic order. China is a nonfactor at this point. All that is left is for the U.S. to reevaluate its economic and military commitments and address ongoing domestic political problems.
Then a strange thing happened. Instead of rebalancing commitments, the U.S. doubled down. The alliance system designed to defeat the Soviet Union was supersized by American elites to create the Liberal International Order.
This order, sometimes referred to as globalism, is defined by its commitment to multilateral institutions such as the United Nations, NATO, the World Trade Organization, the World Bank, and the IMF. These institutions in turn promote neoliberal ideas that seek to reduce the barriers to the movement of capital, goods, and labor across international borders. Furthermore, these institutions seek multilateral consensus on everything, from human rights to regulatory standards to election laws. The goal, in a sense, is a future where The World Is Flat. It is The End of History. It is an Order where the global economy is guided by neoliberal economists and politics are guided by liberal democratic principles emanating from American and European elites.
But globalist ambitions are all predicated upon one assumption: the post-World War II Order is permanent.
But how realistic is this assumption?
The post-World War II Order was created to defeat the Soviet Union. It was designed to avert World War III not to further globalist dreams of a Liberal International Order. Globalization was a happy accident, not the overriding goal.
For the experiment of the Liberal International Order to continue, the status quo must hold. The U.S. must continue to be the world’s policeman by guaranteeing security for all members of the Order. The U.S. must continue to be the world’s largest importer to allow the rest of the world to get rich. But with the resurgence of Russian power, the rise of Chinese global ambitions, the constant instability of the Middle East, and the rise of populism in the West, the Order is facing challenges across multiple fronts.
The great question facing globalization and modernity is this: can the status quo hold? The answer is increasingly no.