About Me

Jun 1, 2011

The Clashes of Capitalisms and the Birth of a Globalization with Evil Face

  Nandan Nilekani, a former CEO of Infosys, made an international alarm when he said “The World Is Flat.” In fact, it is a metaphor he used to describe the force of globalization leveling the round world to a level playing field in which all people have more opportunities than ever to compete in global economy.
Thomas Friedman took that clause as the title for his ground-breaking book “The World Is Flat: A Brief History of the Twenty-First Century” which later earned him a Pulitzer Prize, a highly respected award for Journalists in USA.
 I agreed with him on most parts of the book. There are some sticking points that I can’t. It is true globalization makes people more connected than before; the world is being flatten but it not flat. Globalization intertwines economies amongst countries.
 Anyway, it hasn’t reduced the possibilities of war. We didn’t change the war by giving peace a chance and what we did change was nature of war. Some readers might question: What did you exactly mean by the change of nature of war? Since the end of the Cold War, the world, on the surface, has been overall peaceful.
It is very wise of superpower leaders that they have made the war very much invisible so that the pressure, both from domestic voters and outside world, is not that much. In the ancient war, Generals led the troops to conquer enemies to snatch natural resources, labor, and territory. In 21st Century, the Generals have reincarnated as who we now call CEO of Multinational Corporation.
The CEO of a corporation sets up strategies to invade, dominate and exploit over the advantages of the host countries. In the past, the invaded would use defensive forces to protect their countries. At present time, they use taxes and regulations to protect their market and producers. And that’s why I say we didn’t change the war but we changed the nature of one. >_<
Thomas Friedman divided globalizations into three versions. He called the period between 1492 to 1800, during which Columbus set sail for a discovery ended in opening the trade between new and old world, Globalization 1.0. The world shrank from a large size to medium size and the main driver of the move was Governments.
 He called the period between 1800 to 2000 Globalization 2.0 that shrank the world to a small one. Multinational corporations were its momentum.  And the period from 2000 until now he called globalization 3.0 in which new-found power for individual to collaborate and compete globally.[1] According to him, the world in globalization 3.0 is a small flat one.
My perspective is that Globalization 3.0 nearly comes to an end. A small and flat world makes the capitalisms meet and clash with one another. I divided capitalisms into three categories[2].  We have America-style capitalism, the value of which we are already familiar with.  We have capitalism with Chinese characteristics. Last but not least, we have capitalism with Arab countries features.[3]  
For Chinese capitalism, the leaders take temporally their people liberty and give them an increasingly higher standards of living and a good education. For Capitalism with Arab countries features, the leaders take their own people liberty and give their people the ignorance and absolute destitute.
I am here today to dismiss a fatal fallacy about globalization[4]. Some people think that the West is trying to shift their industry-based economy to service-based one. It doesn’t make any sense. For example, an air company must buy planes to serve its consumers. A car driver must buy a car before starting doing business. If they shift to service-based economy, the will run a large trade deficit with developing countries that are fast developed in term of industry sector. I’m sure that they won’t let it happen. By reading previous articles, you might get a sense that developed countries are trying to revitalize their disadvantaged industry sector via economic crisis.
I see the clash between American-style capitalism with that of China. The problem is about the competition. American cannot compete with China in term of manufactured goods. CEOs of will cut social benefits and wages and so on they used to offer to workers to make sure that they are more competitive. And countries with China-style capitalism will do whatever it takes to outsmart their competitors.
As a result, all workers of the world will suffer from that competition and the winners are CEOs of giant companies. Globalization connects people but it divides the society. The rich is getting richer and the poor is getting poorer. The clashes of capitalisms give birth of a globalization with evil face. I call it “Globalization 4.0.” Each country is seeking export space with decreasing consumers. And the world economy will eventually fail. My insight is that the world will meet another economic crisis somewhere between 2030 and 2040. Why? How? I will explain to you in next article. 
We are badly in need of Globalization 5.0. It should be a globalization with divine face which will benefit all members of global village. For sure, we need a revision of capitalism. Thanks for reading dear reader(s).

[1] He refers to the outburst of Information Technology. He mentioned about the using of email, using of social networking, Google translate and so on. It is not only connecting people but also giving more business rooms to people.
[2]I borrowed some ideas from Thomas Friedman.
[3] I refer to only some Arab countries seeing protests for changes.
[4] War for Wealth by Gabor Steingart.