Globalism - part I (v1.0)

 A key reference is Professor Ramon P. DeGennaro of the Univ of Texas at Knoxville. This essay is on globalism. It will only refer to nationalism/national policy as a reaction to and interaction with globalism. It is not an essay on nationalism/national policy. 

For the first time in human history, products, services, technology, money, and information flow easily throughout most of the world. There is also a marked increase in people migrations and flow of people across borders. Cross border migrations are enhanced with globalism. Modern commerce is global. International economic organizations—the World Trade Organization, the International Monetary Fund, the World Bank, and other bodies—play a large role in global commerce.  A physical presence (like a building) isn’t necessary for an institution to affect our freedom and prosperity, though. An institution could also be a custom or law that many people use or follow. An example is democracy. Another is property rights. Institutions are also the formal and informal rules that govern economic and political life. Since the 40's, global institutions, rules, customs and laws have risen, and helped stitch together the world. 

But there are downsides and challenges to globalism. Globalism implies that whole industries in a country may die if it is much more economic to produce it elsewhere. Companies also may die if they cannot compete in the wider global marketplace. This can cause major disruptions and relearning for people in those industries or companies. 

There are national security downsides too. Conflicts can disrupt global supply chains. A nation is vulnerable to major disruptions and blackmail, by another unfriendly nation withholding much needed goods, services, investments, technology or information. With globalism, embargos and sanctions become potent tools or weapons that a nation can wield against other nations. A trouble spot can have ripple effects on the entire world because the world is so interconnected. A globe straddling internet allows cyberattacks and disinformation and influence operations to be launched from anywhere. A technology device or software that has widespread use could be used to spy on people if the technology originates from an unfriendly nation with that intent. In the worst case it can disable communications or computer networks or critical infrastructure or devices on command if the rogue device or software is used there. There is a national security dimension to globalization that countries are increasingly aware of. This aspect is an evolving work in progress, and will unfold and take shape over time, and will not really be fully treated here. It is only just really gaining momentum now. 

The migration of people across borders is part of the globalism story but has faced a backlash from some native residents who resent this (example BREXIT was partly due to EU's free movement of people policy throughout the EU area). Movement of goods across borders, companies/facilities across borders, and movement of people across borders are all aspects of globalism. The people migration I am focusing on here is legal related to globalism where you have cross border hiring with global, mid-sized and large corporations tapping into the global talent pool to get the best labor at the cheapest price to improve quality to maximize global competitiveness. Talented people move around to where the work is, and these companies hire globally using any visa category the host countries allow. For higher skilled jobs the companies are all competing for the same global talent pool. This though increases competition in those countries with local talent. In US, the H1B visa has been used a lot by tech companies for needed talent. The F-1 student visa brings a lot of global talent to US shores many of whom later advance US companies for global competitiveness. India taps into a large global talent pool of Indian origin diaspora with the OCI card/visa. UAE is a country with a very small local talent pool where global talent/expats were induced to come and to propel its prosperity and compete globally. UAE competed in the global talent marketplace to achieve this. Emirates airlines for example is now a world class airline that is now very successful globally.  Onerous Immigration barriers by a host country however will only result in companies moving facilities and jobs to other countries to get the talent needed (including countries with friendlier immigration laws). Having a work force with the best talent especially for higher skilled jobs is key to survival and success in the global competition that globalization implies. 

Companies also move facilities and jobs abroad for another reason besides tapping into talent - to reduce labor and operating cost since goods or information produced anywhere can move across borders, but that, while important, is lower down in the food chain in terms of strategic value in my opinion. It is more operational efficiencies. To me goods moves across borders, money moves across borders, companies/facilities move across borders and people move across borders, are correlated. Everyone may not see it the same way. 

These dangers and opportunities have caused many countries to rethink the extent they encourage local industries to be nurtured or even protected in select areas, and the extent they allow foreign ownership of local companies or land. It has caused them to rethink their use of technology devices or software from unfriendly nations in critical areas. It has caused them to rethink their immigration laws, and their trade policies. It has also triggered a burgeoning industry in cyber defense and cyber forensics. Preserving the advantages of globalism (especially in reduced costs to consumers and improve global prosperity) while addressing national security concerns and possible nativist backlash against cross border people movements and wholesale industry or company deaths is a balancing act for policy makers. I leave such national policy formation in more experienced hands. Exploring the possible solution spaces that nations have here is a whole another interesting subject area especially for developing nations. 

One of the advantages of globalism is increased global prosperity. But why are countries poor? It is not because of lack of natural resources because how then do you explain Venezuela and Nigeria which are poor despite an abundance of natural resources? It is not due to cultural differences because how then do you explain the difference between north and south Korea or between Hong Kong and China in the past? A logical explanation is it is because of bad policies and nonfunctioning or poorly functioning institutions. Institutions include rules, laws and customs. Good institutions have strong property rights, limits on elites, politicians and other interest groups, a measure of equal opportunity and rule of law, and a degree of economic freedom. Good economic institutions correlate very well with prosperity.

The G20 summit in India later this month will reflect how hopes of a global order based on a Western rules-based system have splintered, the world’s division into democratic and autocratic camps, and the way in which internal populism and protectionism in many states have eroded pushes for free trade. This is today's reality. 

There is a more I could potentially drill down into including dwelling into nationalistic, protectionist and populist/demagogic forces swelling in various countries, national mismanagement in various countries, and increased national security vulnerabilities emerging and its intersection with globalism, but for brevity the rest of this essay will focus instead on key global institutions and the key roles they play in globalism because that is very valuable to know. This is the backbone of the international rule-based order. This part is very factual and may be somewhat boring to some. To prevent this blog post from getting too long, I will continue this part in a new blog post.