“When goods don’t cross borders, armies will.”
– Frequently attributed to Frédéric Bastiat
“Free trade agreements are trade agreements that don’t stick to trade.”
– Ralph Nader
“The future has arrived. It’s just not evenly distributed yet.”
– William Gibson, circa 1993 in an interview (original version of the quote)
The political speech-fests are finally over. Republicans and Democrats conducted largely violence-free quadrennial conventions – but not because everyone loves each other. The disdain was palpable, both within and between the two parties.
On one topic, however, both campaigns agree: global free trade has jumped the shark. We haven’t seen this kind of protectionist rhetoric in a long time, at least from major party candidates. Globalization is taking the blame for a wide variety of ills. The trouble with all this dissing of globalization and free trade is that, like some generals, both major political parties are fighting the last war, not the ones we face today and tomorrow. And the Libertarian Party seems to think that the correct philosophy by itself will cure the problems, which it may do in the long run; but philosophy doesn’t pay the bills or create jobs in the short run.
However, we should recognize that aimless, disorganized criticism isn’t necessarily wrong. Real economic problems led to Donald’s Trump’s GOP nomination. Ditto for the strong Bernie Sanders run against Hillary Clinton. People aren’t just imagining their pain.
I have used the quote from William Gibson several times this year at the opening of the letter: “The future is already here. It’s just not evenly distributed yet.” I decided to do a little research on the quote and found that the popular version actually comes from an interview in the documentary Cyberpunk. The quote evolved over the next few years to today’s form. Most versions that you read, including the one I’d been using, did not have the final word yet at the end of the sentence. And yet (he wrote with a smile), for the purposes of today’s letter, that is the key word. We are going to talk about the negative public sentiment that is surfacing in the developed world and why the benefits of globalization are unevenly distributed.
I should note that I’m going to flesh out this whole concept in several chapters of the book I’m writing about the changes coming in the next 20 years. We are actually going to see large changes in the nature of globalization, and they are going to have a profound impact on the future of work.
Here I have to offer a mea culpa. I have used the line “I don’t know where the jobs will come from in the future, but they will” numerous times over the last 10 years. That assertion is not just a glib statement; it actually reflects our historical experience. It is part of the whole “creative destruction” concept – that old industries and noncompetitive enterprises give way to innovative new industries and more competitive enterprises that ultimately create more jobs. Farm jobs went away, but jobs in factories and in the services sector were created through the process of industrialization. Manufacturing became more efficient in the ’60s, ’70s, and ’80s; and then the advent of the personal computer, the Internet, and other “high” technologies created even more jobs. It was a seemingly virtuous circle.
Looking back over the sweep of time, it was. But it would have been impossible to explain that to the farm workers who had to leave their farms in the 1800s because of the McCormick reaper and go to the cities to find jobs, which were not initially abundant. Eventually this labor was absorbed, but it took a lot of time and retraining. And the process created political movements and a lot of political angst. More on that process later.
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