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Tuesday, June 16, 2020
A New Chapter for Globalization
Chan Kung

Today, the world sees a heated discussion concerning the definition and significance of globalization on varying levels, and this leaves people at a loss. In British sociologist Anthony Giddens’ words, “modernity is inherently globalizing”, hence globalization can be understood as an expansion of modernity from the society to the world, so much so that any academicians who failed to discuss globalization in the past few decades are considered outdated and uninformed of current affairs.

Yet modernity itself is also subjected to change. What was once associated with modernity today may be "outdated” and “irrelevant” tomorrow, especially since the growing generation following WWII have built numerous theories and classics on the very concept of globalization, making such concept a classic consciousness. However, as time moves forward and the world enters a new development zone, we see that national policies are still rooted in sustainable development of globalization. On the other hand, globalization also faces major challenges and the phenomena of inverse-globalization, which causes the contradictions turning into violent, unrealistic struggles at times.

Currently, there are too many misleading perceptions and biases in the world towards globalization. How then, should we tread with globalization? How do we adapt to the huge challenges of inverse-globalization? These are some of the major issues begging to be answered.

To answer these questions, ANBOUND drew different conclusions based on the existing theories and viewpoints from the newly published strategic report Past and Present of Globalization. We believe that globalization must be defined and understood from a comprehensive framework, and not merely at a certain level that fragmentizes and localizes the overall issue, for instance, giving a hypothetical narrative to the “globalization of the economy”. As the report’s conclusion points out, we believe that globalization is a curve with peaks and troughs. The “inverse-globalization” that people speak of should be operationally defined as the phase of inverse-globalization, and the fundamental driving force for globalization is the power of capital. It is also precisely due to this very dynamic factor that as long as the power of capital does not dwindle, then globalization will continue to move forward after inverse-globalization.

It needs to be stressed that the stages of inverse-globalization will happen for a long time, and may even last for decades. Our forecast shows various alarming geopolitical phenomena will frequently occur during the ensuing period, namely - (1) Economic austerity, (2) Serious geopolitical conflicts, (3) Large-scale industrial restructuring, (4) Left-leaning politics, (5) Social tides overpowering the elites’ right of speech, (6) The emergence of newly discovered spaces, (7) Increase in social costs, (8) The rise of total social price and (9) The fragmentation of global space.

These forecasts are closely related to the actual social dynamics and allow us to understand the stages better.

Additionally, we have also provided three summaries concerning the forecasting trend in the characteristics of inverse-globalization:

First of all, future globalization will move towards regionalization, showing strong regional traits, as supported by the concept of spatial fragmentation. Globalization is a process of integration whereas inverse-globalization is a process of fragmentation. The integration-fragmentation process and its changes represent and reflect the change of globalization from peak to trough. This is basically the trend of inverse-globalization in time to come.

Secondly, inverse-globalization will inevitably cause social harm. This is where inverse-globalization will rise without warning, as a result of the long-term accumulation in contradictions and pressures. The consequences, like the impact and harm caused by the irrational social movements, may also spread to various countries’ society. When the cost of social harm exceeds the tolerance of the social structure, it could very well lead to wars and conflicts. An interesting and potential change to note here is following certain violent conflicts where some political forces collapse, the world may come out of inverse-globalization and start the globalization process anew.

Thirdly, the occurrence of a wealth transfer. Inverse-globalization is an era of great wealth transfer and large-scale transfer can be realized through the capital market, industrial investment, or even through other means such as art investment. During the course of the wealth transfer, some traditional investment theories in the capital market may fail and be replaced by a large number of speculative activities and investment arbitrages based on wealth security. The very essence of globalization is capital, and the greatest resistance force against globalization is also capital.

The processes of globalization and inverse-globalization are irrational, but can be subjectively chosen. Globalization itself is a world trend constructed by political, industrial and capital interactions between multiple countries. Therefore, the determinants are always external and explicably so. The same is true in inverse-globalization. Externalities are the deciding factors, so all countries in the world will be affected and hit. In addition to a few highly independent economies in the world, such as a low-key country like Switzerland, most manufacturing countries and resource-based countries will be unwillingly caught up in the tide of inverse-globalization.

As for countries trying to evade the impact of the inverse-globalization at all costs, the only policy operation is probably "self-isolation in the new era", seeking greater industrial and capital independence. A case in point is the U.S. who had initiated these actions relatively early on. Under the tide of inverse-globalization, some countries may do well, while some countries may fall into a controversy of romanticism, thereby losing their valuable window period and unfortunately starting a painful cycle. We believe that inverse-globalization is the main trend currently and we cannot afford to continue immersing in the dream of globalization because of our own delusions and preferences. This will lead to serious policy misalignments, unnecessarily large consumptions of resources, and miss the window of reform and adjustment.

In summary, we believe that the future has changed and a new chapter in the era has begun.

Final analysis conclusion:

The fundamental driving force behind globalization is the power of capital, and the greatest resistance force against globalization is also capital itself. It is precisely due to this dynamic factor that as long as the power of capital has not dwindled, globalization will continue to move forward after the inverse-globalization.

ANBOUND

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