Translators are big on globalization, it being good for business and all. Plus globalization is good for the globe, so to speak, as globalistas shake hands around the world, more harmony, more prosperity, it’s a small world after all. You know the song. A world of laughter, a world of tears… Even if you think globalization is flat-earth evil, just corporate behemoths sucking up local cultures and spitting out Starbucks, globalization is still filed under “unstoppable juggernaut.”
But what if globalization is all globaloney? That’s what Pankaj Ghemawat of the University of Navarra calls it in his new book, World 3.0: Global Prosperity and How to Achieve It. With only 10 to 25 percent of economic activity happening beyond national borders (most of which is regional rather than international, mind you), globalization numbers don’t quite add up to a global phenomenon.
International mail represents 1% of global mail sent. International phone calls, less that 2% of calls made. It’s a bit brighter digitally, with about 17% of World Wide Web traffic actually being worldwide. Rest is domestic. Foreign-owned patents, 15%; exports as share of GDP 26%; foreign-owned equity, 20%; first generation immigrants, 3%. Nine out of 10 global citizens will never, ever leave their home country.
Not great, but not all that bad, surely. In fact, that might be all the proof that Thomas Friedman needs to prove that the world is flat, that is, “a global, Web-enabled playing field that allows for multiple forms of collaboration on research and work in real time, without regard to geography, distance, or, in the near future, even language.”
Ghemawat trashes him and other globalization pollyannas for ignoring the two key factors behind what really makes the globe go ’round. Distance, in miles, is what keeps the local in global, and culture is close behind. “A 1 percent increase in geographic distance between two locations leads to about a 1 percent decrease in trade between them.” That’s a “Doh!” statement for anyone who’s filled an SUV gas tank anytime recently. (Full disclosure: that’s me… had to get a lock for my gas cap too.) Here’s another golden rule of internationalization: “Two countries with a common language trade 42% more than otherwise.” In the same trade block (NAFTA for example), there’s a 47% increase in trade, and common currency increases trade by a whopping 114%.
Chalk it up to trust. And we trust what we know. Globalization has a long way to go.
Thanks to Michael Shermer, Scientific American‘s official skeptic, for his review of Ghemawat’s reality check, since I haven’t read the book yet.