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Scientific American

Globaloney

published August 2011 | comments (6)
Why the world is not flat…yet
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FAST-FORWARD TO THE YEAR 2100. Computers, writes physicist and futurist Michio Kaku in Physics of the Future (Doubleday, 2011), will have humanlike intelligence, the Internet will be accessible via contact lenses, nanobots will eliminate cancers, space tourism will be cheap and popular, and we’ll be colonizing Mars. We will be a planetary civilization capable of consuming the 1017 watts of solar energy falling on Earth to meet our energy needs, with the Internet as a worldwide telephone system; English and Chinese as the contenders for a planetary language; a unified culture of common foods, fashions and films; and a truly global economy with many more international trading blocs such as we see today in the European Union and NAFTA.

Kaku’s vision of how the exchange of science, technology and ideas among all peoples will create a global civilization with greatly weakened nation-states and almost no war is epic in its scope and heroic in its inspiration. Many have felt similar hope for a united, peaceful future through globalization. Indeed, I evoked a similar image in my book The Mind of the Market (Holt, 2009), and I was inspired in part by Thomas Friedman’s wildly popular The World Is Flat (Farrar, Straus and Giroux, 2005), in which he argues for “a global, Web-enabled playing field that allows for multiple forms of collaboration on research and work in real time, without regard to geography, distance or, in the near future, even language.”

The problem for Kaku, Friedman, me and other globalization proponents (and even opponents) is that such a future may be unattainable because of our evolved tribal natures. In fact, this is all a bunch of “globaloney,” says Pankaj Ghemawat, professor of strategic management and Anselmo Rubiralta Chair of Global Strategy at IESE Business School at the University of Navarra in Barcelona, in his new book World 3.0: Global Prosperity and How to Achieve It (Harvard Business Review Press, 2011). According to Ghemawat, only 10 to 25 percent of economic activity is international (and most of that is regional rather than global). Consider the following percentages (of the total in each category): international mail: 1; international telephone calling minutes: less than 2; international Internet tra!c: 17 to 18; foreign-owned patents: 15; exports as a percentage of GDP: 26; stock-market equity owned by foreign investors: 20; first-generation immigrants: 3. As Ghemawat starkly notes, 90 percent of the world’s people will never leave their birth country. Some flattened globe.

The problem, Ghemawat says, is that globalization theories fail to account for the very real distance factors (geographic and cultural). He crunches these factors into a distance coefficient akin to Newton’s law of gravitation. For example, he computes, “a 1 percent increase in the geographic distance between two locations leads to about a 1 percent decrease in trade between them,” a distance sensitivity of –1. Or, he calculates, “U.S. trade with Chile is only 6 percent of what it would be if Chile were as close to the United States as Canada.” Likewise, “two countries with a common language trade 42 percent more on average than a similar pair of countries that lack that link. Countries sharing membership in a trade bloc (e.g., NAFTA) trade 47 percent more than otherwise similar countries that lack such shared membership. A common currency (like the euro) increases trade by 114 percent.”

That analysis actually sounds encouraging to me if we use Kaku’s projected time frame of 2100. But Ghemawat reminds us of our deeply ingrained tendencies to want to interact with our kin and kind and to retain our local customs and culture, which may forever balkanize any globalized scheme. Even as the E.U. expands, for instance, an average of “Eurobarometer” surveys of residents of 16 E.U. countries between 1970 and 1995 made in 2004 by researchers at the Center for Economic and Policy Research found that 48 percent trust their fellow nationals “a lot,” 22 percent trust citizens of other E.U.-16 countries a lot and only 12 percent trust people in certain other countries a lot. Human nature’s constitution dictates the constitution of human society. In this sense, the world we make very much depends on the world we inherit.

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6 Comments to “Globaloney”

  1. Bunwarpgazoo Says:

    I don’t see why a retention of local customs and culture should be a problem, if the program is one of inclusiveness and bottom up democracy. If we are looking for a world without war, that is. If we on the other hand arehoping for a world of corporate domination and democracy limited to ‘whatever doesn’t hurt business’ then yes those pesky ‘local customs’ have to go. Which of say, California’s local customs, will be the first to go do you suppose? Or are we just talking about the other guys?

  2. Julian Rodha Says:

    aves del mismo plumaje se juntan…
    la cabra tira al monte…

  3. Bad Boy Scientist Says:

    I agree with Dr Mike This is actually encouraging news.

    Also some of Ghemawat’s observed regionalism may be due to the fact that Eskimo’s have less demand for bikini’s than Tahitians. Or to be less glib, the demand for products depends on regional factors – and there is nothing wrong with that.

    In fact, as the world economy becomes more focused on information and automation maintaining a distinct culture does not have to interfere with international free trade. When language translation software is coupled with voice recognition, it will tear down a huge barrier to international collaboration (This past weekend I observed that Google Translator is laughably Not There Yet).

    I will go out onto a limb and say that the diversity of cultures, regions and languages can be a strength in the international economy. (Just as diverse ecosystems are more robust against environmental changes, diverse socio-economic systems *can* be more robust in economic ups-and-downs).

    BUT. The #1 problem which is (and always has been) a killer is tribalism – particularly the native mistrust of others (xenophobia). It is so ingrained in us that even skeptics are not immune to this tendency of humans to divvy up into Us and Them (e.g. the polarizing effects of ‘Elevatorgate’ – I mean, if a community of rational thinkers can’t resolve it rationally, who can?).

    Tribalism is the destabilizing force in any social equilibrium – when They do something ‘bad’ to Us, We want to do something ‘bad’ to Them. It doesn’t too many missteps to turn allies into Cold War enemies.

    As far as I can tell there is only one counter to tribalism – but it isn’t perfect: government. If all tribes have a ‘stake’ in the government then there is a *chance* they will trust each other just enough for it to work.

  4. Dr. Strangelove Says:

    I disagree with globaloney. The reason why global trade is very limited today is not because of some evolved tribal nature. The reason is much simpler – economics. It is more expensive to transport products across the sea than to source them nearby. If the products are not available locally, global trade will quickly happen. For example, when a country does not have crude oil, it quickly forgets its “evolved tribal nature” and buys oil from the Middle East. Even if one does not trust the Arabs.

    Globalization will happen if it makes economic sense. I generally agree with Kaku’s vision of the future but skeptical of Mars colonization by 2100. Maybe we can put up a scientific base in Mars but not a colony as in a community. This is not driven merely by technology but by social factors. Look we have not even colonized Antarctica not because we lack the technology but because nobody wants to live there, except for a few scientists doing research.

  5. Timothy Says:

    Alright, I posted two days ago with a link. I know the policy says that anything with a link in it has to be approved, but this is ridiculous.

    I wanted to say that geography matters, but not that much. I compared Chile to Costa Rica which is closer and illustrated that we trade with Chile more. I compared Kenya with Somalia which are just as far and showed that for as little as we trade with either, we trade with Kenya a great deal more. I then showed that even though Hong Kong is on the other side of the planet and has half the population of Chile, we still conduct more trade with it and I cited census numbers to back it up.

    The point I was making was that policy matters far more than geography, natural resources, etc. Trade provides the incentives and economies of scale to overcome those obstacles and with ever developing technology (I side with Mr. Kaku over Tyler Cowen who suggested that a technological plateau has been reached in his book The Great Stagnation) those obstacles will only get smaller. Economic freedom (autonomy for producers and choice for consumers) is the most important thing in economic development.

  6. T Payne Says:

    With such a high percentage of peoples prosperity dependent on the evil “corporations”, why continue to badmouth this organization model? Aside from most Government, just about everything else, including churches and non-profits are corporations of some sort.
    As I reflect on the prosperity created in my life, just about all of it is because of the corporate model.
    If the goal is global prosperity, the corporation more likely the solution, not the problem.
    For all those predicting the 100 year out future, first please review the top ten futurist’s predictions from 30 years ago.

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