globalization

Oversaturation

I want to suggest today that globalization as a process has reached a new condition, akin to that reached by modernization in the 1950s.

In using the term "late globalization," I am referring to Ernst Mandel's concept of late capitalism, the point when capitalism was everywhere, saturating the world. With the spread of the Internet and mobile telecommunicational devices, the disconnected world of the past is long gone, rapidly becoming unfamiliar to us. Soon, the disconnected world will become unintelligible, its artifacts and ways of life lost to generations that will have no experience of it. If, in 1999, TJ Clark could write of "modernism is our antiquity…" then today we must add postmodernism to our antiquity as well.  

The global credit crisis of 2007 and 2008 marks a further turning point in globalization. With the production of mortgage-backed securities, it became possible to easily and abstractly trade in real estate, formerly the slowest, heaviest, and most immobile form of investment. Fueled by delirious amounts of excess capital accumulated during the operations of globalization, the real estate boom and bust marked the point of globalization's oversaturation.

Since then, the removal of barriers that has marked globalization has slowed and even reversed in some cases. The Eurozone is under stress, even in danger of collapse. As the price of labor in China rises but falls in the United States, the US's industrial production is rising, Chinese imports to the US are declining and China is finding its domestic market more and more important. But we are also seeing a resurgence in nationalist movements and a rise in state capitalism. This is not to say that the removal of some barriers will not continue, but that we are now in a different dynamic in which continued globalization should not be assumed.

Still, with the spread of global trade and telecommunications it is impossible to return to the previous era. The idea of jetting off for a weekend abroad is no longer the province of the rich and famous. Even the idea of the "jet set", as a distinct group, has faded (excepting of course the private jet set… about which more later). Constant travel and continuous cross-border communication has become a fact of everyday life for individuals throughout the world. Tourism is now a familiar practice rather than an exotic one, taking the same forms throughout the world, reducing formerly distinctive places across the globe—the Rambla, the Île de France, Hollywood Boulevard, Venice's San Marco—to the same condition, occupied by the same people. The Bilbao-Effect is also consigned to history, becoming less and less important, a product of a globalizing world, not one that has globalized. 

At the Netlab, Leigha Dennis, Cloud Communications Officer at GSAPP and I will be working together with Tim Ventimiglia, Senior Associate of Ralph Appelbaum Associates to explore this condition of oversaturation in depth, to understand how it manifests itself in economic, social, and cultural terms. Our goal, which we have begun to explore in this research blog, is to investigate the changing landscape of travel at a crucial juncture in world history.  

Regarding the Euro

The biggest story of the last two decades has not been the opening up of China, rather it's been the creation of the Eurozone.

wiki media map of eurozone

First off, take the size of the combined economy of the Eurozone. In terms of GDP, it is larger than China, second only to that of the US (the European Union, which also includes the United Kingdom and much of Eastern Europe would be the world's largest economy, except that it quite doesn't function as one economy). 

Since I write about architecture, networks, and economy, the reason I am interested in the Eurozone is that it was an unprecedented construction of a single smooth space—to use Deleuzean terms—on a planetary scale. With the fall of the Iron Curtain in 1991, it seemed to confirm Deleuze's suggestion that the old regime of enclosures was giving way to a new world of modulations. Seemingly overnight, national currencies and border controls, the most familiar artifacts of modern nationhood, disappeared to get out of the way of the rapid circulation of capital and increased worker mobility. For Eastern Europe the delight in national independence at last swiftly faded, giving way to the rush to be subsumed into a larger union again, albeit voluntarily this time, without the Soviet Union's tanks and guns. 

What struck me during this period was the incredible openness of Europeans, both to each other and to those of us whose primary residence was abroad. As borders opened, so did minds. The development of the Internet went hand in hand with this opening up, allowing Europeans to go beyond the traditional boundaries of their national languages and literatures to share their ideas and learn from others at remarkable speeds. This is not to say that this wasn't going on everywhere, but it was particularly in evidence in Europe where the growth curve was very fast, a stark contrast to what was going on in the United States where thought often seemed stuck in the dark ages. For a time, Europe seemed to regain its status as the world's center of culture—as much as such a thing could exist—from the United States. Who would have thought, in 1991, that two of my books would be published by a press in Barcelona, that I would publish as much in European periodicals as in the United States, or that I would be teaching in Ireland part time? 

But as the August crisis—and the last three years teach us—that growth curve got ahead of itself and Europe now faces a grave economic crisis. The economies of European countries were at different places when they joined the Eurozone and there's no way that in a few years everyone could be at the same place as Germany. Where it seemed to happen, as in the last half of the Celtic Tiger, this was largely done on debt, a condition that has now been demonstrated as impossible to sustain. 

Now that the collapse of the Euro is being talked about as a real possibility, what sort of impact will this have on network culture? Is the Eurozone like the League of Nations, a great idea whose time has not yet come but will arrive, bigger and better soon? Or is it a historical anomaly? Even if globalization is a dominant economic force today, will a decade of economic stagnation couple with a collapsed eurozone lead to renewed calls for nationalism? Is the dialectic of smooth and striated space (remember, for Deleuze it was always a dialectic) about to shift again? 

These are some of the biggest questions for all of us this fall. 

Goodbye, Foreign Bureau

With the uprisings in the Middle East and the aftermath of the Sendai earthquake, media and how we view them continue to be revolutionized.

There's been a lot of talk about Twitter in both cases, but social media sites are only part of the story. Twitter is good for fast breaking news, but Twitter has its problems, some of which are described in this piece by Robert Niles at the Online Journalism Review. It's hard to sift for information among the noise. Take the earthquake and tsunami, for example. When they hit, it was only because I visited CNN's Web page that I found out about them. My Twitter feed was occupied by other matters and news on the topic had scrolled by. Moreover, Twitter easily drags us into multiple, overlapping conversations. For example, yesterday the whole death of criticism discussion began again derailed my day for some time until I could finish a blog post on the topic and then discuss it with other individuals on Twitter. When crises like this are happening, its easier to turn off Twitter and look to media that demand less participation, like video streams.

But American news channels like CNN or MSNBC quickly lost their appeal for me as sources for what is going on in Japan. I don't need to see celebrity reporters like Anderson Cooper and Soledad O'Brien in Japan describing how harrowing their trips from the airport were or how small their hotel rooms are. When one American reporter reported that Japan was strange, like the film "Lost in Translation," it was time to turn off the channel.

Instead, I've been watching NHK World's English feed on my television via a stream to my Mac Mini home theater PC. NHK repeats footage and, as the national broadcasting network of Japan, strikes me as the voice of the government, but if there's going to be breaking news, it seems likely that I'll see it here.   

Similarly, when the revolutions in the Middle East began, like many people, I turned to Al Jazeera. US Secretary of State Hilary Clinton's comments hit home:

Al Jazeera has been the leader in that [it is] literally changing people's minds and attitudes. And like it or hate it, it is really effective... In fact viewership of al Jazeera is going up in the United States because it's real news. You may not agree with it, but you feel like you're getting real news around the clock instead of a million commercials and, you know, arguments between talking heads and the kind of stuff that we do on our news which, you know, is not particularly informative to us, let alone foreigners.

(see here for more) 

Al Jazeera has hardly been a bystander in all this, repeatedly suggesting to viewers that they demand their local cable companies ask for feeds. At times this seemed a little crass, but given the kind of self-promotion that US news outlets revel in, understandable. 

Western media outlets once thought that as the world globalized, they would expand endlessly. But the opposite is proving true. With access to more news outlets, we are finding the older ones too ideologically corrupt and superficial (Judith Miller anyone?) and instead of monitoring hastily put together foreign bureaus, wind up turning to local sources. 

Of course the same goes for architecture. Why would anybody want to read an American critic flown to China on an all-expenses paid junket to praise a building by Zaha Hadid in China (or worse yet, look at some renderings and pronounce it cool) when a Chinese critic might critically discuss the building in its context?  

If the result is a better-informed world, saying goodbye to the foreign bureau will hardly be a loss to anybody but the reporters.  

On The Great Big Third World

Capitalism, especially under globalization, produces homogeneity. We're quite familiar with the spread of McDonald's and Frank Gehry around the world, but the most important aspect of this spread is an economic levelling. To be sure, capitalists exploit differences between local economies—for example, cheap labor in China—but as history progresses, these differences lessen.

Take, for example, Ireland, where I teach from time to time. Even though it has an English-speaking population and is conveniently located, Ireland lagged behind the UK and Anglophone North America due to a long history of British colonial oppression and, subsequently, government policies that stressed agrarian self-sufficiency. Thus, labor and land were underexploited and, when investment money poured in during the 1990s, the Celtic Tiger exploded. By the mid 2000s, the price of labor and land in Ireland had caught up and the Celtic Tiger entered into an artificial afterlife, extended by banks, businesses, and governments that didn't want to face its end. By 2008, Ireland was considered the fourth most expensive economy in the world. The result is predictable: industry is moving out of Ireland rather and workers from Eastern Europe are returning home. The idea that Ireland will add one million new residents in a few decades seems preposterous again.    

But unquestionably, China is the real economic powerhouse of the last decade. For the most part, China's been able to grow tremendously now due to centuries of underdevelopment. 21st century Chinese wonders like the CCTV building or the 300mph maglev trains are possible only because the vast majority of Chinese make around $2,000 per capita annually (see here) and a vast migrant labor force exists to keep labor prices down. As Chinese labor prices rise, it too will become less competitive. If the one-child policy has created a ready supply of male workers without children to support, when this generation ages a few decades from now, China's workforce will collapse.

Back in the United States, I don't see how we can pay for the massive borrowing that the Bush and Obama administrations have undertaken without a currency devaluation. This is unlikely to happen overnight, but rather I see it as being a period of double digit inflation (our current inflation rate is already much higher than official figures, thanks Alan Greenspan) and double digit interest rates.

Not only will this help with debt repayment, it will be a convenient way of devaluing homes. Let's say  you have an interest rate of 5.9% locked in and a house worth 400,000. House prices are stable even as inflation is 10%. Your house is losing 10% value a year. You might complain, but at least you have a house so you won't complain too much. A new homeowner is facing interest rates of 16% to get into the market. Your interest rate sounds like a pretty good deal in comparison. Five years of 10% inflation and no increase in house prices will pretty much take care of the overpriced housing market.

I'm old enough to remember the 1980s, which made me much more cautious than many Generation Y types when it came to the last boom. I remember when cyclical unemployment in big industry turned into structural unemployment and, like inflation, was written out of the system under the Reagan administration. If you're unemployed for too long, the system says you're not really looking for a job—even though you may be—and if you're a freelancer or working part-time, you're also not unemployed. So if we're seeing 9.4% unemployment this month, you should probably double that to get a real picture of how many people aren't being employed in traditional fashion. What if this continues for a few years? And what if we get the high interest rates that I predicted, eviscerating home values? 

I think the result is a country that approaches "Third World" status with a cheap labor force that will take on contract work without any guarantee of continuing employment for low wages. Take a look at this article from the Times on the troubles that freelancers face. I'm afraid that for higher-paid members of the service industries (media, education, architecture, art, finance, personal services) the 2000s are going to seem very much like the 1980s did for blue-collar workers.

Make no mistake, the EU is no better off. The Euro is not a stable currency and I'm not willing to put money down that it isn't going to tank first or harder than the dollar.

The Third World didn't vanish in the worldwide economic "boom," it spread everywhere. That's what the last two decades have brought us. I knew that the Bush administration was alternately too stupid and too evil to point this out, but Obama had the opportunity to force Americans to face up to the crisis, as FDR did when he took over in 1933, but he took an easy way out. Now we'll all pay the price. Welcome to the new, improved, much larger Third World.

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