Globalization is drawing a lot of attention these days, not all of it good (see: Brexit, Donald Trump, the rise of populist parties around the world). But globalization is an evolving force and will ultimately win out.
Nobel prize-winning economist Robert Shiller seems to agree with my reasoning as he writes for Project Syndicate that the next revolution "likely sometime in the twenty-first century, will challenge the economic implications of the nation-state."
The revolutions Shiller is writing about are not changes that come about by war or by arms in any fashion, but are revolutions "operate in the minds of humans and are spread-eventually to most of the world-by language and communications technology. Ultimately the ideas they advance become noncontroversial."
I have referred to the revolution that Shiller speaks of as the spread of information, something that history has shown to be inclusive and pervasive, even if postponed temporarily.
Shiller concludes that "Ultimately, the next revolution will likely stem from daily interactions on computer monitors with foreigners whom we can see are intelligent, decent people-people who happen, through no choice of their own, to be living in poverty."
This growing fact "should lead to better trade agreements, which presuppose the eventual development of orders of magnitude more social insurance to protect people within a country during the transition to a more just global economy."
But, it is this transition that is worrisome.
This worry has resulted in many defenders of globalization to argue that globalization is not an all or nothing system. Harvard professor Dani Rodrik writes in the Sunday New York Times that "Globalization evangelists" have hurt themselves by pushing economic globalization too far, "toward an impractical version that we might call 'hyperglobalization'" and maybe need to back off some to pursue "a more moderate form of globalization."
Hyperglobalization, Rodrik emphasizes, has relied too much on just pushing the benefits of freer markets, both financial and trade, without fully recognizing the needs of sovereign nations and the need of these nations to protect their citizens. To provide, as Shiller writes, "more social insurance to protect people within a country...."
Nations are coming from different places, with different histories, and different cultural and governmental backgrounds. Just tossing everything open as the proponents of hyperglobalization want can lead to disruptions, dislocations, and defensive rejection. The growing influence of populism throughout the world is just one noticeable response to unrestrained globalization.
Rodrik argues, and I agree, that "there is no single way to prosperity." To Rodrik, globalization must work to promote democracy, not the other way around. Democracy in this case means allowing countries to find their own way to freer markets, not just force freer markets on a nation and let them then work out the consequences.
The strongest arguments for freer trade and further globalization, to me, is that it eventually leads to more prosperity, rising income for the middle- and lower-classes, and greater connections with the world.
The important thing that we need to learn, however, is that we cannot force greater globalization on others. The only way to really succeed in globalization is to set the example ourselves and produce results that out nations would like to achieve.
In the process we don't tell them to do it or force them to do it. We can only control ourselves and set an example to others.
Behind this all, as Shiller suggests, is the spread of information.
We need to be open and transparent to other nations and share what is happening. Then, we need to be available to consult with them and advise them on how they might be able to achieve similar result. We can be prepared to be a friend.
In this way, as Rodrik suggests, countries can "make their own choices about the institutions that suit them best."
They can "protect their institutional arrangements and safeguard the integrity of their regulations."
International economic negotiations can then support "domestic policy autonomy, while being mindful of the possible harm to trade partners."
"Global governance" can then "focus on enhancing democracy, not globalization."
And, finally, nondemocratic countries can be dealt with "where the rule of law is routinely flouted and civil liberties are not protected."
For globalization to continue on and bring benefits to those that join the world community, Rodrik writes that we must avoid the situation in which "the social strains of hyperglobalization will drive a populist backlash that undermines both globalization and democracy."
In this way, we can further support and better construct free-trade agreements like the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.