Globalism: The New System

Globalism is not presented here as a prescription for a cure all. Nor is it a harden agenda to replace what the Bush administration has implemented as policy. I say Globalism is what makes our current Presidents ideology anathema. Globalism demands the need for leaders to account for a broader range of dynamic forces and to be humble in changing course when policy fails.

Globalism is a perspective, a set of tools to help describe and interact with the current global landscape and those tools will change because the world is a dynamic place that no single source can dominate. I propose Globalism as an approach to discussing foreign policy which will inform the United States as it constantly updates policy to interact with a new global system. This is a call to broaden the American focus from a “War on Terror” to a more sophisticated public discourse on foreign policy.

I dare to suggest that Globalism is closer to a Big Tent where the WTO should sit down and talk to protestors about what is going on in the world and become accountable to their actions. If they can’t actually sit down and speak, a blue sky dream to be sure, a public discourse grounded in Globalism will at least set the table for these opposed view points to be shared. Meanwhile, the mantra ‘War on Terror’ accounts for neither perspective. If Globalism is embraced as a national public discourse we can begin to weigh the positive and negative effects of our actions in this big global marketplace.

I would say globalism is a fact, the state of affairs, and that terrorism is but one facet of the machinery that is operating in the world. The ‘War on Terror’ turns Globalization on its head, picks out one facet of the new reality, emphasizes that one aspect in order to perpetuate Cold War values so that the U.S. military-industrial-complex remains the dominant force of this new world order. I contend that the threat of terrorism has less of an impact on your daily life than United States trade relations with China. Globalization is a perspective you will never hear from George Bush’s bully pulpit of fear and deceit. We need our national discussion to be raised above this petty tribalism where the ‘evil doers’ are pitted against the ‘patriots’. The continued support of this Imperial Presidents platform will do nothing but stunt the United States adaptation to this brave new world.

“China Sets Goal of Selling Roses to All the World”
From the New York Times front page, September 25, 2006, by Keith Bradsher

“Americans and Europeans are used to buying mass produced shoes, toys and microwave ovens from China. So why not roses?

“That is the thinking behind an elaborate Chinese government effort to export cut flowers, aimed not just at developing a new business to take on the world but at redeveloping the social and economic landscape here in southwestern China.

“By placing the flower industry, along with several others, far from the coastal provinces that have enjoyed most of the nation’s prosperity, Beijing officials hope to bring jobs to tens of millions of impoverished, isolated workers in a bid to narrow the income gap between rich city dwellers and unemployed farmers.”

The first sustained exports of Chinese flowers arrived in the United States last week.

Here is a quote from Jacob Frenkel, governor of Israel’s Central Bank and a University of Chicago-trained economist. Frenkel remarked that he too was going through a perspective change: “Before, when we talked about macroeconomics, we started by looking at the local markets, local financial systems and the interrelationship between them, and then, as an afterthought, we looked at the international economy. There was a feeling that what we do is primarily our own business and then there are some outlets where we will sell abroad. Now we reverse the perspective. Let’s not ask what markets we should export to, after having decided what to produce; rather let’s first study the global framework within which we operate and then decide what to produce. It changes your whole perspective.”

Today I’m presenting a consolidation of the first two chapters of Thomas Friedman’s book The Lexus and the Olive Tree, edition 2, April 2000. This book is the first place to my knowledge that suggests and offers a framework to begin the project of ‘Globalism as approach to Foreign Policy’.

Opening Scene : the World is Ten Years Old

The slow, fixed, divided Cold War system that had dominated international affairs since 1945 had been firmly replaced by a new, very greased, interconnected system called globalization. If we didn’t fully understand that in 1989, when the Berlin Wall came down, we sure understood it a decade later. Indeed, on October 11, 1998, at the height of the global economic crisis, Merrill Lynch ran full-page ads in major newspapers throughout America to drive this point home. The ads read:

The World is 10 Years Old
It was born when the Wall fell in 1989. It’s no surprise that the world’s youngest economy—the global economy­— is still finding its bearings. The intricate checks and balances that stabilize economies are only incorporated with time. Many world markets are only recently freed, governed for the first time by the emotions of the people rather than the fists of the state. From where we sit, none of this diminishes the promise offered a decade ago by the demise of the walled-off world…The spread of free markets and democracy around the world is permitting more people everywhere to turn their aspirations into achievements. And technology, properly harnessed and liberally distributed, has the power to erase no just geographical borders but also human ones. It seems to us that, for a 10-year-old, the world continues to hold great promise. In the meantime, no one ever said growing up was easy. (page xvi)

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The formally divided world that emerged after World War II was then frozen in place by the Cold War. The Cold War was also an international system. It lasted roughly from 1945 to 1989, when, with the fall of the Berlin Wall, it was replaced by another system: the new era of globalization we are now in. (page xvii)

American power after World War II deliberately set out to forge an open international trading system to stimulate employment and counterbalance Soviet communism. It was America that drove the creation of the International Monetary Fund, the General Agreement on Tariffs and Trade (GATT) and a host of other institutions for opening markets and fostering trade around the world. And it was the American fleet that kept the sea lanes open for these open markets to easily connect. So when the Information Revolution flowered in the late 1980s—and made it possible for so many more people to act globally, communicate globally, travel globally and sell globally—it flowered into a global power structure that encouraged and enhanced all these trends and made it very costly for any country that tried to buck them. (page xix)

Samuel P. Huntington, author of The Clash of Civilizations and the Remaking of World Order, viewed, with the Cold War over, we won’t have the Soviets to kick around anymore, so we will naturally go back to kicking the Hindus and Muslims around and them kicking us. He implicitly ruled out the rise of some new international system that could shape events differently. For Huntingon, only tribalism could follow the Cold War, not anything new.

My argument is different. I believe that if you want to understand the post–Cold War world you have to start by understanding that a new international system has succeeded it—globalization. That is “The One Big Thing” people should focus on. Globalization is not the only thing influencing events in the world today, but to the extent that there is a North Star and a worldwide shaping force, it is this system. What is new is the system; what is old is power politics, chaos, clashing civilizations and liberalism. And what is the drama of the post–Cold War world is the interaction between this new system and all these old passions and aspirations. It is a complex drama, with the final act still not written.

That is why under the globalization system you will find both clashes of civilization and the homogenization of civilizations, both environmental disasters and amazing environmental rescues, both the triumph of liberal, free-market capitalism and a backlash against it, both the durability of nation-states and the rise of enormously powerful nonstate actors. (page xxi)

I believe the best way for us to deal with the brutalities of globalization is by first understanding the logic of the system and its moving parts, and then figuring out how this system can benefit the most people, while inflicting the least amount of pain. (page xxii)

Chapter 1: The New System

When I say that globalization has replaced the Cold War as the defining international system, what exactly do I mean?

I mean that, as an international system, the Cold War had its own structure of power: the balance between the United States and the U.S.S.R. (page 7)

The globalization system, unlike the Cold War system, is not frozen, but a dynamic ongoing process. That’s why I define globalization this way: it is the inexorable integration of markets, nation-states and technologies to a degree never witnessed before—in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations and nation-states farther, faster, deeper, cheaper than ever before. This process of globalization is also producing a powerful backlash from those brutalized or left behind by this new system.

The driving idea behind globalization is free-market capitalism­—the more you let market forces rule and the more you open your economy to free trade and competition, the more efficient and flourishing your economy will be. Globalization means the spread of free-market capitalism to virtually every country in the world. Therefore, globalization also has its own set of economic rules­—rules that revolve around opening, deregulating and privatizing your economy, in order to make it more competitive and attractive to foreign investment. (page 9

Indeed, if the Cold War were a sport, it would be sumo wrestling, says Johns Hopkins University foreign affairs professor Michael Mandelbaum. “It would be two big fat guys in a ring, with all sorts of posturing and rituals and stomping of feet, but actually very little contact, until the end of the match, when there is a brief moment of shoving and the loser gets pushed out of the ring, but nobody gets killed.”

By contrast, if globalization were a sport, it would be the 100-meter dash, over and over and over. And no matter how many times you win, you have to race again the next day.

To paraphrase German political theorist Carl Schmitt, the Cold War was a world of “friends” and “enemies”. The globalization world, by contrast, tends to turn all friends and enemies into “competitors.” (page 12)

Globalization has its own defining structure of power, which is much more complex than the Cold War structure. The Cold War system was built exclusively around nation-states. You acted on the world in that system through your state. The Cold War was primarily a drama of states confronting states, balancing states and aligning with states. And, as a system, the Cold War was balanced at the center by two superstates: the United States and the Soviet Union.

The globalization system, by contrast, is built around three balances, which overlap and affect one another. The first is the traditional balance between nation-states. In the globalization system, the United States is now the sole and dominant superpower and all other nations are subordinate to it to one degree of another. The balance of power between the United States and the other states, though, still matters for the stability of this system. And it can still explain a lot of the news you read on the front page of the papers, whether it is the containment of Iraq in the Middle East or the expansion of NATO against Russia in Central Europe.

The second balance in the globalization system is between nation-states and global markets. These global markets are made up of millions of investors moving money around the world with the click of a mouse. I call them ‘the Electronic Herd,’ and this herd gathers in key global financial centers, such as Wall Street, Hong Kong, London and Frankfurt, which I call ‘the Supermarkets.’ The attitudes and actions of the Electronic Herd and the Supermarkets can have a huge impact on nation-states today, even to the point of triggering the downfall of governments. Who ousted Suharto in Indonesia in 1998? It wasn’t another state, it was the Supermarkets, by withdrawing their support for, and confidence in, the Indonesian economy. You will not understand the front page of news-papers today unless you bring the Supermarkets into your analysis. Because the Untied States can destroy you by dropping bombs and the Supermarkets can destroy you by downgrading your bonds.

The third balance that you have to pay attention to in the globalization system—the one that is really the newest of all—is the balance between individuals and nation-states. Because globalization has brought down many of the walls that limited the movement and reach of people, and because it has simultaneously wired the world into networks, it gives more power to individuals to influence both markets and nation-states than at any time in history. Individuals can increasingly act on the world stage directly­—unmediated by a state. So you have today not only a superpower, not only Supermarkets, but you now have Super-empowered individuals. Some of these Super-empowered individuals are quite angry, some of them quite wonderful but all of them are now able to act directly on the world stage.

Without the knowledge of the U.S. government, Long-Term Capital Management­—a few guys with a hedge fund in Greenwich, Connecticut­—amassed more financial bets around the world than all the foreign reserves of China. Osama bin Laden, a Saudi millionaire with his own global network, declared war on the United States in the late 1990’s, and the U.S. Air Force retaliated with a cruise missile attack on him (where he resided in Afghanistan) as though he were another nation-state. Think about that. The United States fired 75 cruise missiles, at $1 million apiece, at a person! That was a superpower against a Super-empowered angry man. Jody Williams won the Nobel Peace Prize in 1997 for her contribution to the international ban on landmines. She achieved that ban not only without much government help, but in the face of opposition from all the major powers. And what did she say was her secret weapon for organizing 1,000 different human rights and arms control groups on six continents? “E-mail.” (page 14)