Modern Globalization

This column for Businessworld in India explores the many facets of globalization manifested in all aspects of life. By exploring the interconnections of the globalization forces, columnist and YaleGlobal's editor Nayan Chanda hopes to build better understanding, pointing to the dangers and opportunities. Like it or not, humanity is bound together by invisible threads of connections born of the aspirations, fears and ambitions of billions of people. Despite our many differences, the world's inhabitants are fated to sink or swim together. – YaleGlobal

Modern Globalization

Historical interconnections among communities worldwide have multiplied manifold in recent times
Nayan Chanda
Saturday, January 5, 2008

Even a casual observer of world financial markets will have noticed that localised events often have much wider global ramifications. The collapse of the US subprime mortgage market produced a ‘credit crunch’ that forced some of the world’s largest financial institutions to write down billions of dollars and eject their chief executives. News earlier this year that a patient with contagious tuberculosis infection was out on international travel caused worldwide scare. The health and economic fates of many, thus, depend on the ebbs and flows of modern globalisation. One in which wealth can be created and destroyed in seconds, and in which ideas, information and products can be quickly and cheaply disseminated to the furthest corners of the earth, and an uncontrolled, contagious pathogen can wreak worldwide havoc. In this sense, we are all bound together by globalisation, a much talked-about but little understood phenomenon that has polarised opinion from Davos to Dhaka.

With the collapse of the USSR, the ideological fault line lies along globalisation, broadly dividing the Left and the Right. The division is not unreasonable as modern globalisation involves rapid expansion of capitalism — and its problems. But an economic- and business-based explanation of the phenomenon is like accepting a blind man’s description of the elephant as a leathery column with big toes. As I have argued in Bound Together: How Traders, Preachers, Adventurers and Warriors Shaped Globalization, globalisation is best understood in its long historical context. The first steps involved homo sapiens leaving Africa and acquiring different shapes over many millennia. Ever since they developed different lifestyles and cultures, an enduring historical trend has been the desire to connect with each other. That process has accelerated, and created an interdependent world in which we take for granted our global tastes in music, film and even food.

While drinking Indian tea or Colombian coffee, one never considers that only a few hundred years ago there was no tea or coffee in either country. Kiwi fruit grew in China, not New Zealand. Before Portuguese and Spanish traders introduced Mexican chilli pepper (called chile in Aztec) to Asia, there was no hot curry or sizzling Sichuan dish. Imagine a time when Ireland and Russia had no potatoes, Italian pasta had no tomato sauce, and Cuba, no sugar. Not only food and beverages, but spices and condiments, and also the most common products — from paper to paperclips, guns to porcelain — owe their spread to globalisation. It took hundreds of years before Chinese paper-making technology reached the West or India. Now globalisation delivers the latest model of iPod to any part of the world within days. A curse of early globalisation — bubonic plague — took 80 years to spread in Europe; in 2003, the SARS virus, transported by passengers on jet planes, reached three continents in as many days.

Although the motivations behind the transfers are essentially the same, the rapid transportation of goods, services, information and culture has created a new dynamic. Instant communication means that all socio-political and economic impacts of interconnections are in plain view of the world’s public, including the poor and marginalised. When thousands of Indian weavers, once champion exporters, were displaced by the Industrial Revolution, few knew, or cared, about their plight. Today, the decision of multinationals to lay off workers in the US and hire thousands in India hit the internet instantaneously and provoke outcries.

Another driver of globalisation has been migration. War, famine and the search for a better life have led thousands to leave their homes. Earlier, they faced many obstacles, but not high barbed-wire fences and border guards. Still, the process continues. Emigrants remit billions of dollars home, closely tying their economies to the world. On the other hand, the presence of large unassimilated minorities in the West also provokes xenophobic sentiments.

This column, to be published fortnightly, will explore the many facets of globalisation manifest in different aspects of life. By showing the interconnections of the forces of globalisation, the column hopes to help understand them, and point to the dangers and opportunities they bring. Whether we like it or not, humanity is bound together by invisible threads of connections born of the aspirations, desires, fears and ambition of billions of people. Despite our differences, we are fated to sink or swim together.

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