The world is "flat" or "uneven"

Author: Li Huimin

More than 10 years ago, The World Is Flat: A Brief History of the Twenty-First Century was published and became a phenomenon bestseller. Author Thomas Friedman describes the major changes taking place in the contemporary world: rapid advances in technology and communications have brought people around the world closer to each other than ever before — creating explosive wealth growth in India and China; and in the United States, the flattening of the world is dramatically changing the way people live. Through his extraordinary ability to read complex foreign policy and economic issues, Thomas Friedman explains how the trend toward flattening in the world occurred at the dawn of the 21st century; what it meant for nations, corporations, societies, and individuals; and how and must governments and organizations accept this change.

Since its publication, "The World is Flat" has been considered a basic reading for globalization, but today, Stephen D.King, chief economist of HSBC and an expert adviser to the Finance Committee of the House of Commons, challenges the authority of the former with a book called "The World Is Not Flat". Former U.S. Treasury Secretary Lawrence Summers described The World Is Not Flat as "a very important book at a critical moment", and the book was also named the Financial Times's 2018 Best Book of the Year and selected as McKinsey's 2018 Business Book of the Year.

So, is the world flat or uneven? In fact, look at the current reality and there will be an answer.

From the perspective of an outsider, the British people are tossing and turning, but from the perspective of globalization, Brexit marks the end of this round of soaring globalization.

The round of globalization that began in the 1980s and 1990s, thanks to the development of information technology, multinational companies have become the biggest promoters of globalization, manufacturing outsourcing, the construction of global industrial chains and supply chains, the opening up of global finance and the acceleration of capital flows, creating a thriving global economy and the rise of emerging markets.

However, at the same time as the global economy has developed, globalization has also created obvious losers, especially in the blue-collar classes of developed markets in the West, where job transfers and wage stagnation brought about by technology, outsourcing and immigration are in stark contrast to the wealth appreciation achieved by the elite. The essence of Brexit is a protest against the uneven gains and responsibilities of this round of globalization.

Another best-selling book in the previous two years, Capital in the 21st Century, pointed out that the biggest problem facing globalization in the 21st century is that there is only the globalization of economy, market and finance, but there is no globalization of governance, the globalization of taxation, the globalization of transfer payments, and the compensation (training and relief) of global losers, resulting in such globalization cannot be sustained, because financial capital can find opportunities in the world, the bargaining power of the local market labor force is getting lower and lower, the distribution of opportunity and wealth is becoming more and more uneven, and the gap between rich and poor is widening. It will fragment the mechanisms of society, promote the rise of populism, and ultimately bury the process of globalization.

"The World Is Not Flat" goes further than Capital in the 21st Century, and it points out sharply that although there have always been many people who have cheered for globalization, technological progress does not determine globalization, so the world is certainly not flat, nor can it be flat. The author argues that globalization does not occur in a vacuum, that globalization is not a one-way street, and that the prospects for globalization will be uncertain if it cannot adapt to new global economic, financial, and political realities. The globalization of the economy, the market and capital alone is far from enough; the globalization system established after World War II can no longer cope with the new environment, and continuing to promote globalization requires new thinking on global governance.

The author synthesizes economics, political science, philosophy and current international hot issues, takes history and geography as the coordinates of time and space, and profoundly and vividly outlines a grand picture of the changes in globalization. Specifically, the discussion begins in four parts. The first part, "Postwar Successes and Failures in the 21st Century," explores why globalization, which promoted wealth growth in the years after the war, went from well-being to bane in the early 21st century. The second part, "Nation-State vs Globalization," examines the inevitable tension between globalization and nation-states: the economy can be global, but politics is its own, and national politics is bound to affect the global economy. The third part, "Challenges of the 21st Century," uses the prism of the past to gaze into the future, focusing on three key issues facing globalization in the 21st century: migration, technology, and currency. The fourth part deals with "technical solutions, obligations, and ethics," arguing that many of the "solutions" to globalization-related problems are mere manifestations of technological bureaucracy and attempting to propose new thinking about global governance needed to advance globalization in the future.

As the book argues, there have been various waves of globalization over the past few thousand years, which may have had different driving forces, but have all faced challenges and stagnated or even repeatedly, precisely because the global institutions and mechanisms it has shaped have not been able to keep up with the changing realities of international economic and political realities. Globalization after the Industrial Revolution in the 19th century, relying on the rule of law in Britain and the armed force of the Royal Navy, could not be maintained after facing competition from the great powers, and needed to be solved with the bloodiness of the two world wars. The international economic order after World War II relied on the U.S.-led international financial system and the force behind it to endorse it. The United States provides economic, financial, and military support for the new international order, and its economic, financial, and military power also provides itself with the opportunity to shape the world with its own mirror image. The U.S.-led international economic order is supported by a series of global mechanisms, including the World Bank, the International Monetary Fund, the Customs and Trade Agreements and later the World Trade Organization, as well as the Organization for Economic Cooperation and Development, all of which are based on the interests and aspirations of Western countries, the United States, and Europe and Japan, which recovered after the war. After the end of the Cold War, the influence of the United States reached its peak, but neither of them saw the change in the internal and external environment, that is, a more integrated and diversified global economic pattern, coexisting with a domestic economic pattern with a widening gap between the rich and the poor. The eurozone is a good example: the integration of the eurozone is precisely because of the lack of a unified banking system and the absence of a unified government that has led to a more serious North-South divide. Similarly, international trade and the free flow of capital have allowed the gap between the rich and the poor to intensify precisely because there is no adaptive international governance system.

In the past, we have benefited greatly from the wave of globalization, and if this trend continues, we will continue to benefit. But such a wave is far from inevitable, and in the past few years, globalization seems to have suddenly changed gears, not only stagnating, but even reversing and regressing. The most obvious examples are the UK referendum to leave the EU and the US government's re-introduction of "everything is AMERICA first". Globalization has come to the present, due to the intertwining of protectionism, nationalism, geopolitics and other factors, some countries have begun to raise the banner of "national priority", not to solve the problems of immigration, technology, fiscal deficits and other problems that have arisen in the process of globalization, but to blame these problems on globalization, and even adopt isolationist and protectionist policies, resulting in global economic development in a downturn, stagnation or even regression. In view of this, we must gain an in-depth understanding of the history of globalization and the phenomenon of anti-globalization that is now pushing this wave into crisis.

This has brought profound and complex changes to the external environment for China's development. In this context, how does my country respond? This book may spark some thought. To reflect on globalization is to find out the reasons for the anti-globalization trend, understand the different demands of a pluralistic world, and build a governance structure for a multipolar world. Only in this way can globalization continue to move forward. (Li Huimin)