Is globalisation dead?
Listening to the political rhetoric around walls and protectionism, digesting the shock of the UK Brexit vote and anticipating likely failure of TPP and T-TIP negotiations, one could be forgiven for concluding that the 50 year long march of globalisation is faltering.
There seems to be a pervasive nostalgia around how things used to be when the world was flat, people lived and married in the place they were born, immigration was exceptional, and a job was for life. The American dream was still alive and well, and Britain in Europe enjoyed influence and world standing, particularly in the wake of WWII. The Communists were the bad buys, but we had a wall to keep them in and a nuclear deterrent if we needed it.
The baby boomers of the 60s were the product of this Camelot era and they want it back. They are voting for politicians who promise to turn back the clock, challenge the establishment, renew and protect domestic industries, lower taxes, curb immigration, and restore dignity and national pride to the working classes. This may sound attractive but is a complete fallacy.
To start with the ‘Millennial’ generation do not readily conform to ideas of class and nationalism. They may be disenfranchised with the establishment and political system, but they do not want to turn back time. Believing that walls and regulation will keep out foreigners and protect national industries was disproven in East Germany and the former Soviet Union, and will fail again. Access to ideas, experiences and knowledge is boundless thanks to the internet, and the notion that we can put these freedoms back in a box is doomed from the start.
Once consumers have tasted Belgian chocolate, owned an Italian suit, driven a BMW, stayed in a fine American hotel, used an Apple phone, they will not settle for second best, just because it is locally made though some sense of patriotism. The least developed economies of the world understand and aspire to these things and will trade anything to have them, and this will continue to drive competition and globalisation.
So while FDI and international trade has certainly hit a speed bump, and is being dishonestly maligned by leading politicians, I am certain that in the short term (12-18) months, the absurdity of these insular proposals will be laid bare and the free transfer of trade, ideas and people will march on with perhaps a few new checks and balances.
