Globalisation is an Anomaly and Its Time is Running Out
by James Howard Kunstler
The big yammer these days in the United States is to the effect that globalisation is here to stay: it's wonderful, get used to it. The chief cheerleader for this point of view is Thomas Friedman, columnist for the New York Times and author of The World Is Flat. The seemingly unanimous embrace of this idea in the power circles of America is a marvellous illustration of the madness of crowds, for nothing could be further from the truth than the idea that globalisation is now a permanent fixture of the human condition.
Today's transient global economic relations are a product of very special transient circumstances, namely relative world peace and absolutely reliable supplies of cheap energy. Subtract either of these elements from the equation and you will see globalisation evaporate so quickly it will suck the air out of your lungs. It is significant that none of the cheerleaders for globalisation takes this equation into account. In fact, the American power elite is sleepwalking into a crisis so severe that the blowback may put both major political parties out of business.
The world saw an earlier phase of robust global trade run from the 1870s to a dead stop in 1914. This was the boom period of railroad construction and the advent of the ocean-going steamship. The great powers had existed in relative peace since Napoleon's last stand. The Crimean war was a minor episode that took place in backwaters of Eurasia, and the Franco-Prussian war was a comic opera that lasted less than a year - most of it the static siege of Paris. The American civil war hardly affected the rest of the world.
This first phase of globalisation then took off under coal-and-steam power. There was no shortage of fuel, the colonial boundaries were stable, and the pipeline of raw materials from them to the factories of western Europe ran smoothly. The rise of a middle class running the many stages of the production process provided markets for all the new production. Innovations in finance gave legitimacy to all kinds of tradable paper. Life was very good for Europe and America, notwithstanding a few sharp cyclical depressions and recoveries. Trade boomed between the great powers. The belle époque represented the high tide of hopeful expectations. In America, it was called the progressive era. The 20th century looked golden.
It all fell apart in 1914. Historians are still baffled about what really brought on the first world war. What did France or Britain really care about Austrian archduke Franz Ferdinand, heir to the throne of a country already in deep eclipse? There were no active contests over territory at the time, not even in the Asian or African colonies. And yet the diplomatic failures of that fateful summer led to the great slaughter of the trenches, the death of a substantial portion of the younger generation, and a virtual nervous breakdown of authority in politics and culture. It would take a depression, fascism, and a second world war to resolve these issues and a new round of globalisation did not ramp up again until the mid-1960s.
It may be significant that the first collapse of globalisation occurred as the coal economy was transitioning into an oil economy, with deep geo-political implications for who had oil (America) and those who might seek to control the other major region closest to Europe that possessed it (then the Caspian, since Arabian oil was as yet undiscovered). The first world war was settled by those nations (Britain and France) that were friendly with the greatest producer of oil most readily accessed. Germany was the loser and again in the reprise for its poor access to oil. Japan suffered similarly.
We are now due for another folding up of the periodic global trade fair as the industrial nations enter the tumultuous era beyond the global oil production peak, which I have named the long emergency. The economic distortions and perversities that have built up in the current era are not hard to see, though our leaders dread to acknowledge them. The dirty secret of the US economy for at least a decade now is that it has come to be based on the ceaseless elaboration of a car-dependent suburban infrastructure - McHousing estates, eight-lane highways, big-box chain stores, hamburger stands - that has no future as a living arrangement in an oil-short future.
The American suburban juggernaut can be described succinctly as the greatest misallocation of resources in the history of the world. The mortgages, bonds, real estate investment trusts and derivative financial instruments associated with this tragic enterprise must make the judicious goggle with wonder and nausea.
Add to this grim economic picture a far-flung military contest, already under way, really, for control of the world's remaining oil, and the scene grows darker. Two-thirds of that oil is in the possession of people who resent the west (America in particular), many of whom have vowed to destroy it. Both America and Britain have felt the sting of freelance asymmetrical war-makers not associated with a particular state but with a transnational religious cause that uses potent small arms and explosives to unravel western societies and confound their defences.
China, a supposed beneficiary of globalisation, will be as desperate for oil as all the other players, and perhaps more ruthless in seeking control of the supplies, some of which they can walk to. Of course, it is hard to imagine the continuation of American chain stores' manufacturing supply lines with China, given the potential for friction. Even on its own terms, China faces issues of environmental havoc, population overshoot, and political turmoil - orders of magnitude greater than anything known in Europe or America.
Viewed through this lens, the sunset of the current phase of globalisation seems dreadfully close to the horizon. The American public has enjoyed the fiesta, but the blue-light special orgy of easy motoring, limitless air-conditioning, and super-cheap products made by factory slaves far far away is about to close down. Globalisation is finished. The world is about to become a larger place again.
James Howard Kunstler is the author of The Long Emergency: Surviving the Converging Catastrophes of the Twenty-First Century.