Globalization 2.0

By Hunter Wallace

From the Prestowitz book:

“The reality that the advocates of Globalization 2.0 had continually failed to acknowledge was that most of the rest of the world, and particularly Asia, had not truly bought into the Washington Consensus. As we have seen, not only had Japan decided to pursue the opposite path, but so also had the Asian Tigers, the Chinese Dragon, and the Indian Elephant. All copied Japan in oje fashion or another, and propelled by export-led growth strategies, all were getting rich during the 1990s and early 2000s at an unprecedented rate.

The most important new development in this time was China’s takeoff followed by that of India. Like Japan, China maintained strong incentives for saving, a currency managed to be undervalued versus the dollar, strong export incentives, and state-aided development of strategic industries. But unlike Japan, China welcomed amd even subsidized foreign investment. Inducing global companies to build factories in and transfer technology to China, a tactic the Chinese learned from Singapore, became a major element of Beijing’s growth strategy. By making China an export platform for multinational companies that already had distribution capabilities and brand-name recognition in overseas markets, China hoped greatly to accelerate its development. In 1992, Motorola, which was suffering from the Japanese semiconductor onslaught and looking for a means to reduce costs but also attracted by the vision of a billion-plus Chinese consumers, was one of the first U.S. companies to respond to the Chinese strategy; it did so by establishing a plant in Tianjin. It was a huge instant success and was therefore soon imitated by many other global companies. Soon, Chinese exports were flooding the world and China was racking up 10 percent plus annual growth rates on its way to becoming the world’s fourth-largest economy by the late 199ps.

Although India did not adopt the targeted manufacturing strategy of East Asia, the nation’s large reservoir of highly skilled, low-paid professionals married to the instant communications capabilities of the internet made Bangalore, New Dehli, Bombay, and other Indian cities ideal locations for the outsourcing of call centers, back-office operations, and any kind of business that could be done digitally. Tb
Thus, India became an export platform of an entirely new kind with growth rates approximating that of China. Whereas China was rapidly developing as the new workshop of the world by becoming the location of choice for global manufacturing, India was becoming the service center of the world by becoming the location of choice for the offshoring of services.

This development was unexpected and challenging. For years as manufacturing had migrated from the United States to Asia and Mexico, most economists had hailed the new international division of labor in which the U.S. economy would be concentrated on services and high technology to complement the manufacturing of Asia. Americans had been reassured over and over that their economy was moving to “higher ground,” where there would be better jobs in sophisticated services, design, investment banking, high technology, and R&D. That comforting mantra now began to sound a bit hollow as GE, IBM, and a host of others outsourced more and more of this kind of higher-level work to Asia.

The result of these developments has been the current hybrid global economic structure in which the world is half free trade and half neomercantilist. This flat world is tilted so as to slide production and provision of tradeable goods and services and the jobs attached to them away from the economies of economic orthodoxy to those of neomercantilism.”

About Hunter Wallace 11762 Articles
Founder and Editor-in-Chief of Occidental Dissent

29 Comments

  1. Regarding nuclear weapons, the crudest of vulgar Marxist analysis: The Bourgeoisie are the ruling element in advanced countries. The Bourgeoisie are defined by their relationship to the means of production. Nuclear weapons destroy means of production in their blast areas. Ergo, nuclear weapons pull the rug out from under the Bourgs.

  2. Globalization and free trade have been sold to us because WW1&WW2 were in essence trade wars. Had the British allow Germany free access of the North Atlantic seas globalization would never have come into being.

  3. What I’m curious about is how does a White country like Germany, which is heavily dependent on exports (45.6% of their GDP is exportshttp://data.worldbank.org/indicator/NE.EXP.GNFS.ZS?order=wbapi_data_value_2014+wbapi_data_value+wbapi_data_value-last&sort=asc) become very wealthy? They are just as susceptible to cheap foreign labor as the US but they cannot afford to go protectionist because their economy is highly dependent on exports. How do they do it?

  4. Of all the countries in the world, Germany has one of the longest histories of private sector-government collaboration in national economic development which stretches back to the 19th century economist Friedrich List who was a critic of Adam Smith.

  5. “In the other thread, someone attributed this to fascism but in reality it goes back much further than that.”

    Same thing, different name.

    *** Denise – keep firing! ***

  6. Germany has high exports because their factories are owned by jews. The factories in China are also owned by jews. They don’t really compete with each other as long as there are enough goyim to cheat and fleece by having a monopoly. When they don’t there’s a War. All Wars for about three centuries have been Banker Wars fighting over market shares and drug and slave markets.

  7. How Germans do it is a very good question. They are smart and orderly but that doesn’t explain all of it. I’ve read that due to the European Union Germany’s currency is way undervalued like Trump talks about China’s currency being undervalued. Hence their prices for products lower. They have a banking system that supports local businesses. I believe that they get better interest rates to support industry. Another thing they have is State supported training. They have training for everything under the Sun paid for by the State and it’s high quality.

    Some of their cultural mores help. Engineers are respected. Skilled labor is respected and their skilled labor as I mentioned is highly trained.

  8. For what it’s worth, here our some economic comparisons from the OECD.

    Household Net Adjusted Disposable Income and Household Financial Wealth. All in USD.

    U.S. 41,355 and 145,769
    Germany 31,252 and 50,394
    France 28,799 and 48,741
    U.K. 27,029 and 60,788
    Italy 25,166 and 54,987

    The average U.S. house size is about double the European average and we have much larger lot dimensions.

    The Europeans did a great job of recovering from WW2 largely by being very practical with their education. A lot of testing to channel kids into fields where they could succeed and contribute to the economy.

    The U.S. economy would be a lot more competitive with more engineers and skilled tradesman and fewer lawyers and dreamers.

  9. Yes, that’s the common thread in all these export-oriented countries.

    1.) They keep their currencies undervalued in order to stimulate exports and give themselves a competitive advantage.

    2.) They find various ways to erect trade barriers that keep out foreign imports. Japan, for example, has all kinds of non-tariff barriers like cartels and regulations.

    In Germany, the state has always worked closely with private industry. That was true before, during, and after the Second World War.

  10. Of all the countries in the world, Germany has one of the longest histories of private sector-government collaboration in national economic development which stretches back to the 19th century economist Friedrich List who was a critic of Adam Smith.

    But it is not like the US doesn’t have a business/corporate cooperation. The US has the world’s largest military budget. And the Federal government funds numerous projects both military and non-military. And 95% of Americans probably don’t know who Adam Smith is. Based on the logic of your previous post, the US should be at least as competitive as Germany if not many more times as competitive. Why isn’t this the case?

    Also, the economies of White countries such as Australia (21%),France (29%), UK (29%), Italy (30%), Canada (32%), Spain (32%), Finland (37%), Sweden (45%), Austria (54%), Denmark (54%), Switzerland, (72%), Netherlands (83%), Belgium (84%), and the Czech Republic (84%) are highly dependent on trade. These figures are the percentages of each countries GDP that’s exported. For example, 72% of everything that’s made in Switzerland is exported to other countries. These countries cannot afford to adopt protectionism as it would devastate their economies. How do these White countries remain wealthy while being heavily dependent on exports? Shouldn’t they be destitute due to globalization and cheap labor from 3rd World countries?

    • 1.) Yes, it does.

      If you look at American agriculture, you will find that it is still heavily subsidized by the state and the private sector has worked closely with the government since the Great Depression. Hence, the gargantuan annual Farm Bill. Also, if you look at the aerospace industry, or some various other high technology industries you will find a similar pattern of heavy private sector-state cooperation, particularly where military contracts are involved.

      At the same time, this largely isn’t true of a number of other industries. Once upon a time, America had a dynamic steel industry, a consumer electronics industry, a textile industry and so forth, but free trade doctrine has been invoked to rationalize the destruction of many of these industries by foreign competition since WW2. There are some sectors of the economy like automobiles which are undergoing the transition between government support and pure free trade.

      Obviously, there are times when the US government has refused to follow the logic of free trade for geopolitical reasons. Nazi Germany, for example, was not allowed to develop a comparative advantage in nuclear power. The Soviet Union, which used to be the leader in aerospace and rocketry in the 1950s, was not allowed to develop its comparative advantage in reaching space. Even today, the US is determined not to allow Iran to develop nuclear weapons.

      2.) Since the Second World War, the United States has assumed the role of “leader of the free world.” As the “leader of the free world,” the US military protects Great Britain, the Netherlands, France, Sweden, Canada, Spain, Japan, Belgium, etc. Since the US is the leader of NATO (we have defense treaties with Japan and Australia too), those countries don’t invest in their militaries nearly to the extent Americans do. That’s part of the explanation.

      3.) America’s position in the world order is unique. As I said above, the US didn’t allow Germany and the USSR to develop a comparative advantage in aerospace and nuclear power for geopolitical reasons. The flip side of that is that in order to maintain the so-called “leadership role” the United States since WW2 has sacrificed its economic self interest for geopolitical advantage. In order to get this or that vote in the UN, America rewards its allies with sweet economic deals.

      4.) Most of the countries mentioned above are members of the EU which are the size of American states. There are few countries in the world which in sheer size are in the same league as the United States.

      5.) As far as the EU’s trade policy goes, I will get to that in a separate post. The US has a common market with Mexico and Central America.

  11. EU destination exports:

    Denmark: 69%
    Switzerland: 62%
    Czech Republic: 83%
    France: 60%
    Belgium: 80%
    Netherlands: 60%
    Italy: 59%
    Austria: 60%
    Sweden: 61%
    Finland: 55%
    Spain: 61%
    UK: 45%

    It is true that countries like the Czech Republic, Belgium, and the Netherlands are heavily dependent on trade, but their “trade” is overwhelmingly with other EU countries with which they share a common currency and central bank. Their “trade” is on the same level as “trade” between Oregon and Alabama.

    Throw in their non-EU trading partners which are other European countries (Norway, Switzerland, Russia, etc.) and their percentage exports heading to other European countries is even greater.

    In contrast, Mexico, Japan, and China are three of America’s leading trading partners.

  12. Just when I start to lose all faith in my fellow Anglo-Americans OD comes along with spot-on pieces like this, a nice injection of ideological solidarity. Thanks, really.

  13. Ack, sorry, my comment was meant for the “Good” Manufacturing Jobs Aren’t Coming Back” article & accompanying comments.

  14. It is true that countries like the Czech Republic, Belgium, and the Netherlands are heavily dependent on trade, but their “trade” is overwhelmingly with other EU countries with which they share a common currency and central bank. Their “trade” is on the same level as “trade” between Oregon and Alabama.

    Why use the word ,trade, in quotes? Trade is trade. For hundreds of years each those countries have had their own borders, language, culture, interest, and identity. Until recently, each has had their own currency. These countries for centuries have conducted separate foreign policies and they have even fought wars against each other. There is no reason to discount that these countries rely on foreign trade for their survival regardless of their size. The only way to discount “trade” (as you call it) is to erase the borders between nations. I insist that these borders exist.

    From a Southern Nationalist perspective, I thought that there is a national (small ‘n’) border between Alabama and Oregon even though there isn’t a National political border between the two states. Therefore, it is just a legitimate to evaluate the trade between Oregon and Alabama as it is to evaluate the trade between Oregon and Canada. The only way not to is to assume that there isn’t a national border between the two.

    By the way, isn’t it the objective of the globalist to erase national borders? Delegitimization of national trade between these countries delegitimizes national borders.

    And for common sense reasons, it makes sense to trade with countries that are in proximity with each other (e.g. transportation costs). Therefore, it’s no more of a surprise that European countries trade with each other than it is that the US imports most of its foreign oil from Canada and Venezuela and not Saudi Arabia.

    • “Why use the word ,trade, in quotes? Trade is trade. For hundreds of years each those countries have had their own borders, language, culture, interest, and identity. Until recently, each has had their own currency. These countries for centuries have conducted separate foreign policies and they have even fought wars against each other. There is no reason to discount that these countries rely on foreign trade for their survival regardless of their size. The only way to discount “trade” (as you call it) is to erase the borders between nations.”

      Because their “trade” is on the same level as Oregon and Alabama exchanging commodities and services or New Jersey and California or Texas and Wisconsin. Their trading partners have the same government, the same laws, the same judiciary, the same foreign policy, the same regulations, the same currency, the same central bank, the same monetary policy, and so on down the list.

      Is the difference not obvious? Mexico, for example, does not have our government, our currency, the Fed, our environmental laws, our taxes, our judiciary, our labor laws, etc. Thus, when we engage in trade with Mexico, we are dealing with a fundamentally different animal than competition between Alabama and Tennessee where most of the same rules apply.

      • From a Southern Nationalist perspective, I thought that there is a national (small ‘n’) border between Alabama and Oregon even though there isn’t a National political border between the two states. Therefore, it is just a legitimate to evaluate the trade between Oregon and Alabama as it is to evaluate the trade between Oregon and Canada. The only way not to is to assume that there isn’t a national border between the two.

        As much as we would like a national border to exist between the South and the rest of America, there isn’t one at the moment. The ROF Militia in Florida might print its own currency, but to say that Florida is not currently part of the United States and does not share a common currency with Michigan is a fantasy.

        By the way, isn’t it the objective of the globalist to erase national borders? Delegitimization of national trade between these countries delegitimizes national borders.

        The EU has succeeded in erasing most of the aspects of national sovereignty, not all, but most, particularly in the economy. The EU started out as an economic union.

        Getting back to the point, the Czech Republic is “trading” with the rest of Europe. Its trade with the Asia and the rest of the Third World is nothing on par with America’s relationship with China, Japan and Mexico.

        And for common sense reasons, it makes sense to trade with countries that are in proximity with each other (e.g. transportation costs). Therefore, it’s no more of a surprise that European countries trade with each other than it is that the US imports most of its foreign oil from Canada and Venezuela and not Saudi Arabia.

        A glance at their trading partners is sufficient to show that Belgium, the Netherlands, the Czech Republic and so on do not have the same relationship with China, Japan, and Mexico that we do. Their trade is overwhelmingly with other European countries and over half of it – with the exception of the UK, which trades more with the Anglosphere – is with other EU countries.

  15. but their “trade” is overwhelmingly with other EU countries with which they share a common currency and central bank.

    These countries had high levels of “trade” prior to the formation of the ECB and Euro. Look it up in the link I provided earlier.

    • “These countries had high levels of “trade” prior to the formation of the ECB and Euro. Look it up in the link I provided earlier.”

      Like I said above, trade within the EU is on the same level as trade between American states. Georgia and Alabama have to deal with the same federal government and all of its taxes, laws and regulations, its trade agreements with foreign countries, the same Federal Reserve that sets interest rates and controls monetary policy, and business transactions are made in the same currency.

      The fact that over 80 percent of the Czech Republic’s trade is with other EU countries – the percentage is greater still when the rest of Europe is included – shows that its foreign trade is nothing remotely similar to America’s relationship with Mexico and East Asia.

  16. Like I said above, trade within the EU is on the same level as trade between American states. Georgia and Alabama have to deal with the same federal government and all of its taxes, laws and regulations, its trade agreements with foreign countries, the same Federal Reserve that sets interest rates and controls monetary policy, and business transactions are made in the same currency.

    And like I said, the same levels of foreign trade existed prior to the formation of the ECB and EU. That they use the Euro currency today is a moot point. And the UK, Sweden, Czech Republic, and Denmark do not have the Euro currency. And Switzerland is out of the EU all together. Do trade between non-Euro and Euro countries count as foreign trade? And what if the over class unified the currencies of Canada, the US, and Mexico (call it the Amero). Would “trade” between the US and Mexico be on the same level as trade between Georgia and Alabama?

  17. Getting back to the point, the Czech Republic is “trading” with the rest of Europe. Its trade with the Asia and the rest of the Third World is nothing on par with America’s relationship with China, Japan and Mexico.

    I don’t know what the Czech Republic’s trade with China but European trade with China is on par (in the aggregate) with US trade with China

    https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china

    The U.S. goods and services trade deficit with China was $298 billion in 2012. China is currently our 2nd largest goods trading partner with $562 billion in total (two ways) goods trade during 2013. Goods exports totaled $122 billion; Goods imports totaled $440 billion.

    According to this graphic, Europe imported $386B in goods and services from China and exported $204B in goods and services to China.

    http://edition.cnn.com/2014/03/30/business/eu-china-trade-agreement/

    In terms of the trade deficit, Europe is doing better than the US but the imported only $56B less from China than the US. Considering that the US consumer typically has more disposable income and that the US receives a very favorable exchange rate due to China’s pegging their currency, the yuan, to the dollar, this difference in consumption of Chinese goods is very small.

  18. Trade is only necessary if your nation does not have enough resources to provide your needs. A country the size of The United States of America needs trade about as much as a third wheel on a bicycle. Trade has lowered the standard of living for all Americans except for a parasite class of aliens who are using the money to exterminate you. When Europe was bombed out after WWII The United States had enough resources and know how to completely fill the needs of Americans and most of the Civilized World. We don’t need trade at all. With fracking and the oil in Alaska, we could tell the Saudis and OPEC to kiss our ass and never have to deal with them again. With twice as many Nuclear Power Plants as we have today we could have all the electricity we need for Centuries. Energy dependence is a myth created by Oligarchs to force Americans to fight in wars for Israel and Internationalists that have a detrimental effect on America and unnecessarily kill White men.

  19. “Germany has high exports because their factories are owned by jews.”

    Germany has done better than others since the war because they had fewer Jews.

    USUK has done worst because that is where most of the Jews went.

    The countries which have seen the most off-shoring are the countries with the most Jews among their financial and corporate elite; the countries with the most predation from money lenders are the countries with the most Jews among their corporate and financial elite etc. They drag everything lower.

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