Globalization and Ukraine

For over half a decade, the Western world has grappled with the discontents of modern, globalized civilization. The notions of “free trade” and “maximizing productive efficiency” had led the West to sell its jobs and its factories to low-wage nations like China. Then the West tried to content itself with so-called “service” economies, even lauding them as “advanced.”

So the West’s so-called “developed” nations’ came no longer to invent or make much. Instead, their workers took up shuffling paper, handling money (mostly virtually), cooking and serving each other food, giving each other haircuts, and suing each other. (We leave aside the arts, which may be the best part of a “service” economy. You can’t eat, drive or live in a book, play, song or painting.)

This state of affairs provoked exploding angst among production workers. Especially in so-called “developed” nations, it spurred vast political movements, now dubbed “populism.” It put our Demagogue in the White House. It motivated the rise of autocrats in Hungary, Poland and Turkey. After four centuries of the Western Enlightenment, it has led thinkers to foresee its end.

Bewitched by facile economic abstractions that fail in practice, the West has made scant progress in winding globalization down. The Demagogue imposed non-targeted, blunderbuss tariffs that were mostly counterproductive. Corporate CEOs started thinking about the cost and vulnerability of long supply chains, and how to bring some production home. National-security mavens started worrying about what might happen, in a conflict, to a nation that makes hardly anything tangible anymore.

But the process of de-globalizing was barely getting started, moving with all the speed of molasses in winter. Then, in the space of two weeks, Vladimir Grozny, with his atrocity in Ukraine, literally blew globalization up.

His means was as simple as it was unexpected: a gratuitous, unprovoked imperial war of aggression against Ukraine, replete with massive bombardment of civilians and civil infrastructure. Long after the end of the bloodiest war in human history, plus the development of nuclear deterrence, no one could foresee such a thing.

Virtually no one did, with the possible exception of a few hard-headed realists in our CIA. Most analysts were looking for some clever bluff or diplomatic ploy, not a bloody, inhuman war against civilians and civil infrastructure. But one man—the modern world’s most complete autocrat after Kim Jong Un—brought all this to us out of his very own aging and fevered brain.

Now that it’s happened, and now that its consequences are inescapable, we should all think hard about it. What wider consequences does it portend?

As always, it’s worth looking first at the positive. Believe it or not, something positive may well come out of Putin’s Atrocity.

By blowing up globalization in the space of two weeks—albeit limited to Russia and its eleven time zones—he gave the lie to all the myths and specious “economics” that have held the world in thrall for two generations. Well-justified outrage, fear and hate have motivated us in the West to do in weeks what careful rethinking might have taken decades.

Take oil first. It’s the most “globalized” of commodities, perhaps save wheat or rice. As I analyzed recently, it’s going to run out globally, certainly this century, most probably within about two decades, give or take. So the “dress rehearsal” for runout caused by Putin’s Atrocity is a valuable lesson for a global society addicted to oil, especially the West.

How senseless is this addiction? Once our species’ energy transformation is complete, distributed solar, wind and much safer nuclear energy (perhaps including energy from nuclear fusion) will all be generated locally, near where it’s used. If necessary to even out local variations in sun and wind, and if battery and other storage is inadequate, some energy may be transmitted a few hundred miles or so. Transmitting it, as distinguished from generating it, will be relatively costless: the only cost of transmitting electricity over an existing grid is the cost of maintaining that grid.

In contrast, consider what we do with oil today. The bulk of production comes from a few places with the huge oil reserves and (to put it delicately) unusual politics: Iran, Iraq, Russia, Saudi Arabia, and Venezuela. From these places, it gets shipped thousands of miles around the world to wherever it is burned.

Think numbers a bit. We humans use over 100 million barrels of oil per day. A barrel of oil masses 136 kilograms and weighs about 300 pounds. So every single day, rain or shine, we ship 13.6 billion kilograms of oil—13.6 million metric tons, or 15 million Imperial tons—thousands of miles all over the world, and all just to burn them up. As just one example, that’s a mass/weight equivalent to half a million cars, every single day.

And what happens to all this oil once it gets where it’s going? It gets refined, at the cost of additional pollution and waste of energy. Then it gets burned up, polluting our atmosphere and warming our planet in way that will render our climate, weather, sea levels and coastlines unrecognizable, in about the same time as it takes for oil to run out.

This whole process produces nothing tangible or lasting, at least not directly. It can assist in the making of things, mostly by moving their raw materials and their parts about. But most of the oil gets burned up in transportation, including transporting people and the oil itself, as well as its refined products. How much sense does that make, just from the perspective of waste, let alone climate change?

Through the global reaction in isolating Russia, Putin’s Atrocity has shown us just how unnecessary all this is. There will be price hikes. There will be market dislocations and instabilities. But we will get through this, with a will and a determination borne of outrage at Putin’s Atrocity. (We will get through it quicker and better if we have a rational plan to transition to non-fossil energy, with national fossil reserves appropriately conserved and protected and used sparingly during the transition.)

Once we do, this experience will have shown us just how quick a transition away from global dependence on a few petrostates could be. If we can make that transition in weeks for one big petrostate, when motivated by well-justified outrage, fear and hate, can we do it in a few years, globally, when motivated by our own rational, economic self-interest and our own long-term survival and happiness? The jury is still out.

Endnote: the Two Kinds of Globalization There are two kinds of globalization: the globalization of things, and the globalization of information. The reasoning in this essay applies only to the former.

Today it makes little sense to ship things—especially consumable commodities like oil—around the globe, except perhaps in the start-up phases of new industries. For an example, consider rare, non-consumable commodities like the lithium, cobalt and rare earth metals used in electric cars. With enough clean energy, these materials can be recycled from exhausted products. American business is already doing that with lithium-ion batteries for electronic products and for Tesla cars. With enough green energy, similar mined products will be needed only to establish an industry; once the industry reaches national or regional scale, recycling can maintain its “steady state.”

Some products require only commodities available locally, such as cement, iron, or other common minerals. These products can be made with best practices transmitted (perhaps for a royalty) from anywhere on Earth. Even now, for example, we can imagine houses and buildings being built by 3D printing, with plans transmitted from anywhere, as could the 3D printers themselves.

Information is another story. Our species’ global system of telecommunication, including undersea cables and satellites, is already well established, although not yet entirely global. The primary costs involved in it now are those of maintenance. The marginal cost of sending a message or video clip anywhere on Earth is practically zero.

So globalization of information—news, science, technology, know-how, or the arts—is practically costless and extremely valuable. In fact, it was (paradoxically) the globalization of information, in the form of news about Putin's Atrocity, that appears to have motivated the coup de grace for globalized trade in oil.


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