Economic Globalization Inevitably Leads to Political Globalism

I’ve had my fair share of debates with so-called conservatives who, on the one hand, vociferously (and rightly) denounce political globalization, while at the same time they sing songs of unadulterated praise regarding (equally imperious) economic globalization.

They say that international organizations like the United Nations (UN) or European Union (EU)—and in some more extreme cases America’s federal government—erode the sovereignty of their composite states, and that this is inherently bad.

With this I agree, wholeheartedly.

The more nuanced of the bunch often go further, arguing that political globalization (that is, integration) poses an existential risk to humanity: it puts too many eggs in one basket. They point out that a powerful, large, single government is intrinsically more fragile than a collection of smaller entities—it’s slow and Byzantine in nature, while the contrary (Westphalian nationalism) is nimble and responsive, adaptive.

Again, I agree.

Yet these very same people almost inevitably support dismantling international trade barriers, and signing free trade deals. Unlike political globalization, which is bad, economic globalization is an unadulterated good, they argue, because it makes the economy more efficient, and gives us access to a broader range of (presumably cheaper) products.

This is a paradox—if you don’t see it, you need to keep reading.

Why? Because economic and political globalization are two sides of the same coin—one invariably leads to the other.

Why Political Globalization is Bad

To understand why people who abhor political globalization are hypocrites if they support (unrestricted) economic globalization, we first have to understand why they believe political globalization is bad.

There are many reasons, some compelling, some not, but only a few that matter:

1. Political Globalization Concentrates Power With Unaccountable (& Corrupt) Bureaucrats

Many people oppose political globalization because they fear that political power will become concentrated at the top—particularly in the hands of the shadowy figures that tend to populate the upper echelons of organizations like the UN or EU, or even the International Olympic Committee or FIFA.

Basically: absolute power corrupts absolutely. The assumption is that bigger governments are more corrupt.

And they’re right to fear: people like the former (and disgraced) FIFA President Sepp Blatter seem to be the norm in these circles, not the exception. They are universally hated and corrupt, often more-so than many Third-World dictators—I’m sure Robert Mugabe has more legitimate fans than does Sepp.

That’s a bit of a tongue-in-cheek example, but here’s a serious one: the EU recently admitted that it’s been lying to the European people since the start of the Syrian Refugee Crisis. Why? Who knows, but presumably because they wanted to push their own opaque agenda.

That’s corruption at the highest levels, and there’s no recourse.

This brings us to the lack of accountability: how do you hold an international bureaucrat accountable for their actions? They’re stateless actors. No one country can fire or impeach them. They aren’t worried about losing an election (because they are appointees). There really is no recourse for the average citizen.

This is epitomized by how the EU has handled the collapse of the Euro-zone (remember Greece?). Nigel Farage’s speech in the European Parliament sums it all up quite nicely:

2. Political Globalism Undermines National Sovereignty

The first point leads directly into the second: if power is concentrated in international governing bodies, then it’s necessarily no longer concentrated at the national level.

Basically, for an international governing system to work, nations must surrender their power to said system. There’s simply no way around it.

This is a bad thing if you happened to value your nation’s sovereignty.

To illustrate this point, we turn again to the relationship between the UK and the EU.

According to Nigel Farage and UKIP, some 75% of Great Britain’s laws and regulations are either outright dictates from the EU, or must conform to standardized EU regulations or codes. According to Parliamentary evidence submitted by Member of Parliament Boris Johnson, the number is at little lower, but still high, at 60%.

But let’s not quibble over the numbers. Why? Because it doesn’t really matter if it’s 75%, 60%, or 10%. It should be zero. For a nation to be sovereign, it must control its laws. The fact that so great a proportion of Britain’s law is imported from the EU is troubling.

And remember, there can be serious penalties (financial and political) for not complying with EU law (no matter how absurd, or contrary to your national interests said law may be). Just look at how the EU is facing off with Poland over their refusal to flood their country with migrants.

No matter how you feel about the Migrant Crisis, we should all be able to agree that sovereign entities should have ultimate control over their own borders—the question must be decided by Poland, not Eurocrats in Brussels or Berlin.

My point: nations in the EU are no longer independent, sovereign states.

3. Globalism Creates Fragility & Political Contagion

The third point that is (less often) used to criticize naive internationalism is one that stems from fragility, and the logic of non-linear risks.

I’ve written quite a bit on this topic, and it’s worth reading my articles on complex systems and systemic contagion (albeit in different contexts, but they make my point). In short:

Politics functions like an organic, not an artificial system—it has more in common with wildebeests than washing machines. Why? A washing machine is a simple mechanical system governed by first-order causality—we know how all the parts work together, and can say with certainty what causes what. If you remove a part, you know exactly the harm it will cause etc.

However, complex systems are governed by second-order causality (the first cause interacts with the system through a rippling web of secondary causes that are unknown). For example, just before World War I most experts thought if war did break out it would be over a scuffle in Africa, or along the Franco-German border—yet the assassination of Archduke Franz Ferdinand spiraled out of control through a series of unfortunate (and improbable) events.

What does this have to do with political globalism? Two things.

First, adding layers of government and bureaucracy increases the system’s complexity, which makes it easier to conceal risks—and of course, more interaction means more friction, and therefore more conflict.

I ask you: which will have more crime (all else being equal), a city of 10 million people or ten cities of 1 million people? The answer is very clearly the city of 10 million people. There is a non-linear relationship between the size of a city and its crime rate. So too is there a non-linear relationship between integration and conflict.

Second, highly integrated and interconnected systems spread the good with the bad. Just consider how in the Franco-Prussian War France’s elaborate railroad system served both French and German supply trains equally well; whereas during the Second World War the USSR’s relatively poor infrastructure couldn’t be hijacked to serve Nazi supply chains, making the USSR robust.

My point here isn’t to say that integration is bad, it’s to say that integration is a double-edged sword, and we should be careful about when we “take advantage” of it. Sometimes redundancy is better than efficiency.

How Economic Globalization Leads to Political Globalism

You may buy the above arguments, you may not; either way, we can agree that if you buy them, then it follows that you should be against economic globalization as well. Why? Because economic globalization causes the same problems, and inevitably leads to political globalism.

Here’s how:

1. Economic Globalization Empowers Unaccountable Bureaucrats

Who negotiated NAFTA? Who negotiated KORUS? Who negotiated TPP?

You can’t say. That’s a problem.

The fact is that our “free trade agreements” are negotiated behind closed doors, and elected representatives have very little to do with them (aside from giving them the green light and the rubber stamp). Why? Because they’re so complex that our elected representatives simply don’t have the time or the expertise to negotiate them (or even read them, in most cases).

They’re created by bureaucrats and specialized (often third-party) lawyers.

We always knew this, but the knowledge became a little more widespread when Wikileaks posted documents from the (potentially) impending Trade in Services Agreement (TiSA).

This point is especially clear when it comes to the EU common market: economic regulations and standards are made by appointed bureaucrats, by people no one’s ever heard of, by people who aren’t accountable to anyone.

It’s a technocracy.

2. Economic Integration Usurps Sovereignty

For this, let’s take a good look at TiSA, a proposed trade agreement between much of the developed world, and a number of outliers like Pakistan and Turkey.

TiSA would do a lot to undermine national sovereignty. For example, TiSA would give multinationals the right to sell financial derivatives, including those not yet invented, in all participating countries—nations wouldn’t be able to restrict the type of financial products sold.

TiSA would likewise ban national restrictions on the transfer of electronic information by financial service suppliers (which includes companies like Facebook or Google), thereby voiding national provincial laws.

And of course, the experience of NAFTA and the EU likewise supports this claim.

Evidence aside, here’s how the logic works: in order to integrate markets, we need to harmonize our standards and regulations. This may force some countries to increase their standards, while other countries are forced to decrease theirs (to reciprocally open their market to inferior foreign goods). Either way, the nation is no longer its own master.

The more integration, the more harmonization, and the less control your country has over its economy.

3. Economic Globalism Increases the Risk of Contagion

This point is, perhaps, the most obvious of them all.

Pretend you have ten individual countries with completely isolated markets. There is a financial meltdown in the banking sector of one country—its economy completely implodes. What happens to the other nine? Nothing. They’re completely independent, and therefore aren’t affected by what goes on in the rest of the world.

Isolation and autarky are robust systems: you can only break one egg at a time.

Now let’s assume that all ten countries are extremely integrated: they share most of the same regulations, their markets are interdependent, and they even share a single currency. What happens if one country implodes? The whole system becomes infected with the contagion—no one is safe.

All the eggs break.

Remember, the economy is a complex system: we don’t know how things fit together (and we can’t know, there are inherent epistemic limits).

This is how problems in tiny Greece (10 million people) brought the Euro-zone (332 million people) to its knees—it’s called the Butterfly Effect, and it operates in all complex systems.

There’s a balance that must be struck: sometimes more integration (and more free trade) is bad. It turns benign cancers malignant.

Economic And Political Globalism Are Inseparable

Those who support economic, but not political globalization are not only hypocrites, but they’re naive. Why? One inevitably leads to another. Economic globalization leads to political globalization.

The analogy of a frog slowly boiling in a kettle is surprisingly apt in this case: most people don’t realize their sovereignty’s disappearing until it’s gone. Some never realize, a boilerplate is enough for them.

The perfect example is the European Union.

The EU’s foundations were laid with the creation of the European Coal and Steel Community in 1952, a trade agreement that harmonized supply chains of said critical resources. Not only would it be economically expedient, but it would “make war materially impossible” according to Robert Schuman in 1950.

From the beginning European technocrats realized that economic integration would inevitably lead to political integration.

And it did.

Trade agreement after agreement followed, each justified on economic grounds: “it will make us prosperous” the technocrats said. Perhaps they did. But more and more laws needed to be harmonized to ensure Europe’s economies could continue to integrate, meaning that sovereign states needed to surrender more and more power to Europe.

This same logic justified the EU parliament, currency, and constitution.

When will it stop? Who knows. But when it unravels, it’ll be ugly.

Political Independence Requires Economic Independence

We’ve long known that political independence is predicated upon economic independence. In fact, America was founded on this observation.

This is why the second bill George Washington signed after independence was the Tariff Act of 1789. It isolated America’s economy, forcing it to become independent.

Washington observed:

A free people ought not only to be armed, but disciplined; to which end a uniform and well-digested plan is requisite; and their safety and interest require that they should promote such manufactories as tend to render them independent of others for essential, particularly military, supplies…

Economic independence was America’s official policy until the 1970s, when everything was flipped on its head.

We can’t have our cake and eat it too, no matter what conservatives like Ben Shapiro say.

It’s time we embraced economic nationalism as much as we do political nationalism, otherwise we’ll continue to undo what we fight for.