The book, A Future Perfect by John Micklethwait and Adrian Wooldridge, accentuates the fast approaching phenomenon of globalization, which is the ideal term for describing the process of human modernization through interaction and development. It provides various examples of how globalization has contributed positively to our world. The examples provided in the book are well explained and backed-up by solid evidence, although the opinions of the authors are rather biased. The three focus points of the book are globalization of business, politics and culture. These authors identify, examine, and analyze the many forces that have been changing the world in which we live through globalization.
Globalization is not a new concept to the world's economists, as it has been around for a couple centuries. This way of thinking began with Adam Smith's writings on the "invisible hand" in 1776 but it was not until the early 1900s that this concept became a reality. Some believe that in the past the world was more global than today, but there is now a lot more trade, multinational companies, and capital markets.
Despite this, the early twentieth century saw free movements of people, capital, and minimal intervention by governments (Micklethwait and Woodbridge 5). There was a period of protectionism with the beginning of the First World War in 1914 that included the Second World War, the emergence of communism, the cold war, numerous trade wars, the nationalization of industries, the great depression, and other recessions (p. 8). It was not until Margaret Thatcher and Ronald Reagan came into power in Great Britain and the United States respectively that the global economies once again became liberalized and open to global trade.
These opened markets have resulted in three so-called engines of globalization: "technology, the capital markets, and management" (p. 29). The three concepts are all intertwined, as explained by Micklethwait and Wooldridge, and as a result capitalism and free trade have emerged. With the free flow of capital it is easier for individuals and companies to purchase new technology, while new innovations allow for the quicker exchange of capital and money. Improved and shared management methods also aid in the use of capital and technology in business operations (p. 29).
Globalization has become one of those words that are used in many different contexts and as a result there are great misunderstandings associated with it. In terms of business there are five misconceptions or myths that should be looked at: globalization is resulting in the success of only large companies, the emergence of completely global products, that economics and the business cycle needs to be updated, and geographic location is no longer a factor (p. 100).
Globalization is said to be destroying the nation-state as well as the role of government. This is rooted in the incorrect idea that governments are too small to deal with the large global economy and too big to affect individuals. Governments' power is not the same as it used to be but this is only natural because of the opening of markets and privatization of industries (p. 147). Despite the emergence of world governmental organizations, such as the United Nations, there has not been much shift in power as they have had limited success in regulating the nations. The major barrier facing nations seems to be from below, and the shift of power to smaller states within (p. 155). The strength of nation states seems to be holding up so far but in the future the barriers between countries will become less apparent.
There are many countries and people that are afraid of a global culture as they see it as an American invasion. One of the main arguments used is the spread of Hollywood films worldwide, and their apparent popularity. What is not seen is Europe's history of equal market share in other industries such as music and television. The success of foreign cultures stem from the openness of people's minds to a new and different idea way of thinking.
The main beneficiaries of globalization are what the authors refer to as cosmocrats. "These people constitute perhaps the most meritocratic ruling class the world has seen, yet they are disconnected from local communities as the companies they work for." (p. xxii). An example of this group is the young internet savvy people who work for the start-ups in Silicon-Valley. These people are anxious about becoming obsolete in ever changing markets and as a result have few local roots or responsibilities to their surrounding society.
This globalization also produces losers which can be categorized into three groups: the has-beens; the storm damage; and the non-starters (p. 247). Respectively, these losers are those whose jobs are no longer needed; those who cannot succeed because of financial and other disasters beyond their control; and those that never had a fair chance to succeed because of lack of education and other factors.
Globalization has many opponents who focus on the negative results of globalization. They see it through loss of jobs, deterioration of public services, the greater gap between rich and poor, and unfair competition. While these points do not always relate directly to globalization but rather corruption and bad management they fail to realize that, according to Micklethwait and Wooldridge, the good far outweigh the bad.
According to the authors of A Future Perfect the business idea that globalization is a win-loose situation is incorrect because it is false to say that in order for someone to gain from globalization another must have suffered to an equal degree. Anti-globalists argue that globalization has caused the loss of jobs in industrialized countries because companies can make products in other places where labour is cheap.
This is not true because there are few workers in the United States that "…are in direct competition with workers from poorer countries" (p. 110). The reason for this is because the majority of jobs related to this are from industries such as health care and construction which are not multi-national. Also, most manufacturing jobs are in industries where the job competition is with other developed countries, while low-skilled workers have been doing worse in jobs that do not relate to foreign competition. There are two suggested causes of these job losses: immigration and technological change.
There has been much discussion as to what the result globalization has had on developing countries in relation to the developed. Even though these poorer countries do offer lower wages, the richer countries generally consist of a more educated, skilled, and all-around productive workforce. Both these types of countries tend to complain about their economic position, but research has shown that free trade has helped developing countries reduce the gap between them and developed countries.
In 1960, the average wage in developing countries was just 10 % of the average manufacturing wage in the United States, but over the years it had risen to 30% in 1992 (p. 111). The aim of trade is to help countries specialize in what they are best at, such as in the case of developing countries where labour-intensive industries are best suited. When countries are able to do this everyone benefits, as consumers are offered better products for lower prices and producers are able to produce what they do best.