Thomas P.M. Barnett :: Weblog

Right up until we get

1> a pandemic that spreads on the air transport network

2> further massive price volatility in basic supplies, causing places which have become dependent on trade to dry up and blow away

We have no reason to think the system we are in is stable - indeed, chaotic systems frequently feature quite violent crashes which have no cause other than the basic nature of nonlinear dynamics - and globalization is one such system. Add systemic incentives to underprice risk, and you have a world which has eaten it's reserves and become dependent on just-in-time, where underpriced risk is reported as profit, and where one serious system perturbation could starve hundreds of millions of people.

Like a motorcycle, while everything is fine, it works great. But one day you fall off, and wish you'd bought a car.

We cannot and should not block globalization, but we should monitor its consequences. Read Barbara Tuchman's The Proud Tower to appreciate the consequences of failing to monitor a major transformation.

As an aside: Respectfully, I was wondering:

Instead of saying "The New World Order" could we consider a term such as "The New World Market?"

And, when others use the term "The Unipolar Moment," could we, instead, use a term such as "The Market Opportunity Moment?"

Such terms ("New World Market" and "Market Opportunity Moment"), emphasize -- not the United States in the driver's seat -- but, more correctly, globalization.

These new terms also seem to work well with other items Tom uses to help us understand today's steering forces in international affairs, to wit: "Three billion new capitalists" and "two billion new middle class consumers" -- (also terms that empahsize the dominant market aspect of today's world).

Just a thought.

Secure the supply chains!
Its the Great Global Buildout!

There is never any shortage of predicted TEOTWAWKI triggers.

You just can't base your vision on waiting for them, though.

An interesting part of our present economic downturn has not been directly commented on by the people I read. That's the effect our past outsourcing has had on it.

As a result of the work down now overseas, when a company here cuts back it tends to cut back on it's overseas operation first. Why?

"Hey, they're Hondurans, they are over there, I don't have to face them when I lay them off, it's easier." [Did you know that almost all of our underwear is made in Honduras?]

So personal plus economic reasons come into play, and it makes any downturn less here, just as the upturn didn't show up here as much in local labor and capital.

Globalization is smoothing out the economic cycle for us.

We have plenty reason to believe we live in a stable system. Evolution is linear, with nonlinear dynamical events. Vegetables show up before animals, never the other way around. Sure, dinosaurs are extinct. But the world did not end, here we are.

Globalization is a linear system: Security > Rules > Money > Infrastructure > Resources ... Market stability. Do perturbative, nonlinear events happen? Sure, 9/11. And drawing from the diversity of human design, the will and capacity to connect, we heal, we recreate.

Impressions of the world, the way we each experience events, are not intractable. Thus, while expanding global consciousness with a watchful eye for perturbative events, normalizing the globalization nexus allows for monitor, detection, and intervention strategies.

Don't worry, be happy :-)

Tom
I suspect your remark's emphasis is on "as we know it." If that is the case, then triggers may have had purpose, although same may misfire. Sometimes the anxiety factor is all that is needed to trigger transformation. Or is change the new buzz word?

Events appear about to prove the financial system is fully globalized. China and Japan were and are big investors in Fannie May and Freddie Mac. Lets see if the world's economy is as integrated as the world's financial system. Hope not but this will be a good way to calibrate two important pillars of globalization--finances and economics and they definitely are related but not the same thing at all. How do those managing the $2Trillion in unreported and unregulated hedge funds view globaliztion? We may be about to find out.

Who said anything about TEOWAKI? A few factors combined to put 30+ million people in extreme poverty, and to seriously threaten the food security of hundreds of millions more, and that's a small system perturbation.

Are you suggesting that large perturbations are so improbable that we can ignore them? If so, can you explain the rational basis for that approach?

Systemic underpricing of risk is a huge factor in destabilizing the global economic order - it's the root cause of the current US debt crisis, for example, and has huge implications in terms of long-haul energy policy.

Great article Tom, thanks.

Vinay Gupta makes me wonder what his or her recommended answers, approaches and resolutions are. Perhaps utopic socialism?

Thanks again Tom.

Vote With Troops

http://guptaoption.com/2.long_peace.php is a pretty good summary of how I think we should be approaching things - I'm not going to try and summarize the case, but it's a long way from either utopian or socialism.