Globalization in a Nutshell, or: Why we should Eliminate Trade Barriers

Globalization — a word known to a small number of academics 20 years ago — has become one of the principal buzzwords of the 21st century. According to a popular college textbook, globalization "refers to the shift toward a more integrated and interdependent world" and is the "trend away from distinct national economic units and towards one huge global market"[1] in which commercial trade will multiply as national borders become increasingly irrelevant to peaceful economic exchange.

A new paradigm

Globalization represents a new chapter in economic history. The term aptly characterizes the new paradigm of a single global marketplace that has supplanted the post-World War II paradigm of a planet politically divided into three separate worlds: the first, comprised of the economically developed democracies; the second, the Communist bloc; and the third, the remainder, consisting primarily of wretchedly poor, undeveloped countries.
That Cold War paradigm became outmoded upon the collapse of the Communist bloc, the death throes of which lasted from the tearing down of the Berlin Wall in November 1989 until the official dissolution of the Soviet Union in December 1991. According to the best-selling book, "The Earth Is Flat: A Brief History of the Twenty-First Century," by journalist Thomas L. Friedman, this major tectonic realignment in the world's geopolitical order helped to give birth to globalization. No longer were hundreds of millions of people blocked by an Iron Curtain from contact with the rest of the world. This was the political precursor to globalization. The other primary precursor was technological. Advances in communication and transportation have been shrinking our world over the centuries, but the advent of the digital era, enabling information to be shared instantly almost anywhere in the world, represented a quantum leap forward.
This emerging global economy is still in its infancy. It is an ongoing process, not a fait accompli. Today, many are wondering if the trend toward globalization is irreversible. To answer this question, we need to understand the fundamentally different character and pattern of technological progress and political progress. Barring a cataclysm that wipes out human civilization, it appears virtually certain that technological progress will continue and even accelerate exponentially. In fact, it looks like this development will occur not so much on a linear path but on a parabolic one.[2]
Political progress, on the other hand, is cyclical and reversible. The history of trade has swung erratically between progressive periods of greater openness — greater freedom for individuals and businesses to interact economically across national borders — and reactionary periods during which such freedoms are curtailed by the political powers that be. It would be reckless to affirm that the pendulum will never swing the other way again. Whether globalization will thrive or fizzle will hinge primarily on political developments.