I am for and against globalization31 October 2018
How can any reasonable, thinking person be against globalization? After all, it promotes economic development, particularly in disadvantaged countries, lowers costs to consumers, and by connecting people around the world, helps to avert conflicts.
How can any reasonable, thinking person be for globalization? After all, it exacerbates income disparities, particularly in developed countries, threatens communities with cultural assimilation, and weakens national sovereignties.
It is remarkable how many people line up either for or against globalization and then dismiss the other side. Who’s right? Neither. Those who embrace globalization are no more thoughtful than those who dismiss it. We should all be lining up for and against globalization, to retain what is constructive about it while challenging what has become destructive. We need globalization in its place, namely the marketplace, and out of the public space.
Unfortunately, the prevailing, cosmopolitan powers of the world— investors, executives, economists, and consultants — mostly line up for globalization, leaving those against it to protest locally, on their streets and in their ballot boxes.1 But their marches and occupations have hardly made a dent in the armor of globalization, while voting for the likes of Brexit and Trump—against what is wrong rather than for what could be right—has not solved anything.
What we call globalization is really economic globalization, because it enables economic forces to prevail over social concerns and democratic precepts. Multinational companies play governments off against each other in their quest for reduced taxes and suspended regulations, while local communities have to compete for jobs that can be no more reliable than the next offer. Globalization may be connected everywhere, but it is rooted nowhere, while sustainable employment takes root in local soil, not on the “globe”.
Hence this force for economic development is fast becoming one for abandoning decades of social and political development. Trade pacts now allow companies to sue sovereign governments over legislation that reduces their profits, while companies such as Uber ride roughshod over local regulations. How about this from an article in the New York Times (23 September 2017), about the city of London’s challenge to Uber: “There is a feeling in the air that regulators should stand up to businesses that simply ignore any rules they don’t like.” No kidding!
John Kenneth Galbraith’s forgotten concept of “countervailing power” can help to understand what has been happening.2 Countervailing forces arise in democratic societies to offset concentrated centers of power, as did the unions in America with the rise of the large corporations. But where are the unions in today’s so-called global village, and what other force has arisen to offset that of the global corporations?
The most obvious candidate is global government, but the United Nations is hardly up to that. The globe may be amalgamating economically, but it remains fragmented politically as well as socially. Indeed, the most powerful international agencies, all ardently economic—the WTO, IMF, World Bank, and OECD—have been the cheerleaders for globalization.
How, then, to face this corporate hegemony? The challenge will have to begin from the ground up. Perhaps never before have so many people been prepared to vote with their feet, their ballots, and their pocketbooks. Thoughtful, concerned citizens, acting in local communities that are connected globally through the social media, can bring direct pressure to bear on objectionable behaviors, while prodding their governments to act more concertedly on their behalf. Communities, after all, have been the places where major social change has often begun—for example, with a tea party in the Boston harbor or a woman boarding a bus in Montgomery, Alabama. From such sparks have come significant groundswells that have transformed societies.
True, the most powerful countries have also been cheerleaders for globalization, or at least for their own global corporations. But other countries, especially on the receiving end of the globalization demands, could act together to push back, instead of being further divided and ruled. Is this not what the European Union has been doing with its challenges to Google and other companies? Here, then, lies one potentially countervailing power to economic globalization. (For other suggestions on dealing with such imbalances in society, see my TWOG “Going Public with my Puzzle.”)
Without restraining the power of economic globalization, we shall be facing greater social disruption, the election of more tyrants, and the further deterioration of our democratic institutions. We certainly need strong enterprises. But not free enterprises. Not if we are to be free people.
© Henry Mintzberg 2018. A similar version of this bog appeared on September 18 in the Sloan Management Review blog, under the title “We must keep globalization in its place: The Marketplace.” For further discussion of balance across markets, governments, and communities, see my book Rebalancing Society. For management education that is worldly beyond global, see impm.org.
Photo by Lisa Mintzberg is of a soap bubble, about 10 centimeter in diameter.
1See the classic article by A.W.Gouldner, “Cosmopolitans and Locals: Toward an Analysis of Latent Social Roles”, Administrative Science Quarterly (Vol. 2, No. 3, Dec., 1957: pp. 281-306). In a similar vein, David Goodhart has distinguished “anywhere” people from “somewhere” people” (in the Financial Times, 17 March 2017). About the latter, he wrote: “…more than 60% of British people still live within 20 miles of where we lived when we were 14.”
2J.K. Galbraith, American Capitalism, The Concept of Countervailing Power (originally published 1952).