My Weekly Reader 23 July 2018.

“Globalization” means the trade in goods and services, the flow of capital, and the movement of workers across national boundaries with little or no national constraints.  This is an old story in human history, but it accelerated dramatically after 1945[1] and it has moved at astonishing speed since 1990.[2]  Globalization has spawned disruptive costs that accompany its immense benefits.  Much attention has focused on some of the costs more than on the benefits.

The political reaction against globalization commands the headlines.[3]  Examples include President Trump’s “America First” policies of tariffs and limits on migration; the British vote to leave the European Union (“Brexit”); and Angela Merkel’s suddenly precarious leadership of Germany.  The most persuasive interpretations see this reaction as rising from two sources.  One is the unequal distribution of both the benefits and costs of globalization.  The other is the resulting discrediting of the elites as leaders in the eyes of everyone else as followers.

One can point to many flaws in democratic governance.  However, part of the current problem is that democracy actually works.  Donald Trump won the 2016 election; a narrow, but real, majority of British voters chose “Brexit”; Italian voters supported the current coalition of anti-immigrant, anti-EU parties that governs the country.  Many of the reforms seem intended to blunt the responsiveness of politicians to the popular will.  These include giving the president of the United States more authority to commit the country to treaties that could not pass the Senate; extending the time between elections to buffer politicians from the public moods; raising the pay of politicians so that a better class of person will go into politics; and instituting civic literacy tests for voters.

Trends that have nothing to do with globalization, but which will rock a globalized world economy get lost in the shuffle.[4]  For example, in Western countries, robots look like a mechanical version of China: low-cost, high-productivity workers.  In developing countries, however, they are just as great a challenge.  Hundreds of millions of people in China, India, and elsewhere have been pulled out of abject poverty by industrialization.  Their jobs, too, are at risk.  Developed countries will have no incentive to off-shore production and developing countries will have to compete with their own robots.

Then soon–but possibly not soon enough–a demographic shift will occur from low birth-low death to low birth-high death.  The United States already depends upon immigration for its population growth (and the financial stability of Social Security).  Japan and many European countries (Germany and Italy for example) are in much worse shape in terms of their young workers-elder retirees ratios.  China will soon enter the ranks of countries this imbalance.  How will different societies pay for their aged, non-working populations?

[1] After the Second World War, the United States led the construction of an open “Free World” economy through institutions like the World Bank (International Bank for Reconstruction and Development), the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT).

[2] The collapse of the Soviet Union discredited centrally-planned, non-market economies in the eyes of previous true believers.  Russia, the former “captive nations” of the Soviet Empire, and the Peoples Republic of China all adopted capitalist market economies.  Many other leftist economies in the developing world (notably India) did the same thing.

[3] Dambisa Moyo, Edge of Chaos (2018).

[4] Ian Bremmer, Us vs. Them: The Failure of Globalism (2018).

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American Women Playing Basketball in Europe.

In November 2014, Bria Hartley and Kayla McBride were newcomers at the start of their first season of European basketball. By March 2015, the season was winding-down for Diana Taurasi. Their experiences illustrate the spread of American sports abroad that matches the growth of soccer in the United States; the challenges and rewards of living in a different country; and the different approaches to civic life in Europe and America.

Most American sports teams are run on a business basis. Many European towns regard successful teams as a source of civic pride that more than offsets any monetary cost. European women’s teams generally benefit from sponsorship by local governments or subsidies from soccer clubs. As a result, there are teams all over the place.[1] In Russia the “oligarchs” who rose up after the collapse of Communism and were brought to heel by Vladimir Putin pour in money without regard to the market pay-off. Instead, it’s a form of public relations. Company teams give a sense of pride to the employees. The companies view the teams as “socially-oriented projects.” To raise the level of play and to provide models for the local girls striving to excel, the teams bring in American players. In Europe, the pay is about double what players can earn in the Women’s National Basketball Association (WNBA). In Russia, it can be vastly higher. Over the last decade, hundreds of American women basketball players have gone to Europe during the American off-season.

After playing a season in the WNBA, in Fall 2014 Bria Hartley and Kayla McBride went to play for a team in Sopron, Hungary. Their early experiences surprised them, not always in a good way. Communications were a problem: the landlady at Hartley’s first apartment spoke little English (and Hartley’s Hungarian was—understandably—not all she might have wished it to be); there was a feeble Wi-Fi connection. European wiring systems aren’t always up to the standards of urban America: McBride feared she had blown up her Xbox on one occasion (sparks flying). European appliances, like refrigerators, are small and Europeans shop every day or every other day. There’s nowhere to go in Sopron between practices. By American standards, there are no tourist attractions; just a bunch of Medieval, Renaissance, and Baroque architecture. By American standards, there is no place to shop; no malls, just local markets.[2] Although Vienna is less than fifty mile away and the team gave the women cars, neither one knew how to drive a manual transmission and the street signs are in Hungarian and German. At nighttime, the city can seem a little like the set of a horror movie: no streetlights, an inconstant hallway light.[3]

Even the team itself is difficult to penetrate. American women players very often find apartments in the same complex, but the Europeans scatter around town. Many of the local players have some English. So, on the court in practice, English is the “lingua franca.” However, off the court, Hungarian is easier for the majority. So, they’re lonely.

They seize on the familiar: a WiFi café where they can e-mail home; a Tesco (the European version of Walmart); brands with American names like Heinz, even if it isn’t exactly ketchup that comes out of the bottle.[4] They call home a lot, they go home during the holiday break, and their families plan to visit.

Diana Taurasi’s situation is both very different and similar. She has been playing off-season basketball in Russia for seven years.[5] She now plays for the Ural Mining and Metallurgical Company’s Yekaterinburg team. The money is vastly better than what she can make in the WNBA, even playing for the championship Phoenix Mercury. The Mercury pays her a tad over $100,000 a year; Yekaterinburg pays almost $1.5 million.[6] Taurasi has a far more luxurious life and more supportive environment than do Hartley and McBride. She has her own translator, her own driver, and a free apartment in a very desirable district. Also, Taurasi’s team has been together longer and has older players, so it hangs together much better than does the team on which Hartley and McBride play. They go out for dinner and drinks, catch a drag show, go to the skeet range. Finally, by experience, Taurasi was more suited to adapt. She is the child of Argentine immigrants to the United States.

Still, playing in Russia presents all sorts of contradictions to Taurasi that don’t appear for McBride and Hartley. Yekaterinburg has a Hyatt with a luxury spa and rows of demoralizing Soviet-era workers’ tenements; it has oligarchs with private jets and pre-game tailgaters cooking chickens that they slaughtered that morning; championship games can draw 4,000 more-or-less sober miners. Shabtai von Kalmanovic, a KGB officer-turned-businessman who recruited Taurasi to play for his Moscow Spartak in 2006, got shot to bits in 2009. The killer has never been found. That murder taught Taurasi something about Russia. She remarked after the assassination of Boris Nemtsov, “They’re never going to find [the killer], and if they do, they’ll pin it on some guy from Chechnya.” The worsening of Russo-American relations has made many Russians (80 percent in one poll) anti-American. Even among the team’s fans, Taurasi can feel it building up.

In short, it’s a lot like study abroad or working abroad. Sue Bird, a WNBA player with a decade of experience in Russia, advises: “just relax because it’s really not that bad. Once you get comfortable and find your way, you’re good to go.”

[1] Seth Berkman, “Overseas, Lost in Transition,” NYT, 11 November 2014.

[2] There are, however, a great many low-cost dentists. This makes Sopron a Mecca for the chewing-impaired.

[3] Really, all that was needed was the goalie for a hockey team to be living in the same building.

[4] See: “Pulp Fiction” (1994, dir. Quentin Tarantino).

[5] Charly Wilder, “Where the Money Is,” NYT, 18 March 2015.

[6] So, when her Russian coach asked her to sit out one American season to ease the wear and tear on her 32 year-old body from playing year-around, she agreed.

What is globalization?

“Globalization” has been going on for a very long time, but in the last quarter of a century the degree of globalization has increased dramatically.

The ancient “Silk Road” trade route connected East Asia, South Asia, the Middle East and Europe. Sailors, caravan drivers, missionaries, and the odd tourist carried word of one civilization to another. (Bits of Roman armor have been discovered in Vietnam.)

The “Voyages of Discovery” created European empires of Trade in Asia and of Settlement in the Americas. Europeans (willing) and Africans (unwilling) moved to the Americas; cotton, coffee, corn, tomatoes, tobacco, potatoes, and Aedes aegypti all crossed the oceans for the first time.

Industrialization in the 19th Century spread Western power, ideas, and patterns of economic development all over the globe in new ways and to a greater degree than before. European investment poured into American, Indian, and Chinese railroads, and into the Suez and Panama canals; the telegraph eliminated time in sending messages; millions of people migrated.

The rise of Communism between 1919 and 1989 sealed off much of the world from Western Capitalism. These places needed scientists, doctors, and engineers, so they built up an educated elite. Then the collapse of the Communist model led to the opening of Russia, Eastern Europe, and China to the world market. Countries like India, much of Africa, and Latin America had all copied parts of the Communist model. After 1989 they also opened up. Low-skill jobs flowed toward low-cost producers who had to employ and feed poor people as best they could. Making steel, sneakers, T-shirts; assembling computers; and processing chicken all migrated.

The collapse of Communism roughly coincided with the development of the Internet for commercial uses. This, too, wiped away barriers. Call centers in India sprang up, making my afternoons a living hell. At the same time, angry Russian techies who had lost their cushy jobs with NepoCom went in for cyber-crime against Western businesses.

The whole world suddenly became more like One World than ever before.

 

It always has been driven by economic forces, but it always has had huge effects in every other aspect of human life. Here are a few examples.

On the one hand, the world is organized into nation-states, but there aren’t any borders in the atmosphere. Green-house gases emitted by one country affect every country. On the other hand, hundreds of millions of people live in environmentally-fragile places, but they are driving for industry as the path to a better life. What happens when 1.3 billion Chinese decide that they all want a car, just like 300 million Americans? I suppose we could tell them to stick to bicycles, but that seems kind of racist. Maybe we should go back to bicycles to set a good example?

Millions of people in poverty-stricken “failed states” want to get to some place that is successful. Even if they don’t speak the language, can’t read or write beyond an elementary school level, belong to a traditional culture that devalues women, and have spent their working lives behind a water buffalo. It will get worse if their country is about to go under water.

You can get a kidney transplant done for $5,000 in India (plus airfare and hotel); you can get SRS done for $16,000 in Thailand (plus airfare and hotel).

Rihanna is from Barbados; Frankie Joe Rukundo is from Rwanda; “Narcocorrida” is popular on both sides of the Mexican-American border; some of the most interesting American students consider themselves “otaku”; three French brothers produced “Assassin’s Creed.”