Flatlash: Rethinking Globalization

A flat world cuts both ways.

A flat world is a great thing when you can get a brand new high-def TV for less than $700 because it was made in China.

But it’s not such a great thing when you wake up one morning to find antifreeze in your toothpaste or lead paint on your children’s toys.

I think we’re now entering a period of globalization hangover that I call “flatlash.”

A new Pew report based on interviews with 45,000 people regarding globalization appears to support this view.

The report summarizes as follows:

People support the tenets of economic globalization but fear the disruptions and downsides of participating in the global economy. In rich countries as well as poor ones, most people endorse free trade, multinational corporations and free markets. However, the latest Pew Global Attitudes survey of more than 45,000 people finds they are concerned about inequality, threats to their culture, threats to the environment and threats posed by immigration. Together, these results reveal an evolving world view on globalization that is nuanced, ambivalent, and sometimes inherently contradictory.

There are signs that enthusiasm for economic globalization is waning in the West – Americans and Western Europeans are less supportive of international trade and multinational companies than they were five years ago. In contrast, there is near universal approval of global trade among the publics of rising Asian economic powers China and India.

I’m also reading a book now called Redefining Global Strategy that basically says that the world is not flat and that the companies that succeed are those that understand how best to navigate the many differences of countries and cultures around the world. I recommend the book and will post a review shortly.

My hope is that as this globalization hangover wears off we enter a period of “smart globalization.”

That is, we negotiate trade agreements that take into account human rights, environmental rights, and common sense. When 100,000 Costa Ricans are protesting a proposed free trade agreement with the US, something is not right. Just as Americans are now scared of toys made in China, Costa Rican farmers are justifiably terrified of the effect that US factory farms will have on their livelihoods. Even though more and more Americans don’t even like their own factory farms, our trade agreements are effectively forcing farmers in other countries to emulate our business models as we undercut their prices. The irony, of course, is that the US is moving back towards local and organic farming just as farmers in other countries are being forced to give up local and organic farming. (UPDATE: Costa Rican voters narrowly approved the trade agreement.)

So I think this period of “flatlash” was not only inevitable but also positive, and will lead to smarter globalization in the years ahead.

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