North Korean events threaten globalization

This important analysis from economist Stephen Roach at Morgan Stanley suggests why those interested in the globalization process – errouneously seen by many as purely a function of economic forces – need to pay close attention to the events in North Korea.

As Roach suggests, one of the key drivers in globalization is the ready availability of cheap labor in places like China. While some in the labor movement advocate cozying up to Beijing, the reality is that that regime is helping undermine global labor standards slowly built up by the trade union movement over many decades. Combining cheap labor – artificially cheap because of repression – with new technology and financial innovations has made “globalization” one of the most powerful political enemies of labor since the rise of stalinism and fascism itself.

But globalization is not just an economic process but a political one as well. The the rise of new forms of authoritarianism such as that in the middle east or in places like Venezuela are a kind of “blowback” against globalization and threatens its success. As Roach notes: “A successful globalization is forged on economic, political, and even military terms. Kim Jong Il is yet another challenge to an already precarious post-9/11 world.” Advocates of globalization, and those in the labor movement who speak of its inevitability, have a lot of explaining to do as these kinds of risks increase.

Morgan Stanley