September 11 is transforming our notions about a raft of subjects, from economics to technology. Thanks to our myopic and narcissistic media and opportunistic, short-sighted politicians, we are only beginning to grasp the ways in which computer networks are changing, even radicalizing much of the world, sometimes in great, sometimes horrific ways. Six months ago, most Americans were stunned to discover how differently others in the world regard us from the way we see ourselves. Globalism is a major reason. Invasive American culture -- from movies, music, fast-food -- have highlighted political and religious differences, from Europe to the Middle East and South Asia. So have networked, hi-tech economies based on information and tech, argues a new book by George Soros.
We seem to be running away from the world, and much of the world hates us for it. Such forces make America not only the world's leading superpower, but probably its most feared and hated nation. As the U.S. evolved rapidly from an industrial to a data-based economy, much of the world hasn't come along, or doesn't want to.
Our technology is running away from the rest of the planet, from genomics to supercomputing to bio-tech research to weaponry. Globalism, arguably the single most significant political issue on the planet even before 9/11, is even more critical now, even though there is little consensus on what it is or how we should feel about it or even define it. Deep-thinking billionaire philanthropist Soros jumps in with a significant new book -- George Soros on Globalization -- in which he advances some exciting and startling ideas about the future.
Anti-globalization protests have become a staple of international summit meetings, Soros points out, a sort of "fragmented potpourri of laments about life in the modern world." A ferocious advocate of open societies, he takes on what's good and bad about globalism, and how we might put it to better use. We'll take up that discussion here.
As Soros points out, 'Globalization' is a much overused term with a wide variety of meanings and contexts. Soros uses it to mean the development of global financial markets and the growth of trans-national corporations, along with their increasing power over national economies. "I believe that most of the problems that people associate with globalism," writes Soros, "including the penetration of market values into areas where they do not traditionally belong, can be attributed to these phenomena."
One could also blame the globalization of information and culture; the spread of television, Internet and other forms of communication; and the increased mobility and commercialization of ideas.
But Soros understandably concentrates on economic issues. Globalization as he defines it, is new. At the end of World War II, most countries strictly controlled international capital transactions. International capital movement accelerated in the early 1980s under Ronald Reagan and Margaret Thatcher, and financial markets became truly global only in the early 1990s, Soros says, after the collapse of the Soviet empire.
That period also happens to coincide with the most explosive growth of the Net and the Web, perfect engines for the new data-driven economies and systems for the rapid movement -- literally -- of capital.
By contrast, as we can see on the evening news most nights, while governments may not be able to restrict the flow of capital, they're still fairly effective at controlling the movement of people. (Although even there, the Net ultimately makes that more difficult, at least in terms of intellectual property and ideas. This kind of content is liquid, no longer confinable within territorial boundaries.
Since capital is the essential ingredient of contemporary production and economies, countries compete to attract it. It's no accident that nations who can't or won't are also incubators for political discontent and terrorism. Globalism has transformed our historic economic and social arrangements. Since capital can move anywhere in seconds, any nation-state's ability to exercise control over an economy has been radically undermined. This was a huge club the British held over the Chinese government during negotiations over the transfer of Hong Kong. The Chinese were forced to be somewhat more democratic when, with the stroke of a key, billions of dollars in capital could have fled Hong Kong in a micro-second, even if its people couldn't.
"The globalization of financial markets," argues Soros," has rendered the welfare state that came into existence after World War II obsolete, because the people who require a social safety net cannot leave the country, but the capital the welfare state used to tax can."
This was no accident, he explains, even if few Americans had any idea it was happening. The Reagan administration (along with Thatcher) was determined to reduce the state's ability to interfere in the economy and, helped enormously by globalization's rise, it succeeded.
So, exuberantly costumed demonstrations aside, globalism is not about to evaporate or even weaken, not any time soon. Quite the opposite: nation-states and their constituents now have to choose between globalism (and its attendant prosperity) or religious fanaticism. This leaves us with the central question:
Next: Is Globalism good or evil?