Reverse globalization?

I had lunch with an economist last week and suggested to him that globalization was entirely dependent on cheap transport and that cheap transport was based on cheap fuel. This stopped him in his tracks. It had never occurred to him that this one leg in the global marketplace could become the broken link that might bring the entire system down. Of course, the reason it had never occurred to him is that he had bought into the economic notion of substitutability, that is, that there is or will be a substitute for any product or raw material including oil AND that the substitute would come along in a timely manner so as not to disrupt our tidy global trade arrangements.

When I asked him what that substitute would be, he responded that we will run transport on electricity. I inquired whether he thought we could run aircraft and freighters on batteries. He agreed that it would be unlikely. I pressed him about whether tractor-trailers might run on batteries. He thought perhaps someday, but obviously not now. And, I asked where all this electricity might come from if not from coal-fired and natural gas powered generating plants. He said yes, indeed. Was he aware that in North America natural gas production is only keeping up with demand now and has probably entered a decline? Is that really true? he responded.

Here is an extremely bright, thoughtful, compassionate and well-informed person, deeply concerned about social and economic justice. But, as with so many people, it is almost unthinkable that globalization might falter and reverse, and with it economic growth. We have our work cut out for us.

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