The Times Has Revelation on Global Economy

The market recognized costs of production are finally starting to catch up to the real costs.

The "new" global economy, fragmenting production across international production chains, has long relied on cheap oil and labor. Social, environmental and deferred economic costs were externalized. Out of sight, out of mind.

Rising oil prices, however, have made long distances long again. Long and expensive.

According to today's remarkably critical article in The Times, "Cheap oil, the lubricant of inexpensive transportation links, may not return soon, upsetting the logic of diffuse global supply chains." I think that is the most intelligent teaser that I've ever read in The Times. Perhaps Thomas Friedman will now announce that the world is, in fact, not flat? 

The article also credits the global movement against neoliberal globalization: "But globalization may be losing some of the inexorable economic power it had for much of the past quarter-century, even as it faces fresh challenges as a political ideology." What they don't say is that some of the ideological challenges that corporate globalization has faced were centered upon pointing out the social, environmental and economic untenability of shipping everything around the world instead of developing local and regional economies.

But they do seem so caught off guard that they quote Lefty economic critic Naomi Klein instead of feeding at the usual neoliberal trough of think tankers. It even refers to the movement against the free market orthodoxy in the Global South. Corporate press typically describes "protectionism" in the U.S. and Europe as being the main 'obstacle to helping' developing countries through "free" trade. As unpopular as NAFTA is in the U.S., it is far more detested in Mexico.

But the global movement against corporate globalization is getting a boost from market realities. A report cited in the article states, "The cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today has effectively offset all the trade liberalization efforts of the last three decades."

A first piece of realism appeared in June.  Dan Koeppel wrote an Op-Ed explaining how rising oil prices might some day not too far into the distant future push the price of a pound of bananas to $1. 

Today's article also does a decent job on food, saying that increasing transportation costs may fuel the local food movement. Living in Ecuador, I'm getting my fill of bananas now, before I move back to the States in January.

It is, of course, easier for The Times to be progressive on food issues. Michael Pollan's excellent and quite radical critique of industrial agriculture is acceptable because, for many yuppies, local is the new organic. If the same level of critique was permitted on the topics of labor exploitation and US imperialism, the editorial page would be a way different place. 

But maybe increasingly harsh economic realities will mean more honest reporting on globalization? We'll see.