The Decline of Globalization

It is said that globalization started with Europeans seeking wealth on other continents, in the 15th century, in the mercantilism period.

At the time, the fruit of wealth extracted from the discovered countries was taken to European countries, and then, they started to take African peoples as slaves to serve in their colonies.

Honestly, it seems quite wrong for me to call this period the beginning of globalization and I allow myself not to go into details.

The world began to see the need and opportunity of globalization, with the new technologies that emerged for the free market, after the second world war and the force that took the neoliberalism.

The geographical borders were being broken down, the yearning for freedom, the population felt more strongly with the confrontation of the free world with the communist regimes in China and the USSR, the ambition for better living conditions, education for all, the end of discrimination by sex, religion and opinion took on global airs.

The end of dictatorships in countries like Portugal and Spain, as well as the subsequent fall of the Berlin wall and the USSR, brought the right moment for an international cooperation regime to be a global desire.

Economic liberalism preached and demonstrated that strong states did not bring wealth but only suckled the bureaucrats who used the state for their own welfare.

The idea of ​​globalization arises gradually and with increasing strength, seeking among other points:

• Greater balance of earnings between countries in the same region, favoring the least well-off and lowering the cost of production in the richest countries (typical example of the hiring of labor in Portugal by German companies.)

• Creation of a world market that increased the purchasing power of the wealthiest nations, and generated more jobs in poorer countries;

• Consequent increase and improvement of products for consumption;

• In richer countries, use of machines to replace expensive labor and be able to compete with products that come from countries with cheap labor.

As a consequence, let’s see the main points:

• Greater political and also economic integration between nations;

• A greater exchange of experiences in the social field;

• Gradual departure of the State from the economic area in several countries;

• Explosion of new technologies, particularly in the areas of data transmission, production methods;

• Financial integration worldwide;

A simple observation of the facts shows that the financial area was the one that most benefited from this new opportunity, becoming an activity without borders and with profits never before, even, imagined.

In organizational terms, supra-national entities appear to improve trade and transactions in general in regions, including NAFTA, Andean Pact, European Union, APEC Mercosur, BRICS.

These blocs, however, began to have as their main purpose the defense of the countries that formed the bloc and to have a greater negotiation capacity against those outside the bloc.

It became clear that the power of the strongest economies was at the expense of the weakest economies within the same bloc.

For example, it was in the interest of Germany, which lacked cheap labor, the arrival, almost without limits, of immigrants to supply their production with hands and, at the same time, undermine the economies of other EU countries with the assistance these immigrants.

In the agreement, finally signed, with Mercosur, it was in Germany’s interest to open the market for the export of its machinery and equipment and to participate in public tenders in the Mercosur countries and in Brazil in particular. However, it was uninteresting for France, as its agriculture is not competitive with the Mercosur countries and, the entry of products from these countries would explode its treasure with the need to subsidize, even more, its mini rural producers.

In the same way, NAFTA created to strengthen Mexico’s economy, avoid massive immigration to the USA, lower the cost of purchasing products from that country, had changed the economic scenario in the USA, which gradually had its industries transferred to this country. country (in addition to others that we will see later) by unemploying its labor force and causing obsolescence in its industrial park.

The Apec, skillfully made by China, gave ample possibility of expansion for export of its products but, it placed the USA only and mainly, as buyer of the products of this region.

In this way, globalization, supported and even fostered by the richest countries to expand their trade borders, ended up generating problems in their territory, as it was better used and manipulated by poorer countries or more skilled in international negotiations.

What comes next?

• China: Imperial power

• New economic axis

– Subject for the next articles.

Coming up next.

Carlo Barbieri