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Is This the End of Globalism?

Is This The End Of Globalism?

Many of us will never forget the first time a product was “unavailable” on Amazon or on InstaCart or at the grocery store. As the nation goes into lockdown mode in order to combat the spread of the coronavirus, panic buying and supply chain failures are introducing otherwise well-off Americans to new experiences: empty shelves, canned foods, bidets. In America, the land of endless abundance and same-day delivery, the feeling of scarcity is shocking. The ‘Haves’ are now the ‘Have nots,’ and the uncertainty is novel. Americans, especially the middle class and up, are privileged to live in a society where every fruit and vegetable is available all year round. Other countries may not be able to relate to such opulence, especially nations where the inconsistent availability of goods is the norm. Even in developed nations, scarcity is often a regular part of everyday life. For instance, in Germany, asparagus and chanterelles can only be found in stores when they are in season. And good luck finding clementines or bananas in winter. When such goods are available out of season, they cost more because they have been shipped in from South America. But in America, grocery stores and other retailers including e-commerce businesses like Amazon exist in a sort of limbo, outside of time and space, where the availability of commodities is unaffected by seasons, distances, weights, and volumes. Everything is always fresh, fast, convenient, and above all, available.

The abundance that has allowed Americans to grow accustomed to such comfortable lifestyles is the result of globalism. Globalism, simply put, refers to the planning and operation of the global economy and the networks of trade, communication, institutions, and infrastructure that compose it. Those who wish to participate in and expand such networks are globalists. Crucially, globalism requires socio-economic coordination and cooperation across societies to function properly. When that cooperation breaks down, as has happened due to the coronavirus, the globalist project is threatened. As the economist, Branko Milanovic recently wrote, “the world faces the prospect of a profound shift: a return to natural—which is to say, self-sufficient—economy. That shift is the very opposite of globalization. While globalization entails a division of labor among disparate economies, a return to natural economy means that nations would move toward self-sufficiency.”

Make no mistake: globalism could end. The interdependent nature of the global economy is good for commerce, but also for spreading diseases. In response to the new risks of engaging with global systems, societies will be forced to become self-sufficient for the time being. Some amount of self-sufficiency is good. But if the current crisis persists for a year or more, the loss of networks and global economic activity will become permanent. Economies will become relatively closed systems, producing their own goods and services domestically, and trading only surplus goods with each other, similar to the way in which medieval fiefdoms operated after the fall of the Roman Empire. Barring the very real possibility of complete social collapse, the coronavirus could usher in an era of economic provincialism.

The impact of such a shift would constitute a fundamental reorganization of American life. No doubt, the current crisis will give rise to a movement toward self-sufficiency no matter how long the economic shutdown lasts, but the longer it lasts, the stronger the move away from globalism will be. We might see a resurgence of the “frontier mindset” and a mainstreaming of home manufacturing and craftsmanship. Perhaps 3D printers will become a staple appliance in every household. Perhaps more factories will produce clothing domestically. Perhaps Americans will learn to celebrate the seasonal availability of their produce. Local workshops and Makerspaces could serve as focal points for a new localized manufacturing economy. Traditional manufacturers may not be able to shift accordingly, and policymakers will need to support workers, such as factory workers, who depend on global trade for their livelihood. But the upshot is that the coronavirus and other such diseases would not be able to spread as quickly through such a provincialized system as they currently can.

Interestingly, while the post-pandemic economy will likely be a mixed global-provincial economy, the proportion and dynamics of the mix could be very fluid. Viruses spread through populations in waves in part due to the availability of hosts. The number of available hosts will increase as societies recover and come out of self-isolation. The resulting spikes in new cases could produce a new rhythm or seasonality to the economy, wherein the supply of riskier kinds of labor is higher when the rate of infection is low. As the infection rate increases due to societies coming out of isolation, labor that is oriented toward global markets would increase and local self-sufficiency would decrease. As the disease spreads and workers return to isolation, such globally-oriented labor would decrease and localized manufacturing would increase. The seasonality of such a dynamic would introduce periods of abundance and scarcity of specific goods and services, and while the convenience of consumer culture in America might suffer (no more same-day shipping for goods made in China, for example), societies overall would gain a new level of resilience. When global goods are unavailable, we would rely on local economies to fill the demand.

The new provincial economies will be a hotbed of innovation and cultural dynamism that America has not experienced since before WW2. It could also present a regulatory nightmare. Local manufacturers would produce goods in different ways according to local aesthetic tastes, traditions and resource constraints. Anthropologists will have their work cut out for them. But so would government regulators who would have to control local manufacturers in order to protect consumers. For instance, it is much easier to mandate the design parameters of cars when they are manufactured and distributed on national and international levels by just a few dozen national and multinational corporations. But in a world where demand for automobiles cannot be met by global manufacturers due to isolation and disease prevention measures, thousands of local car manufacturers would need to be empowered to meet the demand. And if a local carmaker cannot produce cars with, for instance, the type of door handle or side mirror that global manufacturers are required to produce, the local manufacturer should be allowed to produce their cars anyway so long as they find a suitable alternative. The same dynamic would play out across the economy, and regulating such local manufacturers would be challenging. Local manufacturers with limited resources will not have the same production standards as multinational corporations, and where regulation is lax, insufficient, or missing, the burden will fall on consumers to protect themselves.

While it is too soon to tell whether globalism will end completely yet, it is clear that local manufacturing will likely play a larger role in the economy going forward. After all, Americans confronting the “unavailable” notice in red letters on Amazon’s product listings will eventually figure out offline workarounds for most products. Some of those workarounds will be scalable to a local level. Meanwhile, some products will not be suited to local production, and some workarounds will not be scalable. Scarcity will probably play a greater role in American economic life than it has in 50 years. Like our grandparents and great grandparents who lived through the Great Depression and fought in World War 2, we must prepare to get used to the reality of scarcity. The current crisis will force us to reckon with the notion that not all things can be purchased with the click of a button from the sofa anytime we want. Hopefully, such growth will make us more resilient. Hopefully, it will bring us closer together and build stronger communities. Hopefully, it will lead to a golden age of craftsmanship and cultural rejuvenation. If that happens, perhaps the end of globalism will bring new kinds of abundance along with all the misery. For now, all we can do is stay inside and hope.