Globalization is dead and no one is listening

https://interconnected.blog/globalization-is-dead-and-no-one-is-listening/

by synergy20 • 4 years ago

159 230 4 years ago

ecolonsmak• 4 years ago

I've been reading Peter Zeihan's book , "the end of the world is just the beginning" the death of free trade being the central theme a near future where the US has abandoned policing the seas and formerly interconnected economies localize in response. Began reading it slightly sceptical of the premise but anecdotes like this above are adding up to a near term 30-50 year that might resemble a global contraction amongst trading relationships.

MR4D• 4 years ago

I highly recommend going back and reading The Accidental Superpower as well. Considering it was written a decade ago (pub. 2014) it’s amazing how correct he’s been in forecasting things.

To be clear, there is a certain fuzziness in timeframes, and he mentions that, but in general, the timing he mentions is scarily accurate.

One thing that I saw earlier this year was Sri Lanka. Many others will follow in various levels of degradation over the coming years.

diego_moita• 4 years ago

Reading the book too.

It is a very interesting read, I highly recommend. The guy knows a lot and it has lots of interesting information.

But I am not convinced. I think his approach is just too American, in particular, when it comes to China. I am not American and, sometimes, his jingoism is just too much.

pkaye• 4 years ago

A lot of what is happening makes sense from a national security perspective. If the global supply chains get broken how much can a country continue to function.

Like Germany cannot produce enough ammo because it depends on cotton from China.

https://asia.nikkei.com/Politics/Ukraine-war/Germany-struggl...

US onshoring cotton production.

https://www.youtube.com/watch?v=eUdIz21P7zE

la64710• 4 years ago

I think we ought to take a longer term perspective of things and acknowledge the cyclical nature of things. It is interesting and somehow I think there must be a science behind all this.

BlueTemplar• 4 years ago

Systems theory ? Cybernetics ? Cliodynamics ??

jandrese2• 4 years ago

There are a lot of grumpy people who see a headline like this and say "good". From their perspective globalization is just a way for companies to export jobs to countries with looser labor standards that allow the corporations to treat them like slave labor and avoid environmental and ethical regulations in the host country while also killing off a whole job segment of honest union factory jobs that support a robust middle class.

conorcleary• 4 years ago

Ask people to explain how vehicles tires are made (from raw resource to manufacture and distro) and suddenly globalization makes sense - it's the only way toward the future. Subtext is required to discern what is good and bad about it.

We need to teach students of all ages some lessons about logistics and supply chain - not only will they better understand how the world functions but that there are career and business opportunities at every node.

yamtaddle3• 4 years ago

There's globalization-the-way-things-are-made-now, and there's globalization-the-neoliberal-trade-policy-that's-dominated-US-politics-since-the-80s.

The former's a fact, the latter's... less so, and has been pretty unpopular among voters on both "sides of the aisle" more often than not for the entire time it's been the driving force behind US trade policy (the donor and think-tank sets love it, though, is why it's persisted regardless).

Trump's the only big-two-party Presidential candidate I can recall in that whole time span who ran on strongly anti-neoliberalism (so, anti-globalization, in the pop-culture, colloquial sense of globalization) messaging, which worked pretty well for him since most R voters (and a good chunk of true-swing, and actually a lot on the left though they mostly wouldn't have voted for him for other reasons) more-or-less hate neoliberalism—regardless of the movement's merits, it's unpopular.

adventured2• 4 years ago

it's the only way toward the future

The primary matter is not globalization or no globalization, it's about what balance and for which countries and industries. These things will constantly shift back and forth, the pendulum will over-swing as it does.

Just because N amount of globalization makes sense, that doesn't mean the extent we have at present, and its composition, makes the most sense. And obviously that (what makes sense) will vary significantly by the national interest of a given country based on its culture and stage of development. The world is filled to the brim with competing interests and that will never change, some benefit more or less from more or less globalization.

tenebrisalietum• 4 years ago

These people also complain when stuff that was cheap isn't cheap anymore, and also when their own people don't want to work the crappy domestic jobs--one or two steps above slave labor--that imported labor did.

Analemma_2• 4 years ago

And those people are in for an unpleasant surprise when this onshoring actually gets underway:

In Morris Chang’s own estimation, the chips produced from TSMC Arizona may cost “at least 50% more” than the chips from TSMC Taiwan. Will TSMC pass on that cost to Apple or let it eat into its margins? Will Apple pass on that cost to consumers or let it eat into its margins? No one knows right now, but as TSMC Arizona starts churning out wafers, we will know soon enough.

Jobs back in America is great in the abstract, until you have to pay for it. If everything in your life costs 50% more, then your effective income has fallen by a third. Are people actually going to be ok with that? We'll see.

gedy• 4 years ago

If everything in your life costs 50% more, then your effective income has fallen by a third. Are people actually going to be ok with that? We'll see.

This already happens with the non-outsourceable stuff that's more expensive (housing, medical, education, etc). So who TF cares if flat panel TVs or Phones cost more? Not me TBH.

jay_kyburz• 4 years ago

The price of things is so weirdly distorted at the moment because somethings can't be outsourced to cheap slave labor.

I can buy a new laptop for the same price as getting a plumber come and clear the roots from my drain.

It's cheaper to throw things out and buy new ones than repair them.

ren_engineer2• 4 years ago

everything is a tradeoff, look at what happened during the Pandemic when we couldn't get ANY chips because of the supply chain issues.

For economics the tradeoff is between efficiency and resiliency. Global supply chains taking advantage of comparative advantage are efficient but can collapse from a single link in the chain failing. In this case the US is sacrificing cost efficiency for reliability.

Following your strategy is how you end up with Europe relying on Russia for energy, huge long term Black Swan potential in return for marginal savings in the short term

bombcar• 4 years ago

Estimates are an M1 processor costs about $50.

The original Intel processor (Core duo?) was somewhere in the $150-200 range, apparently, in 2006 dollars (but let's assume inflation doesn't exist).

So the CPU is already 1/3 the price, a 50% increase doesn't even get it close to what it had been in the past.

IMSAI8080• 4 years ago

Onshoring is really directed at goods that some other country might use an economic weapon by restricting supply. 99% of stuff doesn't fall into this category. No one cares if coffee mugs and pens are made in China. So you wont see rises there. It's not really the end of globalization for the vast majority of stuff. Of the stuff that remains, you have to consider what fraction of the value chain is actually going to a "problem" country. Often it's the final assembly. On a mobile phone that might be $10 of the store price. So manufactured in a more expensive low wage country at $15, you probably won't notice. Some of the chips in a phone are not made by TSMC but are made in South Korea, so probably no change there. Apple's A16 chip is particularly expensive and maybe costs $100 to make. So based on that TSMC quote, that's an extra $50, but they sell the phone at more than $1000. That article also seems to imply that some of that added cost is insufficient worker availability causing expensive training costs. That may change if there's a steady supply of jobs available. It is possible to make low cost electronics in high wage countries. The Raspberry Pi is made in Wales.

scohesc• 4 years ago

I think it'll mean that corporations will need to go back to making electronics, appliances, equipment, tools, etc. that actually last more than 3-5 years.

"Can't go and buy another TV off the shelf since they cost so much, guess I'll have to take my TV to a repair place and have it repaired because I worked so hard to get this one, and it's cheaper than getting a new one."

You'll see consumers want to get more lifespan out of their current devices/appliances/etc. and will be willing to pick brands that allow repairability, locally sourced parts, etc. etc.

adventured2• 4 years ago

Jobs back in America is great in the abstract, until you have to pay for it. If everything in your life costs 50% more, then your effective income has fallen by a third. Are people actually going to be ok with that? We'll see.

This is a short-sighted, narrow view of what's possible for a superpower.

HN isn't going to like this answer, but this is how the world actually functions and always will.

First, everything isn't going to cost 50% more. Most things can reasonably remain unchanged in terms of globalization, imports/exports.

How about the US strategically breaks most of the world's supply chains re chips after we build up our own production domestically? It provides a new, enormous point of leverage to wantonly undermine other powers that don't have that positioning. What if Taiwan's factories get turned to rubble by an assault from China, while the US factories keep running and then export, at greater cost, to the rest of the world (as with US natural gas recently)?

It's the oil / natural gas / energy scenario now that the US doesn't need the Middle East's energy. There will likely come a time in the near future where it's beneficial to destroy the House of Saud in the style of Syria, to damage China and others (look the other way while a very violent civil war breaks out to topple the kingdom, wiping out the majority of their oil production). The US can afford a global energy shock in a way that most of the rest of the world can't, which has recently been demonstrated in the gap between the prices in the US and the prices in Europe due to the Russian invasion of Ukraine.

If the US can meet its own chip demand, new options open up strategically on the table for a superpower to damage its enemies. The US can better afford a conflict in and around Asia, the less it depends on Asia for eg chips.

Energy, chips, USD, weapons. Moats for a superpower.

2devnull• 4 years ago

There’s also people in the right who say good. These people seem to be focused on geopolitical stability ie defense.

neon_electro• 4 years ago

Something tells me GP meant to indicate tongue-in-cheek that the "grumpy" people are the people in the right ;)

recursivedoubts• 4 years ago

they may be grumpy, but, in fairness, they have a point

maybe that's why they are grumpy

sottol• 4 years ago

I don't think undoing globalization is going to mean going back to the old ways. Personally, i think those well paying middle class jobs are gone, the status quo is too enshrined in the minds of business leaders, political thought (not just politicians, the populace) and the economy.

The end of globalization will be more of the status quo, but different, not how it was once was in the golden years after WW2. If i had to guess, same global companies, some of the workforce still making 10-100x the average salary but now many of the low-paying jobs simply onshored, maybe even furthering the socio-economic divide because you won't be able to buy an American-made 60" TV for $800 anymore.

citilife• 4 years ago

I see what you are saying, but I think you're incorrect.

What's more likely to happen in my mind is that there will be fewer people running factories. Recall, right now slave labor makes up a large amount of what you use. To adjust for that, you'll have to maximize worker productivity.

That means more factories (potentially smaller and / or more generalized) and automation building various parts / equipment. Assembly often occurred in the host country anyway, so I don't see that changing too much. It'll be the tool and part making that'll have to return to places like the United States.

I do think cost of goods will be high if we don't loosen some of the regulations, we need to keep people safe, but I think there's a balance.

The reason people think it'll be an improvement has to do with competition. If there's a market for a set of goods here, it'll be filled. It may start off expensive, but as automation improves the process you need less workers and more machines. That's fine and eventually the product will be cheap to produce, but the people producing the good will be highly skilled (i.e. be well paid).

Where I'm living there's a lot of factories. Salaries range from 65-110k in the factory work, all of which would be considered good wages in an area where the average home price is $300k (with low taxes).

nimbius• 4 years ago

the "good old days" were a time when capitalism itself was made to capitulate to the post-war reality of an America that very much distrusted the idea of the free market itself. Major companies like GE and Dow Chemical bankrolled themed rides and attractions at Disney not because they had the marketing budget, but because most Americans emerging from the great depression and the new deal had found themselves accustomed to the concessions they had made during their time in the bread lines.

Americans had to be bought, in a way. Excellent pay, generous time off, and pension retirement was all on the table as industry bent the knee to capital that threatened slipping back into a pseudo-agrarian role after the war and in doing so rob the barons themselves of the capital they sought to exploit. By the seventies things had turned around. capital was eager to return to its former position of exploit, anyone from the WW2 era had been sufficiently promoted to leadership and their kids placated with the same, and Reagan-era liberalization could return the globe to various states of servile production and slave-classery oncemore.

The death of globalization is stymied by major hangovers of the cyclical crashes of global capitalism itself. in the eighties stagnant wages meant everyone got a credit card, and in 2008 amidst the credit crash it meant everyone got free money in the form of low and no interest. the red flag of the death of globalism should have been when equifax and other houses of the guild of credit made the shift to stop factoring medical bankruptcy at all as part of the credit report. another factor hindering globalizations death is the collective disinterest in considering real unemployment in favour of fanciful mathematic aerobics designed to appeal to policymakers and the very market such a KPI could inform. US unemployment judged at the U6 rate is more than six percent and compounded by other factors such as medical debt, undischargeable student debt, and once again stagnant wages and this doesnt even begin to cover things like COVID rent freeze debt and the chronic effects of the methamphetamine and opoid addiction crisis in the US still ongoing today. 2023 also sees the expiration of covid rental protections in numerous major states, which will likely drive up homelessness and unemployment oncemore.

Finally theres the rampant inflation that not even a return to Clinton era interest rates seems capable of stopping. So if anything we'll probably "bail out" globalism before we advance past it.

roody15• 4 years ago

Why are they necessary grumpy. Its kind of true.

Lets look at Apple for example. They tout and market ideas of privacy, green energy, recycling, progressive social values etc... In reality they use slave labor in India and China that adhere to very little environmental standards. They also are not unionized.

As long as the concept of a corporation is based on a legal obligation to maximize profit.. then "globalizing" this structure will not necessary "improve" the world on a social or environmental level.

at-fates-hands• 4 years ago

> In reality they use slave labor in India and China that adhere to very little environmental standards.

I would also add a lot of US companies export their toxic waste to China and India as well - then tout how much better we're getting as a country tackling climate change.

zimzam• 4 years ago

Apple does include their supply chain in their labor & environmental reports: for example when they catch underage workers they get sent to school at the supplier's expense.

Many companies outsource their externalities but Apple isn't a good example of it.

null_object• 4 years ago

Lets look at Apple for example

Would be great - just once - to read a discussion on HN that didn’t drag in an attack on Apple.

Guess that’s too much to hope for.

jlokier• 4 years ago

As long as the concept of a corporation is based on a legal obligation to maximize profit..

That's not actually true, and never has been. Corporate law is more nuanced and flexible than that.

If we're talking about how to improve the world using corporate structures, there are also more options, such as corporations with obligations to non-shareholder stakeholders representing the environment and employees human rights, for example.

http://in-houseblog.practicallaw.com/fallacy-of-the-duty-to-...

https://www.thesustainableinvestor.net/blog/2016/02/23/fact-...

https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...

https://www.legislate.tech/post/does-the-law-require-public-...

6510• 4 years ago

I'm not grumpy but companies do export jobs to countries with "looser labor standards" and perhaps treat employees like slave labor (or actual slaves!) but more importantly lower salaries. Other [competing] companies who didn't export their jobs will still have to compete in the same market. If the product involves enough labor we cant pay very good salaries. The other company must now do the same. It is like multinationals are not sneakily trying to avoid taxes, if it is possible and everyone else is doing it they must also do it.

The "robust middle class" is a misconception. Jobs just vanish which renders people without any income and it pushes salaries down where products are not very labor intense. It would be preferable to scale down all salaries to match those paid in other countries. At least people would have work! (which isn't actually all that important) The political wiggle room is not sufficient to lower the salaries to you know 1 dollar-ish per day or anything in that direction.

The real issue is that people in all those other countries get to elect or otherwise install their own law makers or dictators. We have been unable to manufacture good law makers, dictators and other rules. They are of unbearably low quality, their price can be in the hundreds of millions of lives. You would think at prices that high you would get a decent product but nothing could be further from the truth.

You could have their country men make your pants, your shoes, your computer, your food, your bed, your car, your... your... everything and they will do it really cheap, big profit margins for the companies.

And then, one day, it all ends or it might not end but they may make any demand, however insane the implications you would have to suck it up or at least consider sucking it up with the alternative being no pants, no shoes, no computer, no food, no bed and no car - all simultaneously!

We are currently trying the no gas thing here in the EU. It seems an obvious problem but then prices are going all the way up even in countries that produce their own gas!?

Not having pants or shoes might be the least of your problems.

I'm not grumpy, I'm confused people trust Xi Jinping and Vladimir Putin that much. They logically have no reason to.

What you want is a world where each country can take care of it self and, if a crisis or natural disaster strikes we can be there for them.

If any one crazy ruler can take the whole world down the abys you would have to wonder why we build it like that?

Apofis• 4 years ago

Let us unchain ourselves from the politics of globalization and then we can proceed forward. Trade shouldn’t be a weapon.

n0mad01• 4 years ago

globalization is dead long live globalization.

tareqak• 4 years ago

No American, or any Western media outlet for that matter, bothered to cover this speech. Only Nikkei and a handful of Taiwanese outlets wrote about it. Not even C-Span carried footage of the speech. (And C-Span carries everything!)

I find this news to be extremely surprising: everyone talked about the success of having the TSMC fab open, but nobody cared to listen to what the founder and former CEO of the company had to say. The fab might as well not be owned by TSMC.

update:

1 . former CEO. Thank you `astroalex. https://en.wikipedia.org/wiki/Morris_Chang .

astroalex• 4 years ago

He is no longer the CEO.

thephyber2• 4 years ago

The fab might as well not be owned by TSMC.

Something similar happened with FoxConn in Wisconsin around 2018. Lots of talk about on-shoring factories, but that one was built and sits idle (last I heard it was partially converted to office space).

TSMC didn’t build US You fabs before. They are doing it now because the US government is throwing some money at a few current generation fabs to mitigate the geopolitical risk of Taiwan. The fact that TSMC owns it is almost incident for them.

But this is a mistake. We should be fixing the upstream reasons why TSMC didn’t want to build these fabs in the US prior to recent large government subsidies. Making sure local governments and NIMBYs have only a small amount of veto power, making sure there is a safe disposal system for the byproducts (the original reason chip fabs left the SF Bay Area), and making sure we are training the specialties required to build and run the current and next generation fabs. And in the case of the Arizona TSMC and Intel fabs, making sure there is sufficient fresh water for the region, which is needed to supply the fans and the local economy.

efficax• 4 years ago

No factory was built at all for foxconn in Racine county. A weird globe building was built that contains some kind of data center, although nobody knows for sure what goes on there. The whole thing was a complete boondoggle, although I don't know if anyone gained anything, it didn't even get Scott Walker re-elected.

https://www.theverge.com/23030465/foxconn-lcd-factory-wiscon...

Hopefully this TSMC thing is real and not just a game around tax credits. Kind of bonkers to me to build it in the desert as the colorado river is drying up if water is so important, though.

midoridensha6• 4 years ago

We should be fixing the upstream reasons why TSMC didn’t want to build these fabs in the US

Good luck with that.

Making sure local governments and NIMBYs have only a small amount of veto power

This isn't really possible politically in the US. The US is all about corrupt little local governments having lots of power; it's the whole way the country is structured. Americans have historically hated centralized government. It's also a big part of why the police in America are so awful: there's almost no centralization or standardization, so no power of the national government to fix the problems.

hn_throwaway_99• 4 years ago

No American, or any Western media outlet for that matter, bothered to cover this speech. Only Nikkei and a handful of Taiwanese outlets wrote about it.

There were highlights of the speech, including "Globalization is almost dead" and "Free trade is almost dead" quotes, reported in the New York Times, which is where I first read about it:

https://www.nytimes.com/2022/12/06/technology/tsmc-chips-fac...

miguelazo4• 4 years ago

Perhaps the American/Western version of globalization has failed, but the Chinese version seems to just be getting started. In fact, the decoupling that the US is forcing upon China will be a boon to them in the long run, as they become even less dependent on the US and care less about sanctions on severely underserved markets with huge growth potential.

ren_engineer2• 4 years ago

China ironically follows a purer form of capitalism where they pretty much keep it strictly business. They don't try to push cultural change on countries they are trading with, it's just economics and things that benefit China the most

oliv__• 4 years ago

"They don't try to push cultural change on countries they are trading with, it's just economics"

Umm, what?

https://www.nbcnews.com/politics/national-security/us-univer...

among other things...

dartharva• 4 years ago

Can you give an example where a Western player explicitly pushed a culture change and its Chinese counterpart didn't?

asdajksah2123• 4 years ago

China will demand, for example, that only Chinese companies can work on a certain infrastructure project, and then that company will migrate workers from China to Africa, which has no shortage of cheap labor, to do the work instead of allowing its companies to hire people locally. There's nothing "capitalistic" about that.

arrosenberg• 4 years ago

Is that what their censors keep telling Hollywood?

"Guys, we want to keep this strictly business, that's why you have to change your movie the way Chinese state insists - puuuuuuure business."

tristor2• 4 years ago

Is that why every technology product has to be modified for the Chinese market and every single movie has to be edited for the Chinese market or edited before being made to be palatable for the Chinese market even globally? China's behavior is the exact opposite of what you state.

miguelazo4• 4 years ago

It’s naive to think that the US demands for cultural change are anything other than another tool to dominate. The US only does so when it serves its interests— favoring one political faction over another. It is happy to partner with plenty of the most oppressive regimes in the world, like the Gulf States.

yourapostasy• 4 years ago

The majority of progressive liberals when faced with mainstream Han Chinese ethno-nationalism would go into epileptic seizures. It's not as prevalent in the Tier 1 cities metros and the Tier 2 city cores, but wander outside of those areas (roughly 50% of the population), and the ethno-centrism is...not what the average HN reader is used to.

To be fair, much of the rest of the world is fairly similar, only differing in detail and degree. What makes it notable in China is the CCP's surveillance infrastructure makes it impossible for the CCP to not know about this, and their tacit condoning of the sentiments reveals the cultural dominance narrative they subscribe to.

You don't need to "push" cultural change when you are the 800-pound gorilla at the negotiating table. You only need to assume your world view is right, proper, due by merit and a birthright conveyed by thousands of years of "unbroken" culture, and the rest "falls into place".

CCP coercion does not look like US coercion does not look like EU coercion, etc., but it exists and is powerful all the same.

fmajid• 4 years ago

China is more accurately described as mercantilist. But in any case Xi Jinping has achieved absolute power, surrounded himself with yes-men and is busy dismantling China's economic success with his draconian zero-Covid policies that have done what no amount of US government pressure could: force Apple to move production to India and Vietnam instead because unreliable supply-chains is one thing it cannot abide, unlike human-rights abuses.

lunatuna• 4 years ago

I see some instability with China as it has grown a stronger domestic market, which is positive, but they are going to have to more directly deal with their inefficiencies. They are and will continue to struggle to export themselves out of their economic problems. This also relates to their internal inflation. Belt and road is good for importing materials and exporting cheap goods, but it isn't enough. Not sure if the Chinese middle class are going to be able to pick up the slack. The current leadership doesn't seem to care at the moment and expect everyone to sacrifice for the party.

I've seen this decoupling argument used in Canada a lot. It doesn't work very well there. The country is still completely dependent on the US market. They've tried Europe, Asia Pacific, and China, with a minimal budge in its current dependency. The disruption and economic pain are too high to force it in to existence and would be political suicide. Maybe the an authoritarian and central planning model can get over that in China? If the current internal investment inefficiencies are any clue, I would say no.

thephyber2• 4 years ago

I can’t figure out why China hasn’t priced themselves out of exports yet. Normally countries move up the value chain as their domestic standard of living improves and their currency strengthens. Then other countries find their exports unaffordable.

I know China has pegged their currency to the USD and only rarely begrudgingly let it float slightly. It seems to me that “the ledger” isn’t balanced and that something is being kept off the books.

nodesocket• 4 years ago

Peter Thiel has talked extensively about globalization and was ahead of the trend it seems[1]. Despite what feels like the majority of people on HN being pro-globalization, Covid and the War in Ukraine hopefully taught countries a good lesson in the power of domestic first and domestic focused production.

[1] https://www.cnbc.com/amp/2017/03/08/thiel-globalization-is-o...

woeirua2• 4 years ago

Globalization and free trade are dead because most of the promised benefits for the west failed to materialize. Yes, we got significantly cheaper goods, but one of the major promises was that free trade would liberalize the world. Instead, China has taken all the benefits and used our money to build a system of oppression that would make George Orwell blush.

Globalization will live on, but only for countries who align themselves with the west.

pishP05h2• 4 years ago

Meanwhile in the US we’re not allowed to care anyone else exists by putting more research and economic agency into better healthcare.

We tacitly decided no one is worth keeping alive unless they coincidentally happen to be rich under a system intentionally funneling money to the top like all the rest.

Why care what anyone else has to say if their existence is not something I have an obligation maintain?

CodesInChaos• 4 years ago

Even in the West you have complications, like the Schrems II decision which ruled that the US does not offer an acceptable data protection level.

jfengel• 4 years ago

China indeed has an oppressive government, but it's not much like the impression you appear to be getting. Many Chinese are very happy with the system, especially given how poor they were not long ago. China has lifted many millions out of poverty, in a very capitalist way.

They don't have many freedoms you take for granted, like voting, but it turns out to be less fundamental than you imagine. If the regime does not oppress them they don't feel the need to change it.

Obviously there are horror stories, magnified by their control over media. But we Americans have our own horror stories, and worse, many ignore them despite the fact that they are quite well known.

China isn't the hell scape as it's often presented. Which actually makes them more dangerous to Western ideals and values.

e40• 4 years ago

I agree, but the fly in the ointment here is the behavior of CCP wrt to covid lockdowns. That is making the lives of people there much worse. The good news, it seems the government is finally easing the policies, but it is early days on that.

ipaddr• 4 years ago

They are being oppressed in a variety off ways each day that they are and are not aware of. Are people on China happier today because of additional wealth (but also additional pollution / increased loneliness)?

Surveying them would be like asking citizens in cold war era Russia if they are happier than before and if they are lacking what the west has. They might reject it but they don't fully understand what they are missing.

sidibe• 4 years ago

The reason China was able to develop so quickly after Deng Xiaoping was because they didn't do it earlier. The same rapid development happened in Taiwan, HK, and SK decades earlier because they didn't have to deal with Mao and his sycophants who kept throwing wrenches in the gears.

Xi is more in the Mao class of leaders than his predecessors (both are uneducated populists who are not interested in developing strong institutions). I wouldn't count on China continuing to do well until they find a way to smoothly and consistently replace non-totalitarian leaders, which I think is related to free press/speech, as leaders want to set precedents so they aren't persecuted by the next guy.

difosfor2• 4 years ago

We got much more out of it than China at first; basically thanks to a modern version of slave labor. We were just short sighted to think that would work forever and for some reason that doesn't really seem to be changing as we just dig in deeper into our old ideas.

nebula88043• 4 years ago

I suspect the answer to this question depends on if you are the upper middle class 'knowledge worker' that benefited greatly and achieved the American dream in the 21st century or a middle/lower middle class factory worker that now has a destroyed family legacy(due to drugs/suicide), a destroyed community, and an uncertain if any future.

ClumsyPilot4• 4 years ago

Expected liberalisation. Instead China has built a sotalitarian state
version of slave labor. We... thought that would work forever

We expected forever slavery and freedom simultaneously.. Sounds like our typical hypocracy. This checks out

nostrademons5• 4 years ago

I think we're about to find out just what globalization did for us. Globalization is what held down consumer prices as unprecedented amounts of money were injected into the global financial system over the last 13 years. Globalization solved our garbage problem - many municipalities are no longer offering recycling now that we can't ship it to China to dump in their fields. Globalization made the Internet much more useful - how many of you are fans of Factorio, Telegram, or World of Warships (all developed in former eastern bloc countries), or Alibaba or TikTok (both Chinese)? Globalization has led to unprecedented global peace over the last 30 years.

I suspect that once de-globalization really starts rolling along, we're going to see economic dislocations that are civilization-destroying. We won't get nation-states, we'll get civil unrest, regional secession efforts, anarchy, and war. Then some new form of political organization will arise, but I doubt it'll be either nation-states or globalization.

integricho• 4 years ago

This is an overly pessimistic extrapolation of current events and trends, your argument is pure speculation basically.

safety1st• 4 years ago

Everyone printed money like crazy, not just the Western governments, nations at all levels of development are paying the inflation price. I don't think that alone will change the balance of power meaningfully.

It's fair to say that less trade with a totalitarian rival power means less deterrent to war. Yes that's bad but the alternative of financing their military buildup and their oppression of their own people is not really a good one.

rrrrrrrrrrrr24• 4 years ago

I suspect that once de-globalization really starts rolling along, we're going to see economic dislocations that are civilization-destroying. We won't get nation-states, we'll get civil unrest, regional secession efforts, anarchy, and war. Then some new form of political organization will arise, but I doubt it'll be either nation-states or globalization.

Why the leap from the end of unipolarity to the end of nation-states in general? (I assume you mean "countries" here, ex: the U.S. is not a nation-state) To me a Cold War II scenario and a bipolar world order seems more likely. I don't think there will be widespread civil uprising; I think you're underestimating how much control that governments (including democracies) have over their people.

It will take some radical technological change to overturn this power dynamic and displace national governments with anarchy and unrest as you mentioned. One example of tech in this vein is DAOs, which seem like an attempt in this direction but the problem is they lack enforcement via force and coercive violence. Until you can disrupt that (killer AGI drones?), central governments will remain the efficient and viable solution to consolidating power and enforcing order, and therefore they will be the dominant form of organization in the world. The disruption of U.S. influence and the end of globalization will not be the end of countries, at least until a radical technological change happens.

ClumsyPilot4• 4 years ago

Globalization has led to unprecedented global peace over the last 30 years

Millions of people worked towards peace, peacekeepers, activists, anti-war protesters, diplomats, lawyers, soldiers, etc. Many have laid down their lives.

It's offensive. and disrespectfull for purely commercial interests to claim all the credit. There is not even a rational argument provided beyong a correlation.

Maybe it's the other way round global peace has allowed globalisation. And it hasn't stopped Russia.

unprecedented amounts of money were injected into the global financial system over the last 13 years

Every time I see a person that complains about government printing money, they can never answer how is money supply supposed to grow along with economy to enable economic expansion? The only mechanism is government printing money or banks creating loans

Also do you know that many governments owe like 30% of their debt to themselves?

'HM Treasury owes £2.1trn to holders of British government securities, of which approximately £745bn is owed to the Bank of England'

gruez• 4 years ago

Globalization solved our garbage problem - many municipalities are no longer offering recycling now that we can't ship it to China to dump in their fields.

Garbage was never a problem to begin with. US is a huge place. We'd be fine landfilling garbage for the next few centuries at the very least.

mytailorisrich2• 4 years ago

"Liberalisation" is a marginal benefit at best. Does it really matter to me what political regime is in place in another country across the world? Not really.

A much bigger benefit is that globalisation promotes peace through increased inter-dependence. This is the same idea that was used at the very beginning of what is now the EU.

Of course the West also benefited tremendously from cheaper imports and larger markets for exports.

woeirua2• 4 years ago

Except the war in Ukraine has also shown that this is false.

karp773• 4 years ago

Globalization promotes inter-dependence. That's all.

In a way, it's like chaining yourself to your trading partner. Now, you have to be very careful who you chain yourself to. Is it a stable democracy that shares your values, or is it some authoritarian hellhole with a tyrant and maniac in charge?

throwaway123989• 4 years ago

China has taken all the benefits

I thought Trumpism is not welcome here?

Globalization will live on, but only for countries who align themselves with the west.

So globalization is just westernization?

philwelch• 4 years ago

So globalization is just westernization?

Yes, except “the west” these days includes Japan and South Korea.

throwaway0x7E6• 4 years ago

reddit is down the hall and to the left

BobbyJo• 4 years ago

I thought Trumpism is not welcome here?

China having an export surplus precedes Trump's presidency by a few decades.

globalization is just westernization?

I think the idea is that countries need similar regulations to complete fairly in a shared market. I.E. The US can really only trade with other western countries if they want to avoid a lot of the present pitfalls with global trade.

ken47• 4 years ago

The promise of globalization was primarily about improving economic efficiencies, not liberalization. Has it succeeded in that regard?

Given the extremely myopic system under which our largest corporations (in America) operate, they've engaged in globalization in a way that largely maximized short-term benefit (to them) without regard for the long-term externalities. It's a shame that globalization had to be given a bad name by being executed poorly.

eindiran• 4 years ago

I agree with you up until the last sentence, which reads exactly like American communists decrying Stalinist purges only insofar as it has given "true Communism" a bad name. The theoretical promises of some -ism are really only as good as their execution.

retrac• 4 years ago

The promise of globalization was primarily about improving economic efficiencies, not liberalization.

At the time, it was presented to the public as both. Inseparable. Liberalism was development. Development was liberalism. Besides the Communist Bloc, whose actual degree of development was rather questionable, no significant counter-examples existed at the time, and most recent political liberalizations had been followed by drastic and rapid economic growth as the country integrated into global capitalism. So it was a logical enough hypothesis. It was also the guarantor of global peace, supposedly.

This is a quote from Stephen Harper, former Prime Minister of Canada from a speech he gave at the United Nations in 2014 extolling the virtues of free trade:

[...] We also believe that they are the necessary foundation for a better world for more people, necessary for prosperity, and with prosperity comes hope, and with hope, the greater inclination of free peoples everywhere to find peaceful solutions to the things that divide them.
Indeed, we believe that freedom, prosperity and peace form a virtuous circle.

Similarly, Bill Clinton, former US President, on why China should join the WTO in 2000:

The change this agreement can bring from outside is quite extraordinary. But I think you could make an argument that it will be nothing compared to the changes that this agreement will spark from the inside out in China. By joining the W.T.O., China is not simply agreeing to import more of our products. It is agreeing to import one of democracy’s most cherished values, economic freedom. The more China liberalizes its economy, the more fully it will liberate the potential of its people — their initiative, their imagination, their remarkable spirit of enterprise. And when individuals have the power, not just to dream, but to realize their dreams, they will demand a greater say….
State-run workplaces also operated the schools where they sent their children, the clinics where they received health care, the stores where they bought food. That system was a big source of the Communist Party’s power. Now people are leaving those firms, and when China joins the W.T.O., they will leave them faster. The Chinese government no longer will be everyone’s employer, landlord, shopkeeper and nanny all rolled into one. It will have fewer instruments, therefore, with which to control people’s lives. And that may lead to very profound change. The genie of freedom will not go back into the bottle. As Justice Earl Warren once said, liberty is the most contagious force in the world.

There it is stated openly as the justification for free trade. Trade will destroy authoritarian state control from within, expose people to freedom, which they will then demand, and that is why free trade with China is in the USA's best interests.

Liberals (by which I mean essentially all mainstream politics in the West today) have, historically, believed this. The economic pattern and means of production define the social and political environment. Opening up to trade meant opening up to new ideas which would necessarily bring liberalism. I used to devoutly believe this myself! Our politicians, I think, actually believed it, possibly wishful thinking.

rbanffy• 4 years ago

The promise of globalization was primarily about improving economic efficiencies, not liberalization. Has it succeeded in that regard?

Another goal in which it succeeded was in preventing major wars between the superpowers. US and China are so co-dependent in their economies that they can't declare war against each other. Russia less so, but, still, they can only engage through proxy wars.

Where it failed is that these long supply chains are incredibly brittle and chaotic - a major shock puts the system in cascading collapse and it takes years to recover it to a workable state. This TSMC investment is a response to those collapsed long chains.

Another failure was the promise to deliver better living standards to everyone. What happened is that industrial jobs in the developed countries were shipped to developing ones, favoring places where labor is so unregulated that it looks like indentured servitude.

klntsky• 4 years ago

It is still possible that it will deliver, just not today or tomorrow. E.g. China has a large population that eventually will not be satisfied with just material comfort. They may start demanding more rights to themselves.

hilyen3• 4 years ago

Not a fan of any authoritarianism, but USA could also be described the same way. We have massive data warehouses that just collect everything, phone calls, texts, internet packets. We just have different owners, but its the same game.

If you haven't read up on the unclassified docs that have been released about the secret agencies of this country, you should. We've done everything and worse to our own citizens. Including firebombing entire cities, sending the military to kill people striking, dosing unaware Americans with LSD... the list is long.

ledauphin• 4 years ago

I'm not a fan of any authoritarianism either.... and if you're describing the US the same way you describe China, then you're missing the forest for the trees.

Two things can be and often are _true_ at the same time, but often the difference between them is that, for a given conversation, one of them is a proportionate contribution, and the other is a troll.

ch4s33• 4 years ago

Not a fan of any authoritarianism, but USA could also be described the same way. We have massive data warehouses that just collect everything, phone calls, texts, internet packets. We just have different owners, but its the same game

This is hardly a reasonable comparison. Most of the crazy shit you're talking about like breaking protests with the military and the LSD trails are from 60 years ago. Firebombing cities happened during WWII and was the accepted (though terrible and it turns out strategically wrong) air doctrine of all sides.

Yes, US bulk data collection is wrong, but we know it isn't being used to round up people en masse for wrong think. We don't run massive reeducation/forced labor camps for ethnic minorities. The Xinjiang internment camps have housed basically the equivalent of the whole US prison population and where there is institutionalized forced sterilization, mass rape, water boarding, torture involving electrical shock, and beatings. Even the worst US prison is basically day camp by comparison, and the people of Xinjiang are being rounded up largely for their ethnic identity.

You false equivalence is frankly, fucking bullshit.

rrrrrrrrrrrr24• 4 years ago

Wartime != Peacetime.

Also, what do you mean firebombing our own cities. U.S. "strategic" bombing during Vietnam and WWII was on our enemies, not U.S. citizens as you claim. MKUltra was, sure, but it wasn't millions of people. And who cares about wiretapping; that's not even in the same ballpark. For most people in the U.S., we can live a free, safe, and open life, and so did our parents and grandparents.

One example of how the U.S. is not currently authoritarian is that we're all able to have this exact discussion strongly criticizing the U.S., on a U.S. website, over the U.S. internet, and still no one from the government is going to have us whacked.

autokad• 4 years ago

There were good and bad. We may soon find out whether it was a good deal or not as globalization gets reversed. I think the timing of it was really bad, as we are choosing to end globalization as the baby boomers are retiring. We are going to find we don't have enough workers to produce the goods and services we want to buy. With all the hate on automation, right now automation is the only thing that can save us.

As far as evil China, I don't disagree with that, but the US wasn't much better in a lot of regards. The US weaponized trade. We were like that drug dealer that gives you drugs for free to get you addicted, and then threaten to cut you off if you don't pay high prices. "you don't agree with our culture? we will cut you off!" It wasn't just trade, but the monetary system as well.

Needless to say, I am not optimistic about our future.

Aunche2• 4 years ago

one of the major promises was that free trade would liberalize the world

This was wish a mix between wish-fulfillment and propaganda used to reverse the effect of Cold War propaganda. The main goals of globalization were economic and diplomatic, and those have been wildly successful. Billions of people have been lifted out of poverty, and nuclear war is completely unthinkable.

Instead, China has taken all the benefits and used our money to build a system of oppression that would make George Orwell blush.

You don't need technology to build an oppressive regime. China were still closed off to international markets, they would be a lot closer to North Korea than it is right now.

chrisco2553• 4 years ago

Globalization will live on, but only for countries who align themselves with the west.

That's just a return to status quo, isn't it? A patchwork of defense alliances and trade agreements?

It's more interesting to me, to point out the relative decline in the relative power and influence of the West. Whereas U.S. was 25-30% of global GDP post WWII, we are down to 15% and declining. The so-called "global south" nations, interestingly a lot of these nations are rising in relative economic power and influence and yet many of them straddle the line between aligning with East or West (see India's oil / energy agreements with Russia, or south America's reluctance to join along with Russian sanctions).

In this sense, it's more apt to point out that globalization will live on, but only for countries that neither strongly align themselves with the west nor the east.

ROTMetro2• 4 years ago

Post WWII almost everywhere but the USA had all their production bombed and destroyed. What a strange statement you make. 'When most production in the world was destroyed, the USA, one of the few countries not bombed, accounted for most of the worlds production. Once other countries rebuilt, the USA's percentage went down'. Again, what a silly statement to make.

darthrupert• 4 years ago

All countries should align with the west. Mankind really needs to unify in some common framework, and west's is the best we have come up with so far.

Every other path will lead to doom. I mean, the framework could be something better than west's. But we first need such a thing, because it certainly has not been discovered yet.

midoridensha6• 4 years ago

The west's framework is the best, but it needs to be a more equal alliance between western-aligned nations, rather than being so dominated by the US. The US, Canada, EU, UK, Japan, South Korea, Taiwan, Aus/NZ, etc. should all be a part.

rsj_hn4• 4 years ago

It was never about "liberalizing the world". That was just the argument used to persuade those who valued liberalization. Like the British Empire got religious Britains on board by focusing on the sending of missionaries that would Christianize the world. But the expansion of the Empire was not done to send missionaries.

The idea of liberalizing -- e.g. converting to Western values -- was the more modern version of this missionary argument, but it's basically the same argument, and really the same target audience, just shifted in time.

Shockingly, most of the world has kept their previous religion, although there are liberal inroads/enclaves scattered all over, particularly in coastal trading cities.

peoplefromibiza4• 4 years ago

Globalization and free trade are dead because most of the promised benefits for the west failed to materialize

Not sure about that. [1] [2] [3] [4]*

Global increase in purchase power have completely changed many markets, even in the West. Except, probably, the USA.

My speculation: when people say "globalization did not work" they mean "for my western Country, that got rich exploiting developing Countries"

But globalization is simply "the process of interaction and integration among people, companies, and governments worldwide" and achieved most of what it promised.

EDIT: talking a bit about the article, what's happening to TSMC is not due the fact that globalisation is dead, but because Taiwan is technically still part of China and the USA don't wanna go to war against China for Taiwan. Despite the fact that they support a free Taiwan, they never voted for its independence at UN.

"We oppose any unilateral changes to the status quo from either side; *we do not support Taiwan independence;* and we expect cross-Strait differences to be resolved by peaceful means" (https://www.state.gov/u-s-relations-with-taiwan/)

---

[1] https://www.statista.com/graphic/1/263770/gross-domestic-pro...

[2] https://www.statista.com/graphic/1/263771/gross-domestic-pro...

[3] https://i.insider.com/4d3dca0accd1d578410b0000?width=607&for...

[4] https://ourworldindata.org/exports/gdp-per-capita-maddison-2... * warning: logarithmic scale!

33955985• 4 years ago

Globalization and free trade are dead because most of the promised benefits for the west failed to materialize.

Your statement about the promised benefits failing to materialize is spot on, but this not the reason globalization is dead. Globalization is dead because the United States has stopped patrolling shipping routes with US warships and has, in general, lacked a foreign policy and interest in developing one.

The two might be linked, but just barely —- I suspect that one too many generations of mothers and fathers saw their children killed, maimed, or traumatized by senseless military misadventures, thus the appetite for these excursions remains low. Coupled with the fact that the US is aging —- fast —- and has fewer children to spare, the great unwinding is indeed before us. But I doubt, sincerely, that politically or spirituality the voting electorate had any realization of the sort you called out. That is, no contingency of American voters woke up to say, “Yes I can get a flat screen TV for $120, but what’s the real cost?”

scrubs2• 4 years ago

Def true at a national security and foreign policy level. And at a macro economic level, the US is now at a place where we prefer jobs (with attendant security) over cheap prices. I just got back from Brasil. Gotta like it that a lot of stuff Brasil uses is made there.

bruiseralmighty• 4 years ago

Globalization will live on, but only for countries who align themselves with the West.

I think your treating 'globalization' as equivalent to 'American-style liberal democracy' in your last sentence there.

If only a hemisphere of the globe is 'globalized' than clearly the term has become disconnected from any literal meaning at that point. Both democracies and autocracies are increasingly de-globalized at the moment, its a statement about the network and not the nodes on it.

Although not yet directly comparable to the surveillance state that the CCP has created, there are have been highly successful forces within our own government to generate and implement systems of oppression within the United States. There is a definite inclination among regime elites to favor more centralized control of the public.

Just recall efforts to nationalize voting, policing, housing, and the internet. To say nothing of the covert surveillance or the plans to phase out non-digital transactions in order to curtail 'money laundering', or the gentle reminders of the IRS that they will pursue ever smaller transaction amounts. Or even the sword of 'regulation' that hangs over the head of social media companies should they not heed the _"""advice"""_ of executive agency functionaries.

It may be less formalized than China, but there can be no mistaking the current of this undertow.

andrejguran• 4 years ago

The one scary effect that is not mentioned here is that globalisation and trade are pushing towards peace. Without it I am afraid we might go back to much darker times

Izkata• 4 years ago

The late 1800s was also a time of increasing globalization. It was exactly that interconnectedness that turned a local conflict into WWI.

AnonymousPlanet2• 4 years ago

Interconnectivity by trade before WW2 was very brittle, because everyone involved had to fend for their own trading routes. The pillar of today's globalisation is that big and middle powers don't have to roll their own security policy just to keep their own commerce running. The global naval hegemon has been doing that for them for decades now. The moment this goes away, we will suddenly see a whole lot of regional disputes popping up. "Safety" inspections for container ships of the competition or more blatant interference using drones. Once a precedent has been set of the US not stepping in, it can turn wild pretty fast.

yucky• 4 years ago

That depends on how you define peace. Many non-Western nations are not at all at peace with the idea of their cultures being displaced and destroyed through the cultural imperialism of the US. And our dominant economic role and continued push for globalization is widely seen as the largest factor in that.

Many people in the West don't make that connection because our consumption of media is very insular. But it's been bubbling under the surface for awhile and now it's starting to boil over.

lizardactivist2• 4 years ago

Thanks, USA. Globalization was only good as long as they thought they could come out on top and make everyone else dependent and obedient.

We should have continued to strive for globalization, and left the USA behind to implode into its own collapsed mess. Now we're just turning our backs to China and Russia, pretend we're the "good guys" and that everything's amazing.

ROTMetro2• 4 years ago

The average working American sacrificed a lot in the name of striving for your 'globalization'. Your generic demonizing of these people is gross and dishonest.

lizardactivist2• 4 years ago

We often speak broadly like this, just like you speak about how Russia and China (everyone living there, apparently) are bad. It doesn't mean we're saying that every single person in that country is to blame.

I say that the USA is to blame for the end of globalization, you don't, and so we have to agree to disagree.

jeffreyrogers• 4 years ago

Exaggerated headline. Lots of production of various goods still going to places like Mexico, India, Vietnam, etc. Semiconductors moving back to the US is mostly a reaction to China's growing power. Most trends point towards increasing globalization outside of specialized industries like semiconductors just because capital and goods are so much easier to move than people, and the developed world requires cheap labor to support its living standards.

ryanwaggoner2• 4 years ago

Previous discussion on the referenced speech: https://news.ycombinator.com/item?id=33902422

pishP05h2• 4 years ago

What it means to be a global society will be redefined.

Big brains who think their relative understanding is forever realizing they’re in their 50s and generational churn will mean the people who have enabled them won’t be here much longer are really melting down these days.

I look forward to Gen Z and later showing as little obligation to traditions of the last 100 as the last 100 years showed to 200 years ago.

Rotary phone makers, horse and buggy businesses are starting a protest they can all sign onto.

ryanwaggoner2• 4 years ago

Ridiculous. This has the energy of "No one goes there anymore, it's too crowded!"

Global trade is at record highs. Perhaps globalization will decline from here, even permanently (although I'm very skeptical) and I'm certain it'll continue to change like it always has, but declaring it "dead" makes exactly zero sense.

brookst• 4 years ago

Absolutely this. That TSMC fab in Arizona? The lithography machines come from ASML, a company in the Netherlands. The EDA tools? Those are from Siemens, a German company. And on and on.

And that's on top of our new remote-first world for information workers. You used to offshore departments or teams; now teams are as likely to be made up of people living in different countries as they are to be made up of people living in the same metro area.

Some aspects of globalization are changing. That's normal. But declaring it dead is like declaring the Internet dead because it just got absorbed into all of the products we use.

MisterTea• 4 years ago

In Morris Chang’s own estimation, the chips produced from TSMC Arizona may cost “at least 50% more” than the chips from TSMC Taiwan.

I'd like to know why its 50% more. Labor costs? Regulations? Taxes? We aren't told and I cant read the linked WSJ article.

armatav• 4 years ago

Yeah - if you take it to the limit, and every small organization can produce/consume everything they could ever need in a local area; then of course globalization will approach an asymptotic “death”.

This is like the “limit” of technology. If ever we got an atomic assembler going, what use would there be for that interaction from a supply/demand standpoint?

scottmckenzie• 4 years ago

I would recommend reading Peter Zeihan’s books, or watching some of his interviews on You Tube, to get a fuller geopolitical view. It’s fascinating stuff.

efields• 4 years ago

I'm listening. I've heard this three times in the last week. But I haven't been ELI5'd what this really means for the rest of my adulthood. I only know a "Globalized World". I was in elementary school when Bill Clinton was elected and globalization (economically) started, right?

So is this a reversion? Is it socially bad but economically good? Does the $1 slice become the $2 slice in a couple years?

Or are we trying to say something worse?

chrisco2553• 4 years ago

I don't think anyone knows to what extent this will play out over the next decade. Yes, we are more reluctant to trust outsourcing production to China, and tensions over Ukraine & Taiwan highlight this rift between NATO nations and the East. But by no means has this stopped the inflow of goods arriving from China. I think that within industries that are deemed critical to national defense, especially semiconductors, these are going to be forcibly on-shored. Whether that spills over into "less critical" imports remains to be seen.

When it comes to on-shore vs off-shore production, not sure it can neatly be described as "good or bad". There are trade-offs. When we outsourced more production and manufacturing to China, our economy became more service oriented. We lost some valuable manufacturing skills in the labor force in the process and it takes time to ramp that back up. We are also saddled with far more regulatory and legal issues in the U.S. and that adds a significant burden to costs.

I think as article points out, on-shoring will contribute to CPI increases. Off-shoring offset some of the inflationary fiscal (spending from govt) and monetary policies (QE) of the past few decades. Ultimately goods will cost more. At the same time, it's likely that automation technologies get boosted investment. On-shoring may induce a robotics boom to counter act some of those higher costs (since the ROI will have increased). So maybe goods will be more expensive in short to medium term, but longer term, we may end up in a better place.

The more open questions are how the world grapples with a "multi-polar" world and whether that leads to kinetic war or active trade wars between U.S. & China.

rsj_hn4• 4 years ago

Here goes:

First, let's define what is meant by "Globalization", as this word is used to mean many things. First, it does not mean trade. You will still be eating Chilean oranges. You will still have Vietnamese coworkers in your company. The history of the world is filled with trade - that's not what makes our current era of "Globalization" unique.

What it means is trade imbalances. The world as it exists now has one group of nations running persistent trade deficits and another group running persistent trade surpluses.

To run a trade surplus means you take the money you get by selling goods to the world, and invest it overseas. China invests $2 Trillion overseas. Saudi Arabia $1 Trillion. Russia $750 Billion. Qatar $250 Billion dollars. This creates a web of dependencies, it increases trade massively, and it also reduces the sovereignty that each nation has, as those who invest large amounts overseas are dependent on others that their assets are not seized, and those who are the recipients of such foreign investment become dependent on it to maintain their consumption levels and high asset prices (low interest rates). So in many ways, the world becomes smaller and each nation has less freedom to act independently. This is why we call it "Globalization". It refers to the globalization of investment.

If the exporting nations did not invest this money overseas, what would happen is that their currencies would appreciate up to the point where their trade is balanced -- as many exports as imports. Now, what would the world look like if each nation's trade was roughly balanced. So that Saudi Arabia, Russia, China, Qatar, and the US all exported about as much as they imported?

It would be a very different world than the one we have now.

Now how did we get to this world of persistent trade imbalances - it didn't happen by accident, it was a long term project requiring:

1) A vast international web of investor rights, so that when Saudi Arabia, Qatar, Russia, or China park their money overseas, they can be assured it is not confiscated and that the value of their investments is maintained.

2) Global trust

What we are seeing now is this system is unravelling. That is, foreign investment is being confiscated, global trust is eroding, and the international frameworks are not able to maintain sufficient global trust to justify parking huge sums overseas. The canary in the coal mine was the US seizure of Afghanistan's sovereign reserves, but really the increasing way that the US has been using the dollar system as a proxy for foreign policy, which undermines the usefulness of the dollar as a reserve currency for those nations that matter -- e.g. the exporting nations. The seizure of Russia's sovereign reserves was the fatal blow to this system. Now, it is clear that all these investor rights agreements are no longer being honored.

And so all the exporting nations are scrambling for alternate places to park their money, many are preparing to begin a round of asset seizures and counter seizures, and are building trade systems based on specie flows, various hostage mechanisms, and limited bilateral treaties in which trade is roughly balanced.

These are massive changes, and they don't get a lot of US media attention, but they are taking place in international conferences and high level diplomatic agreements all over the world right now:

Saudi Arabia just signed a $40 Billion trade deal with China, it's largest deal ever, in which it will sell oil to China in exchange for Huawei coming in and building out a new telecom infrastructure in Saudi Arabia as well as constructing factories there. Note that this trade is roughly balanced, and it is occurring between net exporting nations. This is the future of trade -- something tangible for something tangible, so that nothing is exposed to being seized by a foreign government.

Russia and Iran signed a $40 Billion trade deal along similar lines.

At the same time, China has been structuring its capital controls so that it's impossible for Western companies to pull money out. For example, Apple has huge earnings in China, but it's stuck in China. China is preparing for the US to seize their assets and they will counterseize the Tesla factories, Apple earnings, etc.

In terms of prices, what it will mean is higher prices and higher interest rates in those nations that have traditionally run trade deficits, and lower prices and lower interest rates (stocks will be worth less and cost of living will go up) in those nations that have traditionally run trade surpluses.

But you will still be able to buy your Chilean orange -- there will still be trade, but it will be much more balanced, so that orange will cost more -- and your mortgage payment will be higher.

A second casualty will be the anti-carbon movement, as it was depending on international investor agreements to be both the carrot and stick for mandating change. At the same time, the deficit nations will find it much harder to import the minerals and finished goods such as batteries and solar panels necessary to transition even their own energy grid.

pphysch2• 4 years ago

Many people are conflating "unipolar USD dominance" with "economic globalization", when the former is very much a subset of the latter. The former is definitely dying (see last week in KSA).

If economic globalization is genuinely suffering, it is a direct result of Washington's unilateral sanctions and trade wars.

Global logistics aren't suddenly collapsing. However, there is increasingly more red tape created mainly by Washington, and this causes strain on the system.

rsj_hn4• 4 years ago

The problem is that there is nothing to replace the US dollar/Euro -- e.g. the western capital markets, because other nations (excluding Japan) do not want to open their capital markets to foreign investment. So if this was just a matter of switching from one reserve currency to another, then globalization would be fine. But this is a situation in which the world is realizing that the dollar/euro system is no longer fit for use, and there is nothing to replace it, which is why nations are realizing that they can no longer run these massive trade surpluses full stop. That's how you get to the end of globalization.

see last week in KSA

Yes, let's look at this deal, because the KSA deal is a perfect example of the end of globalization. It's basically barter -- Saudi will send China oil and China will send Saudi Huawei gear and build factories there. People are focusing on the fact that the oil will be denominated in CNY and assume this means a massive increase in Saudi CNY holdings -- but China doesn't want other nations to start buying up CNY assets, and it has capital controls in place to prevent that. So the CNY is not replacing the dollar as a reserve currency -- that would be China's worst nightmare.

Instead, we are switching to bilateral, managed, balanced trade in which each side gets something tangible under their own control and there is no residual large cross border financial flow to finance the deal.

Now let's assume this is how trade will be done in the future. You want to import natural gas from me? Fine, build me a chip fab. Or a port. This is a very different world than saying "You want to import natural gas from me? Fine, I'll buy lots of your bonds and keep my money in your financial system. Do you see the difference?

pphysch2• 4 years ago

Yes, I see your point. There are simply different definitions of "globalization" going on here. I believe there is a meaningful distinction between "USD-d(en)ominated global finance" and economic globalization. The latter isn't going anywhere.

turnsout• 4 years ago

With all respect, Chang has this exactly backward. TMSC manufacturing 100% of the world's most advanced chips in Taiwan is not "globalization." If anything, it's the opposite. Globalization is about leveling the playing field, so companies can source products & services from countries across the globe. A fab in Arizona is literally advancing globalization.

loyukfai• 4 years ago

The theory of international trade is based on the principle of comparative advantages. So theoretically if Taiwan can produces chips the cheapest, including transport and other costs, they shall do just that.

The decline of globalisation is due to, IMO, risk aversion of having too much of your supply chain, especially for essential and/or not easily replaceable merchandise, tied to an antagonistic or potentially antagonistic partner.

In other words, some of these "other" costs have become too high to just buy certain things somewhere else and call it day.

UIUC_06• 4 years ago

We can now expect Tom Friedman, Joseph Stieglitz, and Paul Krugman to write new books explaining it all for their readers. Of course they will tell us how they knew it all along.

The truth is that geopolitics has not gone away. The world is not "flat" but bumpy and separated by big oceans.

cesarvarela• 4 years ago

"X is dead" content needs a neologism if it doesn't have one already.

hayst4ck• 4 years ago

Globalization will never be dead.

Globalization, more than anything else, means a set of rules that apply to all countries (trade, human rights, or otherwise).

Globalization is a philosophical consequence of belief in the rule of law and human rights.

Here is the most thought provoking piece of literature I've ever read on American philosophy (giving it the benefit of the doubt or at least painting it in the best light): https://www.amacad.org/publication/what-does-it-mean-be-amer...

In short, societies fall on a spectrum of one end being built on a set of values (are you an American because you love guns and freedom?) and the other being based on an ethnicity (are you American because your parents are American/you have a shared history with other Americans).

This is the key divide between conservatives (ethnicity based) and liberals (value based).

So we see the great philosophical fights of our time:

  isolationist/nationalist vs globalist
  ethnicity vs civility
  might makes right vs rule of law
  loyalty to people vs loyalty to ideas

They are all share a root idea in where authority comes from. Does authority flow from people and the power structures they craft or does authority flow from philosophical reasoning.

Anti globalization pragmatically follows the idea that authority flows from those with power. Globalization idealistically follows the idea that there are rules that must supersede power itself.

ambientenv• 4 years ago

Like many folks, I suppose, I thought I had a reasonable layman's grasp of globalization. Turns out it was mostly superficial. I'm currently reading "The End of the World is Just the Beginning" by Peter Zeihan [1] and it is enlightening. Highly recommended in helping to add (especially historical) perspective to understanding the death throes of globalization. Paired with "normalcy bias" [2], which I was vaguely aware of, and beliefs and behaviours begin to become somewhat more understandable and an opportunity to shift my worldview in an appropriate and preparatory manner begins to reveal itself.

[1] https://en.wikipedia.org/wiki/The_End_of_the_World_is_just_t... [2] https://jessicawildfire.substack.com/p/its-not-cool-to-overr...

TheHappyOddish• 4 years ago

We’re well into the social shaming stage of the pandemic. It doesn’t seem to matter how much evidence we have. People won’t adopt the simplest measures to protect themselves or anyone else.

That one made me double take. Is it a commonly held view that COVID is "still happening"? In my area of the world (and in other Western areas, from talking to friends), it's seen as over basically since we got our two jabs. Based on this quote and other articles by the author (complaining about children coughing on each other or adults not wearing masks), I assumed this article was 1-2 years old.

Regardles,

A disturbingly large portion of the public seems totally unmoved by stories of children dying in hospitals.

If we look at the world around us, we see preventable awfulness daily. Everyone's aware that aggressive driving and speeding increase the chances of car accidents resulting in injury or death, yet most people seem to do at least one daily. Most people are aware that their clothes, watch, computer, iPhone, kettle, etc are made overseas often in awful conditions, yet they continue to shop.

Most people are aware after 30 years of marketing that you can feed a child in Africa for a very small amount of money per month (yes, you can afford it), yet they elect not to.

What the author calls normalcy bias, I wonder if this is simply an in-built protection to stop us breaking down on a daily basis. Either way, I'm unsure why the author is at all surprised.

hirundo• 4 years ago

Between breakfast and lunch I've worked with three people from India and one each from Germany, Canada, China and a half dozen around the US. That's just a normal workday in a normal dev job. Globalization is looking hale and hearty from my chair.

fleddr• 4 years ago

There's no such thing as de-globalization or "globalization is dead".

Even in this very best case example of a factory in the US, a country large enough that it can self-sustain in some ways, it is 100% globalized.

The 5 million little parts that go into the factory are sourced from all across the world. As the article suggests, education comes from Taiwan. Rare earth minerals come from Africa and China. The machine comes from ASML, which in turn sources parts from all across the world.

But yes, do go ahead and slap a "Made in the USA" on it if that makes you feel better.

kkfx• 4 years ago

I think too many have ignored a classic logic: do your best to avoid SPOF.

Globalization is the extreme evolution of works specialization, instead of being "different States in the World" anyone as autonomous / self-sufficient as possible we have reached a point of being a "single system all other the world" where States blend a bit their role and no one is anymore self-sufficient. Such model works beautifully well until it breaks. Like any hyper-centralized systems.

Doing the best to being self-sufficient is expensive, slow, complex etc. BUT pay off when things goes wrong. That's the very same principles of having lifeboats&c on ships: 99% of the time they are just costly useless tools. We can spare more space and reduce costs cutting them. That's works very well until something goes wrong.

That's is and that's also why the WEF corporatocracy model is equally crazy. They want the power of course, but they forget the fact that companies are not different: they tend to be all on the same line of thought. Witch means they inevitably copy one another, they are a single entity so a SPOF. WE NEED VARIETY to maximize evolution and chances to survive as a spices. That's the real missing point.

That's why is terrible to see a Chinese leader with an English dress. We need to be different, very different, see each others and share, but anyone with a path.

hintymad2• 4 years ago

the hard-earned lessons from TSMC’s first time building a fab in America 25 years ago

IIRC, one of the hard lessons was that it was expensive to operate a factory in the US. It's not even the cost of paying workers, but that the workers needed a lot of training. Or my interpretation: the American workers are simply not as efficient as the Asian counterparts. This also reminds me the story in the Obama's documentary "American Factory", in which the hourly productivity of American workers was about 1/3 (or 2/3) of the Chinese workers.

So, I have a pretty pessimistic question: can American workers still be competitive even if we move manufacturing back to the US? I really really hope that Americans are as competitive as they are decades ago: they earn more than people in other countries, yet the unit cost of products were lower than those of other countries because Americans simply led in productivity.

scrubs2• 4 years ago

Aside from the soap opera part --- US v. Taiwanese culture and whether a TSMC wafer in Arizona is more Taiwanese than American --- here's what all managers and engineers should want to know: will these American plants continuously improve? If the plants can be profitable and products from it can be profitable there will be a good positive feedback to attract, retain talent, and to grow the market for same.

The US has let globalism probably overshoot 30% ... so yah we suck right now compared to TSMC at manufacturing 'cause we spent our time doing supply chains ordering from Taiwan. If we still suck after 10 years, then let the criticism fly.

Globalism is not dead; c'mon. But it does need some straightening out. The US is finally at a place where we prefer jobs (with attendant security) over cheap prices.

hintymad2• 4 years ago

Yeah. If the US manufacturing can't become competitive in a global market, then whether globalism is dead will not matter: there was no globalism 100 years ago, yet the US economy arose while Britain's declined, simply because the US could build better, cheaper, and faster. Allyn Young didn't believe that the finance center would move from Britain to the US because Britain was appeared so powerful 100 years ago, well, the rest was history.

tim3332• 4 years ago

Globalization as in trade and interaction bringing people together has been going on a long time, maybe a couple of thousand years with the original silk road and boats trading around the med. There's a bit of a blip at the moment especially with regard to Russia and China going a bit warlike on us but I think the long term trend is intact.

amai• 4 years ago

Globalization that included trade with authoritarian regimes is dead, because Putin showed that these regimes don‘t behave rational.

Globalization between democratic countries is thriving. E.g. CETA between Canada and the EU will soon be active.

Globalization is dead and no one is listening

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