The World in 2050_ Four Forces Shaping Civilization's Northern Future - Laurence C. Smith [10]
No doubt everyone has a different answer to Friedman’s question. For me, it was in Burbank in 1998, while waiting in a queue at an IKEA home-furnishings store. It struck me that my arms were filled with products designed in Sweden, built in China, shipped to my store in California, and sold to me by a Mexican cashier. From a single store selling pens and seed packets in tiny Älmhult in 1958, IKEA had grown to three hundred franchises in thirty-seven countries by 2010. At €22 billion (USD $33 billion) annually its economy was bigger than that of the country of Jordan and adding twenty-plus new stores worldwide each year.28 Not only is this single company now a planetary economic force, it is globalizing Swedish culture by cultivating a taste for juicy meatballs and clean Scandinavian furniture design from the United States to China to Saudi Arabia.
Globalization kills economies too. After years of slow bleeding, my wife’s hometown in Michigan crashed when Delphi, a major supplier of automotive parts to General Motors Corporation, went bankrupt. Also, globalization’s spread is very uneven: The world is not so much “flat” as it is lumpy. Some countries, like Singapore and Canada, are integrating broadly and rapidly whereas others, like Myanmar and North Korea, are isolated backwaters.
Taking the long view, the world appears to be in the early phase of an economic transformation to something bigger and more integrated than anything ever seen before. It is more far-reaching and sophisticated than any previous alliance in human history. We will all be potential rivals, but also all potential friends. Alongside the demise of entire sectors will be new markets, new trade, and new partnerships. Gone are the days when General Motors could import rubber and steel and export automobiles. The design, raw materials, components, assembly, and marketing of today’s cars might come from fifty different countries around the world.
But what unleashed this new era of global integration upon us? Was it the blazing speed and easy reach of the Internet—or something deeper? I only noticed it in 1998, but might this phenomenon be older than we think?
Like rising world population and natural resource demand, the present global integration lifted off in the middle of the twentieth century. But unlike the first two, it happened deliberately. It all began with a big conference in the Mount Washington Resort near Bretton Woods, New Hampshire, in July 1944. Over seven hundred delegates from forty-four countries—including Britain’s John Maynard Keynes (whose ideas later found new life in the wake of the 2008 global credit meltdown)—were in attendance.
World War II was drawing to a close. Governments were turning their attention to their shattered economies and how to rebuild them after two catastrophic wars, a global depression, a long escalation of protectionist tariffs, and some crazy currency devaluations. Everyone at the conference wanted to figure out how to stabilize currencies, get loans to war-ravaged countries for rebuilding, and get international trade moving again.
The outcome of this conference was something called the Bretton Woods Agreement. Among other things, it stabilized international currencies by pegging them to the value of gold (which lasted until 1971, when President Richard Nixon dropped the U.S. dollar from the gold standard). But its most persistent legacy was the birth of three new international institutions: the International Monetary Fund (IMF) to administer a new monetary system; the International Bank for Reconstruction