Tuesday 21 Aug 2018 | 08:10 | SYDNEY
Tuesday 21 Aug 2018 | 08:10 | SYDNEY

The paradox of globalisation


Hugh White

This post is part of the Globalisation and war debate thread. To read other posts in this debate, click here.

28 May 2010 08:11

This post is part of the Globalisation and war debate thread. To read other posts in this debate, click here.

I agree with Michael Wesley that interdependence raises the costs of competition and conflict. But unlike him, I'm not sure the threshold is raised far enough to keep the world peaceful over the next few decades.

My pessimism is best explained by looking at one of the key paradoxes of the modern world. On the one hand, the bundle of trends we call 'globalisation' seems to erode the power and significance of states, because it boils down to an exponential expansion in the number and significance of international transactions of all kinds – trade, money, data, and travel. 

It seems natural that, as international transactions become more important to all of us, the nation we happen to live in becomes less important to us, and the cost to each of us of disruptions to international transactions rises sharply. It is, as Michael says, an old argument, going back beyond the Manchester School to the Enlightenment, but it has been given a new lease of life as the density of transactions has increased.

On the other hand, the effect of globalisation has been to increase massively the power of states, and in particular, to increase the power of the states with the biggest populations, who have most to gain in aggregate power from the expansion of per capita productivity that globalisation has enabled.

States have therefore been big beneficiaries of globalisation thus far. That's not just because, globalisation notwithstanding, states remain the basis on which all these international transactions are organised and managed, and remain capable of marshaling a big share of the resulting wealth to state purposes. It is also because states remain a remarkably powerful focus of individual loyalty and identity for the vast majority of people around the world, trumping anything expect family. It may be that globalisation, if anything, increased the power of nationality, rather than eroded it.

Hence the paradox: materially we are all more and more dependent on international transactions, but our sense of identity is at least as much, and perhaps more attached to nationality than ever before.

And hence my caution about Michael's optimistic conclusion that economic interdependence will make strategic competition and war prohibitively costly, and hence less likely. I agree with the first part of his argument: that the costs to all of us of any disruption of global transactions is higher now than it has ever been, and that this should therefore raise the threshold for states to engage in competition and conflict.

But I'm much less sure that globalisation raises the threshold sufficiently to reduce the risks of conflict low enough for anyone to relax about it. 

The fact is that the threshold has always been high: war has always been, and been seen to be, expensive, both materially and morally. The threshold nonetheless has often been crossed, because the choices people make on the brink of war are not rational judgements of costs and benefits, but highly emotive impulses reflecting most often their sense of identity. What evidence is there that globalisation has raised the threshold beyond the reach of these deep and still-powerful motives?

Let's look at the prime example. What evidence do we have that the intense interdependence of the US and China has yet had any affect on the probability that each would go to war with the other over Taiwan? More broadly, what evidence is there that either is prepared to put aside its aspirations for regional leadership with the other in order to build the kind of shared regional leadership which alone provides a reasonable prospect that interdependence in Asia can flourish in future? 

To be blunt: until it is clear that the US is willing to treat China as an equal as China's power grows, I will be hard to persuade me that the imperatives of interdependence will reliably trounce the instincts to competition in the relations between states.

Photo by Flickr user digital trash, used under a Creative Commons license.