Why Globalization Will Fail
For the past fifty years, globalization was offered as the answer to all the world’s ills: it would raise standards of living in the developing world, it would create more wealth, nations would understand each other better and eventually trust each other, and so on and so forth.
I’m going to state what is increasingly obvious: globalization is fading in the struggle against nationalism for peoples’ hearts and minds. The world has not become global; instead capital, wealth, classes and class values, as I have mentioned in the previous post, have gone global while leaving most of the rest of the world behind. For the moneyed classes, nations are less important, perhaps even irrelevant. That is happening now as the Chinese economy grows and Chinese companies are expanding their presence to other nations by investing in their financial companies, for example.
But the moneyed classes represent only a comparatively small percentage of the world’s population. Most belong to the middle class, who still see the world in terms of the nation-state. What do they think?
They are becoming more, not less, nationalistic. A recent article shows that Chinese consumers are gravitating to Chinese brands, not western brands. In the online search struggle, search engines become victims of these games.
The simple fact is that although the US and Chinese economies are tightly bound together, and depend on each other as their largest trading partners, they do not trust each other. This trust is getting wider and deeper with the passage of time; it is not getting smaller. People for the most part, still think in terms of national interests, not global interests.
As the rich/poor divide widens, and as the US dollar weakens and the US standard of living starts to head downhill, it will become expedient to blame globalization for the country’s ills. We aren’t there yet, but we will be. Previous administrations and the WTO will be blamed for the shortcomings of globalization. Increasingly, China and the Chinese people will be seen as a threat to western values and the western way of life.
This will make it increasingly difficult for brands to become international. Are they national? Whose side are they on? Who sits on their boards? These are questions they will be asked more and more.
That is why globalization is failing, and will ultimately fail. It’s just that no one wants to take the blame and be the first to make the call.
But that will happen soon enough…
