I think we should recognize that “globalization” is far too generic an idea to really assess in any way. We should be considering what services (including the services of creating and delivering products) we’re willing to pay extra for (and/or get lower quality or variety) in order to maintain a more visible, local, source. Or more likely—still globalized, but with larger reserves and redundant supply chains.
For many things, you simply can’t grow or mine the necessary stuff in your region, so full local supply is a non-starter. You do without or you import. For many others, there are economies of scale, and comparative advantage of labor and social structures that make it massively inefficient try to do it locally. For a lot of things, consumption patterns change quickly enough that it’s simply impossible to have tens of millions of micro-factories exactly distributed to match the needs.
Fortunately or un-, there’s no actual argument going on. This isn’t a decision that’s being made by a rational agent. It’s a distributed decision made by non-agent optimizers (like evolution, markets don’t act based on a model, they simply aggregate trillions of more trivial-seeming decisions). Globalization can be slowed by social and government barriers, but the overall optimization process is inevitable.
The process continues when everything is perfect, but shocks undo it. If super-efficiency and super-specialization were optimal, the biosphere would have reached that point long ago.
Instead, everything is robust at the expense of efficiency at multiple levels, from individual cells to networks of ecological interactions. Super-optimized things do evolve, and sometimes spread explosively, but they are almost always shortlived and die out.
Fair point—I misstated. The optimization process is inevitable, but no particular optimization level is. Every equilibrium is subject to changes in the forces that underlie it. The balance of efficiency and robustness changes, as well as finding new areas of solution-space that trade off (or don’t!) different dimensions of these aggregates.
I should acknowledge as well that there’s enough path-dependence in the process that there’s no guarantee after a shock that the new equilibrium will be better on any dimension, let alone overall.
I agree that “globalization” is a very broad term, hence my several aspects.
I believe you over state the case about markets and absence of planners/decision-making. Even historically trade with external entities generally included many prerequisites, some political in nature others more social and cultural. Yes, the underlying economic requirements were also generally present (relative scarcity, comparative advantage related aspect stuff).
The focus on the pure economic/trade/supply chain aspects I don’t think stand in isolation. The connections with both social and cultural aspects and the political aspect—including the more modern multi-national and global structures all interact with one another.
I think the world was already in the process of various forms of decoupling and reorganizing trade/economic and political relationships. The pandemic, I don’t think, is going to be a neutral event with regard to that path to the future. I just am not sure what new forks are getting opened up here or which are perhaps getting blocked off.
I think we should recognize that “globalization” is far too generic an idea to really assess in any way. We should be considering what services (including the services of creating and delivering products) we’re willing to pay extra for (and/or get lower quality or variety) in order to maintain a more visible, local, source. Or more likely—still globalized, but with larger reserves and redundant supply chains.
For many things, you simply can’t grow or mine the necessary stuff in your region, so full local supply is a non-starter. You do without or you import. For many others, there are economies of scale, and comparative advantage of labor and social structures that make it massively inefficient try to do it locally. For a lot of things, consumption patterns change quickly enough that it’s simply impossible to have tens of millions of micro-factories exactly distributed to match the needs.
Fortunately or un-, there’s no actual argument going on. This isn’t a decision that’s being made by a rational agent. It’s a distributed decision made by non-agent optimizers (like evolution, markets don’t act based on a model, they simply aggregate trillions of more trivial-seeming decisions). Globalization can be slowed by social and government barriers, but the overall optimization process is inevitable.
I disagree profoundly with the last sentence.
The process continues when everything is perfect, but shocks undo it. If super-efficiency and super-specialization were optimal, the biosphere would have reached that point long ago.
Instead, everything is robust at the expense of efficiency at multiple levels, from individual cells to networks of ecological interactions. Super-optimized things do evolve, and sometimes spread explosively, but they are almost always shortlived and die out.
Fair point—I misstated. The optimization process is inevitable, but no particular optimization level is.
Every equilibrium is subject to changes in the forces that underlie it. The balance of efficiency and robustness changes, as well as finding new areas of solution-space that trade off (or don’t!) different dimensions of these aggregates.
I should acknowledge as well that there’s enough path-dependence in the process that there’s no guarantee after a shock that the new equilibrium will be better on any dimension, let alone overall.
I agree that “globalization” is a very broad term, hence my several aspects.
I believe you over state the case about markets and absence of planners/decision-making. Even historically trade with external entities generally included many prerequisites, some political in nature others more social and cultural. Yes, the underlying economic requirements were also generally present (relative scarcity, comparative advantage related aspect stuff).
The focus on the pure economic/trade/supply chain aspects I don’t think stand in isolation. The connections with both social and cultural aspects and the political aspect—including the more modern multi-national and global structures all interact with one another.
I think the world was already in the process of various forms of decoupling and reorganizing trade/economic and political relationships. The pandemic, I don’t think, is going to be a neutral event with regard to that path to the future. I just am not sure what new forks are getting opened up here or which are perhaps getting blocked off.