This has become an unexpectedly distopian diary. Sorry, but it became more pessimistic as I wrote it. I'm not a deep researcher or facts person so this is more of a set of contestable assertions that are there to prompt a conversation about how actual the threat really is.
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In my comments on various threads I've occasionally referred to the end of globalisation being imminent as an accepted concept amongst us. However I put it into a thread on Sunday and Migeru responded that it was an interesting idea and wanted me to put some flesh on the bones.
There are three aspects to my belief that the whole globablisation project is fast running onto rocks and that economies which are too dependent upon it are likely to suffer unrecoverable damge.
These are;-
Globalisation is dependent upon cheap transportation
Goods manufactured by cheap labour has to be transported to areas of consumption, which are invariably areas of expensive labour. Whilst transportation costs are relatively low globalising tactics can continue apace.
However, we may be gradually returning to the not-so-distant era where only high-profit value goods were worth tranporting long distances. As Jerome's many articles state, the era of cheap fuel will soon be over. Prices may rise in a catastrophic surge from an unexpected supply shock or they continue to drift up well ahead of inflation levels as global demand increases in the next couple of years. Either way, the energy relationships of 2010 will not resemble those of 2006. And if the low profit goods such as cheap clothes and shoes and out of season strawberries don't make it any more, then practically all of the ratinalisation for globalisation falls through the floor.
Tax Regimes
Of course, the real reason for globalisation isn't the movement of goods, but the free movement of capital. As I discussed in my diary here
http://www.eurotrib.com/story/2006/9/4/104317/7025
tax regimes in the global economy are being "reformed" to allow the vast sums of Corporate profit to move beyond taxation control into artificially maintained low-tax and unregulated zones where totally corrupt and less corrupt money may mingle and multiply.
Unfortunately to pay for the benefits that make civic society bearable, taxation must disproportionately fall on other revenue streams such as that of working and middle class people. This has led to an increasing burden on the middle classes in the USA over the last 25 years who are finding that health care and education are becoming unaffordable, a trend that is likely to be repeated elsewhere as the aggressive anglo-American economic model erodes the growth capabilities of alternate models.
This has also had a knock-on effect on the quality of democracy. As critics of the book "What's the matter with Kansas ?" have pointed out, Kansas doesn't vote republican because the poor vote against their vested interest. Increasingly faced with parties who all kow-tow to globalised interests, the poor are simply failing to vote at all, leaving the republicans to win. This is becoming increasingly true in the UK where there is a choice between two neo-conservative Atlanticist parties with no substantive policy differences in any critical area of economic approach.
Henry Ford always argued for high wages stating that he needed people who could afford to buy his cars. For years Corporates have assumed that they can cut their own costs by shedding staff and reducing wages as some other company will pay staff a decent wage to keep the market operating. However, this attack on their take-home pay and employment chances means that the numerous middle class and wealthier working classes have less disposable income to fund the necessary market turnover. Finally greed has caught up with them, there's nobody left to afford their products apart from the vanishing few who've sucked up all the money. And you can't keep an economy running on the spending of one percent
of the population.
Global Warming
Unless the more alarmist predictions are accepted this is the least urgent of the three. Nevertheless we are approaching a time of substantial weather-related disruption to trading patterns.
Agriculture will struggle to provide the volumes of food needed to prevent starvation as weather patterns become unstable and unpredictable. If the retreat of glaciers continues apace then agriculture may also find itself pressed for sufficient irrigation as rivers dry up during summer, particularly in areas such as S England and Spain where the aquifers have been aggressively over-utilised as "short-term" measures. If substantial melting occurs in Greenland and Siberia, not only will sea levels rise substantially, but methane out-gassing will occur on an unprecedented scale exacerbating the situation.
As the waters rise, coastal and floodplain developments will be inundated, ports may become unusable as facilities flood too regularly.
So we face a concatenation of three trends, each of which, even the consequences of peak oil, could be avoided if only political will were available. Sadly, due to the increasing disenfranchisment of those who might make a difference, we are left with the politics of those who've created the situation. So, no change in direction will be forthcoming in the timescales necessary to prevent disaster.
Thus I conclude the Era of Globalisation is effectively over. Maybe not today, maybe not next year, but well within a decade the lights will start to go out and we will have a nightfall the like humankind has never experienced.
