January 20, 2011

Globalization redux

I think if Thoreau were suddenly to appear on the scene today, it would take him a while to get his bearings, certainly, but he would get a handle on globalization eventually and would recognize it for what it is: another unsustainable instance of mankind becoming the tool of its tools. He warned against that over and over in Walden. As with so many of the developments in modern civilization, human society has adapted its living arrangements to what is technologically possible. Thus, in the "gee whiz" writing of essentially shallow and unscientific thinkers like Tom Friedman, the circumstance that a technology like fiber optic cables can be used to hook up faraway call centers so that formerly poor peasants in Bangalore can answer your questions about your Dell Computer is something that has to be done because it's possible to do it. First the technological breakthrough, then the adaptation of society.

In a similar, lower-tech way, the fact that American businesses can open factories in China and other Asian and Latin American countries where the cost of labor is much lower, and the environmental damage can be treated as someone else's "externality," means that this has to be the way to go. Again, because it can be done. Following on such massive integration of the world's economies, it is only natural that the financial systems should be melded into banking behemoths like the World Bank and the International Monetary Fund, which act as proxy governments and fiscal armies for the developed world to control the economies in the Third World. Such integration can lead to very severe unintended (although inevitable) consequences such as runaway inflation in countries such as Tunisia (and now spreading to the Middle East) causing food riots, as the money printing by the West slops over into vulnerable economies where the peasantry is forced to spend upwards of 50% of their income for food and water. Also, when one large economy engages in systematic financial fraud, as the United States did during most of the period 2000 to 2008, the entire world economy is brought down because of all the monetary and economic connections among the various nations.

One is accused, of course, of being a Luddite and an unrealistic person if you assert that this state of affairs is a kind of consensus insanity. It is complex beyond human control or comprehension, it is inherently unstable and subject to Black Swan events, and it's a drag to think about it all. It is defended primarily because those in a position to profit from the complexity and integration control the organs of government and power, such as the U.S. Congress, a wholly-owned subsidiary of Lower Manhattan.

A different question would be posed by Henry David Thoreau: is it a good way to live?

One of the major victims of globalization has been the American economy. With the full complicity and even enabling of the U.S. government, the industrial economy of the United States has been hollowed out and made dependent on inputs of recycled fiat money that American citizens sent abroad in the first place to (a) buy things we don't make anymore or (b) buy things we're running out of and refuse to replace, such as oil. The typical answer to such observations is that, well sure, it's unfortunate that the U.S. is sinking in terms of its output, its educational and quality of life standards, and that it bases its economy now on financial swindles and money printing, but hey - that's just the way the modern world is. The USA cannot be an island. Instead, we should be grateful that our largest employer, Wal-Mart, stocks a lot of stuff we don't really need, all made in China, and sells it to Wal-Mart employees whose money is sent to China so that it can be reinvested in U.S. Treasuries and then doled out to banks who can lend it to Wal-Mart employees who want to buy an inflated-price McMansion and live in it for a couple of years until they lose it to foreclosure. Or so the system used to work until a few years ago. Now it doesn't work at all. The Chinese cannot even lend us enough so we've taken to buying our own debt and calling the process "GDP growth."

A moment's reflection reveals that this answer cannot possibly make any sense. If one thinks of the USA more as a commune and less as a switchboard and "platform" for the wealthiest 1% to take advantage of globalism to achieve a lifestyle unavailable to the other 99% (and to widen that gap year by year), one can see that the United States, more than virtually any other country, does in fact have the complete wherewithal to sustain itself with only moderate inputs from the rest of the world. (Note to the NSA: I'm using "commune" not in the sense of Karl Marx, but perhaps more in the sense of collective action, as in a kibbutz or similar communal arrangement.) We export food because we raise more than we need. We are in a latitude almost uniquely favorable to massive development of solar and wind power. Instead of selling off our 3rd largest solar power manufacturer to China (as is contemplated in the Obama-Hu meetings underway now), we could build a huge alternative manufacturing industry here. We could revive what was once the greatest railroad system in the world.

In short, we have everything necessary to sustain our vital heat, with a lot of margin left for building the necessary complements to a full life. It isn't necessary at all to go all-in on this globalization insanity. Water seeks its own level, and what we are allowing the U.S. to do is to sink to a level commensurate with the wretched of the Earth so that an elite which profits from global integration can continue to get obscenely rich.

If the Tea Party, or someone, could figure all that out, we could start moving away from unstable, unprofitable complexity and toward self-reliance and a sane life. The problem, however, is that as C. Wright Mills told us many years ago, the governing principle of those in power is to make decisions which tend to perpetuate their power. Thus, change will come about, in the American instance, following collapse, when there is no other choice.

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