The New Backlash Against Globalization

PRINCETON – There was a palpable sense of discomfort at the latest G7 summit meeting in Ise-Shima, Japan. By the time the leaders of the world’s major developed economies meet again, there is no telling which of them will be populist insurgents. President Donald Trump could be representing the United States, or President Marine Le Pen could be representing France. They could be sitting down with British Prime Minister Boris Johnson, Italian Prime Minister Beppe Grillo, or even German Chancellor Frauke Petry. All of them would be championing nationalism and isolationism, in one form or another.

The backlash against globalization has been with us for two decades. In the late twentieth century, it looked as if the world was moving toward convergence, with people everywhere consuming the same products. McDonalds exemplified that kind of globalization, and smashing up the chain’s stores became a standard form of anti-globalization protest.

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Around the world, toxic political leaders and dangerous policies have suffered important recent setbacks. Project Syndicate commentators explain why – and how the shift in political momentum might be sustained.

But lately, the character of globalization has been changing, and so has the backlash against it. Though the world is still becoming more interconnected, there is a sense that we understand foreign people less. In response to changing – and increasingly particular – consumer preferences, companies are relocating production closer to the markets where the goods will be sold. This has weakened growth in international trade.

Such “on-shoring” is not new. In the 1970s and 1980s, Americans worried that the US would be inundated by Japanese cars; so they began to produce those cars at home; today, most of the “Japanese” cars sold in the US are American-made. But now the reversal of product globalization is easier than ever, thanks to progress in robotic engineering and the development of processes like 3D printing.

As a result, criticism of globalization today tends to focus less on trade issues. But this shift does not only reflect the slowdown in trade growth. Rich-country consumers have become far more comfortable with – even reliant on – foreign products, from constantly upgraded electronics to the cheap “fast fashion” that has become predominant throughout the advanced economies.

Instead of rejecting foreign products, opponents of globalization today are rejecting foreign people. Disputes over investor protection clauses in trade agreements like the Trans-Pacific Partnership or the Transatlantic Trade and Investment Partnership focus on concerns that arcane tribunals protecting the interests of foreign corporations can undermine national sovereignty. Then there is the global refugee crisis; in Europe, in particular, angst over the influx may well be the harbinger of a broader rejection of immigration from failed and impoverished states.

Why are advanced-country populations so fearful of outsiders? It is not as if they have never been exposed to other cultures. Many of these countries’ citizens are constantly traveling to far-flung destinations, and hundreds of millions of people from all over the world make their way to advanced countries annually.

The problem lies in how we travel. Nowadays, we are more likely to have quick, superficial experiences than to immerse ourselves in a culture. But, as modern game theory teaches, a one-time interaction is very different from ongoing contact. If participants know that they are having a unique and finite experience, they have no incentive to build a basis for deeper understanding or cooperation. Continual exchange is needed to foster trust.

The result of today’s superficial approach to travel is evident in any major tourist destination. Service establishments have little motivation to provide good or even honest service to people who are surely never going to return. Restaurants unsmilingly serve food that is mediocre (or worse); taxi drivers swindle; hoteliers lie about their facilities.

Moreover, the game may be subject to interruption. Where tourism has become a pillar of foreign earnings, it also becomes an inviting target for terrorists who have built their ideology on anti-Western sentiment. Just a few attacks in places like Bali or Red Sea resorts are enough to bring about profound economic destabilization.

Tourism companies respond to such risks by minimizing contact with locals. The emblem of modern tourism is the gigantic cruise ship, where passengers can spend a few hours at each destination – visiting a scenic Caribbean island or an ancient Mediterranean port – but always return to the same bed. Royal Caribbean’s new Harmony of the Seas aims to replicate all of the world’s climates. So a ship that is more than a hundred feet longer than the Eiffel Tower is tall has a tropical park and an ice skating rink (in addition to 23 swimming pools and 42 bars).

Bus- or train-based tourism companies are similarly protective of their clients, releasing them on a famous site only briefly – essentially just long enough for a few photos. This style of travel strains local infrastructure to capacity. There is often no room to stroll along the canals of Venice or on the path up to the Acropolis.

This approach reinforces mutual misapprehension. Visitors stay within the confines of their pre-planned excursions, meeting only the swindlers offering overpriced trinkets or taxi rides. Locals are hardly appreciative of the massive groups of tourists swarming around their most prized sites. Nobody feels particularly engaged or trusting.

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It is easy to be nostalgic for the days when tourism meant long stays and deep encounters with vastly different cultures. Of course, it would be impossible for today’s numbers of visitors to stay for weeks or months in ancient monasteries. But it is possible to imagine settings in which visitors and their hosts interact in a more personal way. Airbnb, for example, can provide a much more engaging experience than a hotel or, worse, a cruise ship.

Is there a political equivalent to Airbnb? Could world leaders attending summits like the G7 live and work for an extended period in a foreign country? Soon after the US entered World War II, Winston Churchill famously decamped to the White House for 24 days, cementing Britain’s transatlantic alliance by deepening his relationship with Franklin Roosevelt. That level of familiarity may well be the greatest enemy of today’s anti-globalization populists.