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Stakeholder Capitalism Ch.5: Global aspirations

In a series of blogpost, I'm reflecting on the book Stakeholder Capitalism, written by Klaus Schwab with Peter Vanham.

Responding to and reviewing a book chapter by chapter had disadvantages. One runs the risk of summarizing the book instead of giving a global response. Also, some viewpoint in an early chapter might become more nuanced in a later chapter. And some chapters are more of a sketch or general introduction for those readers that are new to the subject at hand. This chapter on globalization is just that – mostly an overview of the history of globalization, plus some hints and warnings about how to handle globalization in the information age.

A nice and interesting overview is given. It starts with the silk road and spice roads between Rome and China; then comes the Age of Discovery (15th to 18th century); the First Wave of Globalization (steam powered) till 1914; and finally the period after WO2. The internet and new digital trade is creating even more globalization.

The WEF is sometimes associated with some nazi/commie/reptilian/pink-unicorn New World Order (NWO) totalitarian takeover together with Evil Big Business, so I took the opportunity to find evidence in this particular chapter. I found this:
The lesson is that globalization is, theoretically, a force for good, but in practice, it can be a positive force only if guardrails ensure that it benefits everyone and ensures resilience and sovereignty.

Multiple pages are actually spend on the possible disadvantages and dangers of globalization. A few of their examples are taken from formerly successful industrial cities where jobs were lost due to factory relocations to cheaper countries. It reminded me of the 2019 documentary American Factory where various topics related to this book are touched – globalization, job loss, and the replacement by robots.

YouTube Video:

To avoid such misery, the authors recommend a combination of three policies, about which you can read more in their book:

  1. The social compact must be in place. Taxes must be paid, especially by the people and (big) companies profiting from globalization, so public investments can be made and all stakeholders can profit.

  2. A country profits from globalization when it can balance opening up (trading and such) with protecting and caring for one's people. Dani Rodrik is referenced, warning against full-scale liberalization.

  3. The dominant global technology must meet the national (or even individual) unique characteristics, opportunities and needs.

The absence of just one of the factors above can get you a financial, health, or environmental crisis. And even if you've got everything covered, there is still the increased risk of fast propagation of new viruses (pandemics) and disruption of local nature (environment), e.g. cutting of forests. The authors again mention climate change; they didn't get the memo that climate change is happening for, like, as long as the earth exists, and don't explain how this is related to globalization.

But so much for the NWO complot theory. Of course such complot theories could still be true, but not based on this book, at least, not yet ;-) To be honest, it is a bit of a bummer, as I secretly (when not too much in my usual pattern of a patriotic conservative) like globalization. My country, The Netherlands (Holland), did profit greatly from it for centuries. We still do. Although I see the big political influence that “our” multinationals have, while not paying much tax.

Holland is mentioned by the authors as one of the first countries to sail the world and to create globally operating corporations. And yes, Indonesia was one of our colonies… That's why my grandparents and my mother were there, as I mentioned in a previous chapter review. Maybe that's why much of this chapter feels a bit redundant to me; much of it is covered in our educational system or otherwise part of our culture. The Netherlands is also mentioned a few times in the book as one of the select few countries that have more trade than their GDP. Nice to have a national history that helped create globalization. And yes, our Port of Rotterdam is mentioned, indeed one of the most advanced ports in the world. Love you guys! ♡

Globalization is a direct result of (1) global order, created by empires or cooperation, and (2) technology. The next chapter will be on technology, but already in this chapter each stage of globalization is associated with various stages of technology. It makes very much sense that new technological developments will enhance and stimulate further globalization, whether you like it or not, so I highly agree with the authors that we should prepare for this in order to avoid the dangers and reap the benefits.

The authors caution against too much enthusiasm and with good reason. We've seen catastrophes, many of them, all over history, related to fragile trading routes and instable international dynamics. If all your food, pharmaceuticals or tools come from the other side of the planet, then what happens if suddenly a virus or a war breaks international trade? Or international finance could disrupt countries such as Hungary, that was hit hard by globalization, and reacted by strengthening their borders.

Globalization is much driven by technology, the subject of the next chapter.

If you want to follow my adventure with this book, just follow this weblog or check my twitterfeed or Facebook timeline with the hashtag #wefbookclub or the mention @WEFBookClub for the next few weeks. You might also order the book, and maybe even join the WEF Book Club on Facebook, so you can make this a participatory experience for yourself.

Also check the index page of my review series that I will update as I add blogposts on this subject.
Excerpt: Globalization is an ongoing process, bound to technology, trade routes, and empires. It can bring great benefits, but also risks, which must be balanced.
Post date: 2021-03-13 01:04:46
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