There are trends and megatrends in foreign affairs, and globalization – a growing hyper-interconnectedness across borders — falls clearly into the latter category.
The cross-border flow of ideas, technology, communication, transportation, capital, jobs, goods, and services is a central reality in the world today – possibly the most important reality.
It has been accelerating for decades and will continue to do so. Its impact on the world is pervasive and profound.
We experience globalization every day. Political tensions in divided and polarized countries cause disruptive ripples across the globe. A currency crisis endangers the global economy. Shifts in the Chinese economy impact the West. Debt problems in Europe roil the New York Stock Exchange. New tariffs are threatened to stem the flow of immigrants. Soybean markets in Asia upset markets in Indiana. Jobs and investment flow across national boundaries. Multinational firms add jobs here and cut payrolls there.
Everywhere we turn, we see this global interconnectedness of countries, people and events.
Overall, the megatrend of globalization has been a powerful tool for prosperity. It has created jobs and generated enormous wealth in the world. But it is a double-edged sword. While creating opportunity and raising living standards, it can exacerbate income inequality, create competition to lower environmental standards and increase the risk that banking and currency crises will spread.
One problem is that globalization is not global. It does not provide access to opportunities and wealth for everyone. There are winners and losers in an interconnected world.
Globalization has reduced world poverty, but much of that decline has been in Asia, especially in China. In other areas, including parts of the Middle East and Africa, poverty and hardship remain endemic.
It’s not surprising, then, that globalization is under attack. People see its deficiencies and believe it is controlled by elites for their own benefit. They assess globalization according to whether it benefits their daily lives. And the term has developed a negative flavor, even as the multinational institutions that support globalization show their age.
Closely tied to globalization is another megatrend: the swelling turmoil in the world. The Pentagon has a name for this, calling it a period of “persistent conflict.” Pundits say we live in an era of endless war.
Civil wars break out across the globe. Chemical and biological weapons could fall into the hands of hostile states or terrorists.
The Great Power conflicts, like World War II and the Cold War, seem to be suspended, but we are surrounded by instability and turmoil. The postwar international order is fraying.
Refugees have overwhelmed some countries. Terrorist groups have emerged, including non-state actors like Al Qaeda and ISIS, which thrive in fragile states where governments lack the capacity to govern. There is intense competition for natural resources and epidemics of frightening diseases. Climate change creates more powerful storms, heatwaves, flooding, and rising sea levels.
All this can make globalization seem like a deal with the devil. But its impact continues to grow, as the global consensus favors free markets, the march of technology and increased economic integration.
The megatrend of globalization has proven itself durable. It remains our best hope for achieving prosperity in a peaceful world, but we have to keep working to minimize its negative impacts. Ensuring globalization’s benefits are widely shared – and reducing the turmoil that comes with our interconnectedness – are challenges that America faces in order to play an effective role in the world.
By Lee H. Hamilton