The World is Still Round

A decade ago, globalization was riding high. When Tom Friedman optimistically declared in his 2005 bestseller that “the world is flat”, many wanted to believe a new world was coming that would bring prosperity and low-cost goods to everyone.

It didn’t happen for everyone. And even for those of us who did gain, globalization doesn’t seem like such a great deal these days. Widgets and electronics made in China may still be fairly cheap, but China’s burgeoning demand for oil, metal, and many food items is a key reason why the price of those commodities is booming—and why prices on all kinds of goods in the U.S. are going up. The money we save at Wal-Mart gets pumped back into our gas tanks. Meanwhile, blue-collar jobs continue to be offshored.

No wonder that anti-globalists like Lou Dobbs, once relegated to the sidelines of the worldwide party as a flake and a crab, now look pretty mainstream. People, particularly those who’ve lost their jobs, are demanding “fair trade” barriers of various kinds. And worries over melamine in pet food and lead in toys have made a lot of parents and pet owners wonder whether “free trade” doesn’t come at a steep price after all.

Pro-globalists and flat-worlders seemed to assume that the global economy was rapidly evolving into a massive, self-regulating mechanism that would spread its benefits equally. And everything would be cheap, yet still reasonably well made.

The world is neither simple or static. Demands expand and contract, markets shift, innovation changes various games. And the pressure to control costs and other stressors in this ever-changing world often cause companies and countries to cut corners.

So now many are questioning the benefits of a globalized economy—even many of its once-staunchest defenders.

There’s nothing that can be done about booming global demand, of course. But with the end of cheap oil and cheap food, more and more people in the U.S. are going to question globalization’s benefits, just as people elsewhere in the world have been doing for years.

Personally, I think globalization’s pros still outweigh its cons. But since the cons exist, it’s becoming clear that some kind of new new world order is needed. In short, global regulations.

The trick, of course, to regulate as lightly as possible—to protect the world’s consumers, workers, and environment without strangling needed business innovation.