Globalization – Advantages of a networked world
- minutes reading time
Wealth inequality is not caused by globalization, but by the selfishness of those who seek to cement their own advantages in a globally-connected world. But they will fail, politically as well as economically.
Seldom has a president polarized society like Donald Trump has during his past three years in office. With his repeated “America First” proclamation and his ostensible prioritization of American interests, he has given voice to a nationalistic, uncompromising political view previously expressed only behind closed doors, at least outside of countries run by dictators. Several weeks ago he summed up his view of the world in a speech before the United Nations when he said, “The future doesn’t belong to the globalists. The future belongs to the patriots.”
Although this event has nearly faded into memory, it nevertheless reflects a global trend in which the danger lurks that with the persuasive power of its simple message, this world view will take on a life of its own without anyone critically questioning the underlying mental models.
It represents the height of cynicism to think that Donald Trump gave this speech in front of the organization created nearly 75 years ago in the shadow of World War II, with the aim of ensuring friendly international relationships, guaranteeing human rights around the world and promoting global humanitarian aid and sustainable development.
Those in Europe who might feel spontaneously drawn to a strategy of national self-interest at the moment, should ask themselves what would have happened in Germany, and in Europe, had the US refrained from entering World War II, and instead focused solely on its own short-term national priorities. Even today, a global institution like the United Nations, supported by all countries, is vital when it comes to taking a stand against the unchecked expansionism of individual dictatorships.
Globalisation and nationalism in context
Still, the public debate in many countries about newly-enflamed nationalism, which is often a moral and extremely emotional one, masks an underlying and more important question: what is globalism actually? Is it a political stance or simply an unalterable fact in the development of the human race? Is globalization really the reason why more and more people have a growing sense that economic advantages and disadvantages are being unfairly distributed? And does revitalized nationalism really offer a promising strategy to combat the growing disparity between those who profit from globalization and those who feel disadvantaged by it?
Many of those who are being tempted into waving their flags in the winds of nationalism are doing so in the belief that “if the pie is bigger, then everyone automatically gets a bigger slice.”
These are essential questions, because they impact not only our political attitude, but also our ecological behavior in an economy that is reaping increasingly serious collateral damage on our ecological and social systems without assuming any responsibility for the consequences. While we continue to debate how to keep envisaged sanctions from impacting economic growth when discussing the issue of sustainability, we have completely lost sight of the global perspective.
The discussion surrounding sustainability in the textile industry is merely one clear example. Despite the evidence that manufacturing PFCs – utilizing “Forever Chemicals” – or materials containing PFCs into the environment poses a cancer risk, for years manufacturers have been making the shift to biocompatible materials only if it doesn’t place any restraints on the consumer (and thus on the manufacturer’s own revenues), as opposed to asking how maximum performance can be achieved without the use of PFCs in functional textiles.
We never ask how quickly we can change. Instead we still ask how much longer we can maintain the status quo while believing that our economic system – homo economicus – serves as our justification.
Patriotism – Where are the borders?
Although the term patriotism easily rolls off of our tongues, we first need to ask ourselves where the borders are. While the Latin term – Patria, fatherland – was hard to comprehend even during an increasingly expanding Roman empire, given that the newly-subservient nations were expected to switch their allegiance to the new masters, in an increasingly multicultural society it’s even harder to clearly distinguish the borders of the (father)land.
What does patriotism mean?
Originally derived from the Greek word “patriótes”, which means “someone of the same sex”. Instead of patriotism, one could also say “emotional attachment to the cultural and historical values and achievements of the people in whom one lives”.
Like most Americans, even for Donald Trump it’s not that easy to draw a distinction since his grandfather came from Germany, not to mention that his wife Melania also lays claim to a European “fatherland.” It’s only been a couple of generations since vast parts of the US that were originally settled thousands of years ago by the First Nations, were taken over and then split into a large number of different states. The same applies to the federal states of Germany, as well as to artificially-created state entities such as Libya, the former Yugoslavia and the independence movement in Barcelona. There is no way to objectively draw the boundaries of patriotism.
We first have to be aware that with this term, the danger is that it can be misused by and exploited for the self-interests of those who bring it into play by arbitrarily stipulating patriotism’s borders.
Patriotism bolsters inequality
In such an environment, it seems obvious that this term relates only to a boundary freely selected by the user and in no way embodies a generally-accepted definition. In this form, patriotism diminishes into a label that conceals an attempt by a supposedly stronger group to set itself apart from a supposedly weaker group, thus allowing the stronger group to first and foremost exploit its own interests.
The logical consequences are then a tendency toward more global inequality, not to a leveling of the relationships. Only those who mistakenly believe they reside within these borders, hold out any hope that they don’t belong to the losers. But who can guarantee under these circumstances that the borders won’t quickly be re-drawn and the advantages once again reserved for those who are part of the stronger group?
The best example is America, which already leads the pack in the global ranking of wealth inequality among all developed countries. While the three (!) richest Americans possess more wealth than the poorer half of the country, according to Forbes the wealth of the 400 richest residents grew 75 percent in 2018 alone. This is not to mention that the most recent changes to the US tax code will do even more to widen the gap between the rich and poor, even though the country’s richest 10 percent already earn more than the remaining 90 percent altogether. This effect will be subtly reinforced by the on-going trade disputes, which have been greatly intensified under the guise of “America First”. Despite public claims that this will penalize other countries, it has merely led to higher costs and reduced purchasing power for American consumers. And in a world that relies on global supply chains, there is still no evidence that this strategy will lead to more jobs in the US.
As a result, the upshot of Donald Trump’s supposed patriotism is just more riches for those at the top of the prosperity pyramid, while the majority of his other torch bearers come away empty handed.
That’s why a healthy dose of skepticism is called for when we are deluded into thinking that a strategy focused on maximizing the interests of one’s own “Nation” means that everyone in the group will benefit from the (alleged) additional advantages. In most cases, the only beneficiaries within a particular society are those who belong to the “stronger” group – and from a mindset standpoint, both of these egocentric, underlying attitudes are closely related.
Is there really still such a thing as the stronger?
The other question is whether a strategy involving the optimization of one’s own interests can actually be successful in a globally-connected world. While in ancient Greece the individual advantage was closely tied to the success of the “Polis” – in other words society as a whole – roughly 250 years ago radical Darwinism acquired a reputation as a winning evolutionary and economic strategy, a view that is still rarely questioned.
But first we have to keep in mind that only in the rarest instances does evolution exemplify a categorical disadvantage for the weak. Although the strong undoubtedly have the upper hand on the weak in individual situations in the food chain, from a macro perspective, nature is a system of balances. No one sub part destroys the subsistence of the other parts through its behavior. And if it does happen, it’s because of destructive, disease-causing outgrowths like cancer. Keep in mind that the unequivocal selfishness of the cancer cells ultimately leads to the extermination of the host.
Likewise, the participants in the ecosystem are neither winners nor losers, but equal beneficiaries and simultaneously suppliers to other participants in the system. Even at the top of the food chain, the predator supplies food to seemingly weaker animals not only when it preys on others, but also at the end of its life. Unlike our economic system to date, the evolutionary supply chain is not a linear process, but a connected system of closed loops.
While self-interest certainly represented a successful driver of economic growth during the time of Adam Smith, it was mainly due to the fact that most of the commercial relationships played out within an economic microcosm. This seldom had consequences for distant players, and generally speaking rarely caused collateral damage to surrounding economic and social systems.
In contrast, in today’s world not only are communications, energy, logistics and supply chains inseparably intertwined. Every economic relationship is defined by mutual dependencies in one way or another. At the same time, the impact of our economic activities has long exceeded the ability of our economic and social systems to recover, with mid-term consequences that do not stop at any national border.
In this type of world, it’s extremely shortsighted to believe you are the stronger entity and that you can exploit this to your own advantage. A strategy that might appear to work in a purely bilateral relationship, in which you never meet twice, is a mindset from the past in today’s global world. After all, there is a very high chance that every hostile activity – be it tariff barriers, wall construction or social media manipulation – will eventually find its way back.
Why global partnerships are the only path to success in a global world
In a globally-interwoven world, the “me first” attitude that radical economic theory has touted as a winners strategy so far, is no longer a recipe for success.
Just like patriotism, “me first” provides the corresponding decision-maker limited discretion since there is never any way to objectively establish borders with industries, supply chains, national markets or even individual companies. And it seldom happens that the distribution rules for temporary winners are structured so that all participants can take part in the success. A prime example is Jeff Bezos, one of America’s three richest people, whose multibillion-dollar company pays no taxes in the US while many of his Amazon employees have to scrape by with minimum wage jobs.
Much more problematic however is the fact that like most, his business model is built on the premise that society bears the ecological side effects, such as the required logistics and the disposal of the waste generated by the mountains of merchandise returns that are not worth sending back to the manufacturer. What appears to be a winner’s strategy is in effect built on the back of a supply chain and logistics system that has repercussions which coming generations will be left holding the bag for.
And like patriotism, the unceasingly optimized capitalism that has been taught so far is nothing more than a smokescreen for a reckless egoism that brings advantages to fewer numbers of people and for which growing numbers of people have to pay the price.
By definition then, globalization’s mental twin must be a sense of responsibility. Among other things, that means taking responsibility to ensure we leave no traces that others have to dispose of, even if we are constantly discovering new places in the world where this is still legally permissible. Here for example, instead of thinking of it as some member of the food chain to be exploited at will, we have to view our supply chain as a network of partners, so that we can optimally couple our value chain processes together into a closed system – similar to what nature does.
In this spirit, we created the wear2wear consortium with the goal of developing a closed textile loop. And the consortium is still open to new partners. Each company profits from the partnership, while simultaneously serving other partners. No partner seeks to optimize its position solely for its own gain.
If those who endeavor to honor their global responsibilities in this way are referred to as “globalists”, then we confess to being globalists.
That’s because we are convinced that the challenges of the future can only be solved through partnerships that assume responsibility and strive to balance the entire system from which they profit.
In this spirit, we refuse to leave the future in the hands of the patriots.
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