Sunday, 11 December 2016

PRINCESS DIANA AND GLOBALIZATION

Is globalization good or bad for mankind?

An anonymous wit once wrote a definition of globalization based on the tragic death of Princess Diana. It went like this:

An English princess with an Egyptian boyfriend crashed in a French tunnel, while riding in a German car with a Dutch engine, driven by a Belgian who was drunk on Scottish whiskey. He was followed by Italian paparazzi on Japanese motorcycles. She was treated by an American doctor using Brazilian medicines. This information was sent to me by a Canadian using American computer technology including Taiwanese chips and a Korean monitor, all assembled by Bangladeshi workers in a Singaporean factory after being transported by Indian truck drivers, after being unloaded by Sicilian longshoremen, and after previously being transported by Mexican illegals. And that my friend is Globalization.

The globalization/Princess Diana social media post and circulating email has been doing the rounds for years. It has been shared and liked millions of times by people who believe that it sums up globalization in a nutshell. The inference being that globalization is worse than bad. It is evil. Also, circulating with the globalization claim is the other viral claim that Princess Diana was murdered. That claim must also reinforce the globalization claim since she could not have been murdered without the help of a Russian agent and a Swiss banker.
International trade is generating prosperity
on a scale never before seen

But let’s not be diverted away from globalization. Is it good or bad for mankind?

Overwhelmingly, the people of the world are afraid of globalization. Powerful organizations have been formed both to fight it and to promote it. Globalization is a word used to encompass free international trade, international investment, free movement of labor, aiding financial conspiracies, and adherence to international rules for conducting business and the affairs of governments and people. Often it is summed up as one-world government as a means of extending the power of the already powerful over the less powerful.

But let’s use Diana’s case to see what would happen in a world that was entirely without any kind of globalization.
Land and sea trade routes have been bringing
wealth to populations for thousands of years

We can assume that Diana, being an ex-Royal, would have had the means to travel to France. But she would have had to drive in a French car. Her British car, like the German car, would be a prohibited import in an unglobalized France. Every part of the car would have to be French-made including the rubber tires. Now here the French would have a problem. They could try starting a rubber industry in France, a land that is too cold to grow rubber trees, or they could license and tax the importation of rubber. No. That wouldn’t do. That would be too expensive and the people would see it as just a small step away from globalization. Then there would be the problem of powering the French car without importing fuel. France’s Total oil brand would not exist because that would involve investment in protected markets in Canada, Iran and North Africa and those markets would ban trade with other countries, including France. Oh, well, France would have to revert to steam to power its cars. But, unfortunately, France has less than 1% of the world’s coal reserves and 66 million people are not going to drive far on that resource. It would be unthinkable to have to import another country’s coal. That would be making the rich richer while the poor Frenchman gets poorer. That would be exploitation. But in a deglobalized world there would be no mass production of anything. Designing cars, making the materials and building the finished product would be a cottage industry where one man working pre-industrial revolution hours, would produce one completed car every five or ten years, and then find that it was so expensive that no-one could afford to buy it.
HIGHWAY AMERICA

Let’s not labor the point about cars being impractical without international trade. Let’s move on to the Belgian driver. Unfortunately, in a deglobalized world, there would not be a Belgian living or working in France. As for the Scottish whiskey that the driver is reputed to have become sozzled on, it would take someone with the business acumen of Al Capone to get the bottle into France, in a deglobalized world. The Scots would have to drink it all themselves. On the positive side, deglobalization would stop the spread of haggis, bagpipes and tartan trousers.

To be serious, the tragedy in Paris is merely a reflection of the normal world and the way it operates. We do live in an international world where the free movement of goods and services and people is becoming the norm. Throughout history the greatest trading nations have always had a larger proportion of their people enjoying a better standard of living than nations that existed in seclusion. The trickle-down principle really does work, even though it is one of the most ridiculed tenets ever espoused. A person with ideas, initiative and access to money can start a business that employs dozens. His success will be shared by all. But the dozens will rarely succeed if they attempt to run the business without the founder. They need each other for all to prosper. But I’m digressing again.

To return to globalization, the example of the Diana tragedy and how it may have had international implications, is an excellent example of how the world really works and how wealth is shared among nations and among peoples. We hear many claims why people in the twenty-first century are living longer than ever before. Medical science certainly plays a huge part in that, but nothing has made increased longevity possible more than modern inventions, improved working conditions and increased discretionary spending power. The international movement, of ideas, goods and service, and people, has been crucial to the better world that we live in.

We have looked at how the production of one product, the car, would be affected in a world where countries did not trade with each other. Without international trade, the world would still be using hand-carts. But let’s look at what would happen if individual countries split up into independent regions with trade and labor barriers. Supposing the United States was to revert to the thirteen states again; if North Carolina was unable to trade with South Carolina, and if you were born in one state and were prohibited from working or starting a business in another state. Can you imagine the poverty that would strike everyone, 
regardless of station? Take it a step further. What would be the point in stopping one city from trading with another? Can you imagine the hardship if the people of Philadelphia were prohibited from trading with the people of Pittsburgh, both cities in the same state?

Anyone who can understand that applying tighter stranglehold barriers and borders would be economically disastrous, must also be able to understand that pushing out the market limits is infinitely better than keeping the existing barriers and borders in place.  Nothing can ever help more people to get a fair slice of the cake than trade and employment.

So, to return to the original question; is globalization good or bad for mankind? My answer is good. But people persist with the mistaken notion that there is something rotten going on. Well, something rotten is going on, and it’s going on on social media and fake news sites. The rot has seen the UK vote to leave the EU. In America, they have just voted for the man who will lead their country out of the Trans Pacific Partnership. The borders are closing when they should be expanding. Poor people are going to get poorer when they could be getting onto the lower rungs of wealth.

 That is an infinitely greater tragedy than the crash in the Paris tunnel.