F| NEW GLOBAL ENVIRONMENT: Endemic threats to the U.S.

An X-ray of the Evolution
of Globalization

Globalization is in the DNA of societies. It is simply an integral part of the evolution of societies. It is realized through trading products, communicating ideas, relocation and movement of people, and, in summary, through any exchange among people and organizations. Historically, it is traced back to the incipient exchange of people. It entails “learning” which is embedded in the “exchange.” In our times, globalization has taken hold and seemingly dominates our politico-socio-economic environment because of advancement of, and increase in, communications and transportation. Specifically, globalization is dominating our environment through the following drivers:

Trade

International trade has expedited the exchange among countries and people. The new regimes of trade such as Multilateralization and Regionalization have both contributed to an unfettered increase of the world economy through optimum asset allocation, competition and increased utilization of differential advantages.

Technology

The exchange among people and organizations has been expedited by technology which is increasing beyond the control of any government. Technology has proliferated communications which have favorably impacted trade, economic exchange, and migration.

Economic Imperialism

The American economy, among the largest world economies, is a mixed economy with a market overtone. The American economy’s market overtone focused on mitigating international and investment barriers using unilateral or multilateral trade agreements. In the global environment, U.S. economic actors employ a neoliberal approach in their trade or economic exchange. Those actors pursue advantage maximization as their preeminent goal which results in increasing employment and greater standard of living at home. They dominate foreign markets by exploiting local economic assets using the strategy of “location economies”, that is, materials and labor, as well as, by effectively employing the strategies of “Standardization” and “Customization.”

The Current Events

Countries in the global economy are not just engaging in economic competition. They are showing vivid signs of geopolitical antagonism as they are attempting to achieve a premium position in a polyarchic global environment. The incidence of “nationalism” as opposed to “globalism” has given rise to much conflict in societies. For instance, the concepts of “diversity” and “inclusion” dominate in the American society and in particular in American Academia. Diversity is one of the clearest evidences of current globalization trends. Although “diversity” produces a definitive advantage in organizational exchange resulting in optimum economic benefits, its Achilles heel is that it promotes cross-cultural permeation leading to dilution of national cultural values.

Geopolitical Antagonism –
A “World” in Disarray

Geopolitical antagonism is an integral part of global economic antagonism. Nations whose economies have dominated the global environment are seeking to influence individual countries using economic strength and military prowess. For instance, China has openly positioned itself to take on the U.S. in its conflict with it over Taiwan. In reviewing China’s development, we can attest to the rhythm of the pace of global governance. In 2001, when China entered the WTO its GDP was $1.3 trillion. In 2020, China’s GDP reached $14.7 trillion, and, in 2021, China’s GDP grew to $17.5 trillion. This growth has been fueled by the U.S. through the insatiable consumptive behavior of the American people. Projections indicate that China’s GDP will surpass that of the U.S. by 2030. On the global economic front, efforts are currently being undertaken by China and the rest of the BRICS countries (Brazil, Russia, India, China, and South Africa), to replace the U.S. Dollar as the international reserve currency, rendering the 1944 relevant Bretton Woods agreement void. Furthermore, the collective economy of the world is running a debt that would be prohibitive and unacceptable at the national level, that is, for any one individual nation. The ratio of world debt to world GDP is over 350%. The debt-to-GDP ratio of the U.S. in 2022 was 134%. The Eurogroup, in 2010, declared Greece bankrupt because its debt-to-GDP ratio was in excess of 140%. Well, might the U.S. be declared bankrupt, the way Greece was, should its debt-to-GDP ratio reach 140% or beyond?

Cross-Cultural Permeation

Global forces, such as those discussed earlier, have inevitably brought about dilution of national cultures. Social anthropology defines two types of culture; institutional (Regulative) and cognitive-cultural. Any functioning organization has both of these embedded in it. The unavoidable interfacing of these two antithetical cultures produces a third culture known as trans-culturalism. This third culture is responsible for the ensuing dilution of cultural values. We may rationally infer that dilution of cultural values is endemic to globalization and a definitive characteristic of cross-cultural exchange. Furthermore, although “values” are the most stable component among those of “beliefs”, “norms”, “customs”, “traditions”, “cognitive elements” and “socio-economic systems” they cannot avoid or evade change or transformation. It follows that the greater the agility of globalization the speedier the dilution of “values.” This trend is further accentuated by the cultural evolution of newer generations, as they tend to repudiate the older generations’ values.

The Future - Expectations

Once we have a true and reliable diagnosis of the historic evolution and the current status of the world, we can start developing insights into taking corrective action to mitigate potential threats. The above discussion points to the following critical solutions:

Leadership

World leadership is plagued with lack of leaders and a confused orientation to leadership emanating from an amoral position. The character of leadership is defined by, and depicted in, the relationship between the given political leader and the voters or electors. So, there is a two-way flow of interaction between voters/electors and elected leaders. In such relationship the elected leaders are confronted with three choices. Those are: “serving the public”, “serving own self-interest” or “focusing on both.”  Given the complexity of global governance and the above choices the difficulty of leadership has grown exponentially. Current world leaders have been less than able to live up to the challenges of world affairs. For instance, the Biden Administration has shown inability to manage global affairs like that of Afghanistan, Iran, Ukraine, Russia, China and the like. Biden’s doubtful or even myopic handling of such global challenges is likely to further adversely affect America’s leadership position in world affairs. Saudi Arabia and China are in talks about using the Chinese currency Yuan (CNY) or Renminbi (RMB) in oil transactions instead of the U.S. dollar. The inability of the U.S. to defend its currency as the world’s international reserve currency will have catastrophic consequences for the U.S. economy and will pose an unprecedented reshuffling of the world economic order and the currently contemplated digital currencies. The recent Ukraine crisis and the ensued war has effectively opened the path to closer Russia-China collaboration.

A New Political Framework

An ambiguous world leadership amidst our current global governance coupled with the ill-effects of a galloping globalization is likely to bring about a new political framework that might be known as the "New Political Order." Such forthcoming possibility might make sense in a world that has lost its moral compass and in a world that may encounter a plethora of conflicts. This “New” political framework, agreed to by a vastly growing polyarchic environment, might be a type of “global government.” A global government will offer homogeneity in governance but it is likely to restrict individual political freedom. The above design will be accommodated by a fiercely advancing technology and an economic system that would adopt a common digital currency, with the rationale that such currency would eliminate corruption, tax evasion, money laundering, etc., but it would allow for differentiated market behavior such as “choices” and “preferences.” This hypothesized “New” political framework is not likely to put to rest nationalism, at least in the short term. In the longer term, however, globalism is likely to intensify and eventually diminish or even minimize nationalism, which is protectionism of national sentiment.

Culture - The Last Frontier

The ultimate challenge and formidable adverse power against globalism is “Culture.” Cultural values are ingrained into the psycho-social DNA of people. Although values change incrementally and slowly the rate of change of other cultural components such as norms, habits, arts, symbols, etc. do not resist change as effectively as values do. Nevertheless, such cultural components may help expedite the transformation of values. In addition, within values, those that relate to “faith” are likely to be the last to suffer dilution. Again, the rate of change is likely to be faster the less new generations embrace Faith. To illustrate the ultimate gravity and consequence of Culture we can look into institutional behavior. For instance, international business organizations, when entering a foreign market, customize their product offering in order to appeal to the local market behavior and benefit from greater market penetration. In other cases, they have standardized their products exploiting cost efficiencies and the use of new technology which has proletarianized communication bringing cultures closer to each other. In a dualistic environment, in which nationalism was not in peril, cultural values were not threatened the way they are threatened in a global polyarchic environment which by definition promotes cross-cultural integration facilitating the permeation of values that had been otherwise in the past protected. The global environment slowly and subtly bridges cultural differences resulting in relative cultural homogenization. Business organizations that operate in a global environment have good knowledge about both the national as well as the cross-national environment. Although achieving cultural homogenization remains asymptotic it increasingly dwindles and erodes the heterogeneity of consumers’ “tastes” and “preferences.” The said activity culminates into intercultural permeation and gradual dilution of traditional or well-established values.

Note:  This article has been conceived with the goal to identify hidden challenges to the U.S., amidst a polyarchic environment following the collapse of Sovietism in 1989.  
It has NO POLITICAL COLOR! 

Author: CGP .+.