The global economy, global trade, global tourism, and immigration are here to stay. The technology of inexpensive communication, GPS, bar codes, cheap computing, containerized shipping, and a host of other innovations guarantee that supply chains will remain global. Global supply chains ensure that the food and other manufactured goods we need are made as efficiently and effectively as possible. We are part of a global economy, and if you want to see the economic impact of isolation all you need to do is look at North Korea and Iran. The market forces that push the global economy have more political potency than the nostalgic nativists pushing in the other direction. That could change, but I doubt it.
That’s because in addition to the economic power of the global economy, young people have grown up with inexpensive, instantaneous communication and access to global travel. They find exposure to foreign cultures, foods, and people to be interesting and exciting. Here in America, we also have people like me who are attracted to diversity and immigration. I am delighted to live in a city where 40% of those who live here were born in other countries. If the future belongs to those that are creative, smart and entrepreneurial, drawing on the entire globe for talent seems to be the way to go. The master’s programs I direct at Columbia enroll students from all over the country and all over the world, and it is an exciting and successful learning experience for almost everyone.
When I traveled to Europe for a month after I graduated college in 1974, phone calls cost as much as a night in a hotel (and more than the hostels we stayed in) and we communicated with our families with something called post cards and aerograms (lightweight air mail letters). Today, young people use FaceTime, Skype, text, and phone to stay in touch with folks everywhere at any time, and the price of communication is virtually zero. The foreign becomes familiar. Xenophobia can’t gain traction when you have friends on every continent. That is a growing reality for many—but not for all, as the Republican presidential race demonstrates. There is little question that the images of foreign people and places can be manipulated for propaganda and political purposes. Many Americans can see the world on the web, but do not have the resources to touch it and experience foreign travel for themselves. But when I weigh the political clout of those who want to build walls against the power of those who benefit from globalization, I believe globalism wins. In addition, the appeal of global interaction for those who can afford it, and the American self-image as a nation of immigrants, is stronger than the tendency toward isolation.
But globalization brings costs along with benefits. Protecting labor from businesses that are highly mobile and multinational is one issue. Another is that with the creation of a global culture, how does one maintain a sense of place, community, and nation against the forces of homogenization? Some of the pushback against global forces derives from appropriate fear of a loss of control and some from a sense that fothose attributes that made us distinctive can no longer survive. These are real concerns as local culture competes against the shiny new global culture. Food, art, music, and media can reflect distinct local forms of expression. But the forces of homogenization are everywhere. Your Starbucks latte can be purchased in Hong Kong and Hawaii, and it will look and taste the same.
As important as global economic and cultural forces may be, I see the push for distinctive identity and a sense of place ensuring that communities and nation states will maintain their power in a more globally interconnected world. While part of the force behind the Brexit and Trump movements is racist xenophobia, an element of these movements is caused by a sense of lost control due to foreign forces beyond our reach. Trump, a primary beneficiary of the global economy with his global brand and real estate holdings, is cynically and effectively manipulating this anger and frustration to generate support for his inconsistent and incomprehensible policy positions. His success is in part due to his message that globalization results in loss of control.
It is true that globalization and our modern urban economy reduces independence and increases interdependence. When a rural family moves off a self-sufficient farm to a cosmopolitan city they lose control of their supply of food and shelter. They gain access to higher income, intellectual stimulation, health care and other resources, but they are not as self-sufficient as they were before. Nostalgia is a funny thing, though. When you think of the agrarian past, you might forget about the droughts, storms, pestilence, and other sources of crop failures experienced over the years; the good old days weren’t always all that good. Nevertheless, the new global economy presents challenges to those who benefited from America’s industrial economy. It is not simply trade and immigration that is reducing the market for labor, however, but also automation. Go to a construction site and watch the number of prefabricated pieces being hoisted by crane into place. Where once skilled construction tradesmen would appear in great numbers, today we see a few people operating machinery. Many modern factories also show the growth of automation. Workers sit in control booths operating machines and workers on the assembly line are often checking that the machines are performing as designed. Not all factories look like this, but the trend line is obvious.
The issue for workers everywhere is how do we protect ourselves from the unseen and unaccountable force of the global economy? Unions and government regulation won’t work, because businesses are highly mobile and multinational. The latest trade agreements are built on the premise that in return for free trade, nations must enforce environmental and occupational health and safety regulations along with some form of living wage. It is far too early to see if these mechanisms work. The other forms of protection that younger workers are adopting are to accommodate the brain-based economy and constantly obtain the new knowledge that businesses seek from their employees. This is an insecure existence and, when coupled with the crushing level of educational debt incurred by some of our young people, is a prescription for political instability.
There are no easy answers to the issues generated by the global economy. Ensuring that the planet doesn’t get used up and discarded by economic growth is a fundamental challenge. National regulation can control localized environmental problems, but are less effective in regulating climate and global marine impacts. Human labor faces the same challenges. Still, the global economy is constrained by national and local forces. The planet’s environment is a precondition for human life, and so there are physical constraints on the global economy. Political stability is required for trade, as are consumers with resources to buy goods and services, and so national employment policy is necessary to ensure the healthy economy needed by global corporations. Finally, local control over the use of land constrains where global corporations can locate. While most localities compete for companies to site facilities, in addition to tax breaks they do so by demonstrating the quality of their community: its natural environment, infrastructure, schools, and political stability. Nations and communities can influence the global economy if they act strategically to defend their interests.
We have entered into a more interdependent global economy with many benefits, but despite its appeal and power, there are political and physical forces that will constrain its power. The need for a sustainable environment requires care in production, consumption, and waste management. The need for stable and growing markets requires a labor force that has meaningful work and is motivated. The human need for community and a sense of place will constrain the tendency toward a mindless homogenization of economic and social trends.
Transitions are painful. New York City’s transformation was not easy. We changed from an industrial and commercial city to a global capital of ideas, communication, health care, education, business and tourism. After World War II, the garment industry was our largest business. Today, all those factories are long gone. The transition was so difficult that the city nearly went bankrupt in the mid-1970s. Drugs, crime, grime and decay were everywhere and the city lost a million people. Today, the city glistens; new buildings and parks are everywhere (along with ubiquitous tour buses). But income inequality is growing, and without subsidized housing the working and middle class would already be gone. The problems we face are new and are created by technologies and organizational dynamics new to the world. The old solutions will not work, Trump’s nostalgia and racist ranting won’t work, and we need to experiment with new solutions to these new problems.