Russia’s blow to globalization

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WASHINGTON, DC: While it lasted, globalization was a beguiling tale we told ourselves about the future. The world is interconnected, and therefore getting not just richer but more peaceful. The technologies of international capitalism — outsourcing, insourcing, offshoring — would not only make the world’s businesses more profitable, they would make people less quarrelsome. We would play chess online with Indians, and thus become more like them. We would buy software from China, and thus never go to war with them. Even better, once they started trading, India and China would never go to war with one another.

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At the height of this optimism, the “McDonald’s theory of international relations” was a thing one heard about quite frequently. The idea was that no country with a McDonald’s restaurant would ever go to war with another country with a McDonald’s restaurant, because in order to have a McDonald’s restaurant you had to be thoroughly integrated into the global economy, and if you were integrated into the global economy you would never attack another one of its other members. This theory of “McPeace” was exploded, literally, by the American bombardment of Belgrade, the city which in 1988 had opened the first McDonald’s restaurant in the whole of what was about to become the ex-communist bloc. But the hope that it might be true somehow lingered on.

This week, as Russia, a country with 433 McDonald’s, ramps up its attack on Ukraine, a country with 77 McDonald’s, I think we can finally now declare the McPeace theory officially null and void. Indeed, the future of McDonald’s in Russia, which once seemed so bright — remember the long lines in Moscow for Big Macs? — has itself grown dim. In July, the Russian consumer protection agency sued McDonald’s for supposedly violating health regulations. This same consumer protection agency also banned Georgian wine and mineral water “for sanitary reasons” before the 2008 Russian-Georgian war, and it periodically lashes out at Lithuanian cheese, Polish meat and other politically unacceptable products as well.

Perhaps we should have paid more attention to these politically motivated trade boycotts, for it turns out they were a harbinger of what was to come. If we didn’t, perhaps it was because the tale of globalization promised more than just eternal McPeace. It also offered a reassuring promise of irreversibility. For the better part of two decades, we have taken for granted the assumption that globalization is a new stage in world history, not a passing phase. Surely the binding ties of trade would last forever because they were mutually advantageous. No country which had seriously begun to play this “win-win” game would ever be able to abandon it, because the political costs of doing so would be too high. Trade wars were meant to be a thing of the past.

This week — as Russia bans all American, European, Canadian, Australian and Japanese agricultural products — globalization suddenly began to unravel a lot faster than anybody imagined. The Russian president knew sanctions were coming, and openly declared that he didn’t care. He also knows that a trade war will hurt a wide range of his countrymen, but he didn’t mind that either. Western sanctions on Russia were deliberately designed to target a small number of people in the financial and energy sectors. Russia’s food sanctions will hit a lot of large and small companies, mostly in Europe, but they will also affect almost everyone in Russia. Right now, Russia imports at least a quarter and possibly as much as half of its food, not only camembert from France but frozen peas from Poland. Imports have both increased consumer choice and lowered prices for ordinary Russians. Now choice will shrink and prices will rise.

In other words, a large country that contains internationally traded companies has decided it prefers a territorial war with one of its neighbors to full membership in the international economic system. A large country that contains plenty of people educated in global economics has also decided it can accept higher food prices in the name of national honor. It is not only possible to reject the “win-win” mantra of globalization in favor of different values and another sort of politics, it is happening right now. And if it can happen in Russia, it can happen elsewhere too.

© 2014 THE WASHINGTON POST WRITERS GROUP

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4 Comments

  1. President Putin knows that he is taking a risk in the retaliatory sanctions he made against the west. But he knows that he has the backing of his people in this conflict and despite the hardships the Russian people will back Putin. The same thing cannot be said of the Western Imperialist powers. The people of the western world knows very well that the overthrow of the legitimate president in the Ukraine was the handiwork of the CIA. And they also know that the Russian speaking people in the east are only fighting for their legitimate rights (which was trampled upon by the US). Both sides ij this trade war will suffer. But the people of Russia are willing to endure whatever the consequences. The people of the EU is another matter. Britain is already considering abandoning the EU. The rest will probably fall like dominoes if the going gets tough.

  2. Anne Applebaum is a political prostitute spreading his ignorance for money. Castigating Russia for retaliating for US– NATO’s expansionism. This ignorant woman, should know the US-NATO started it all. Spending $5billion to overthrow the legitimately elected president of Ukraine by coup d etat, installing a fascist oligarchy in power, and waging war against its own people who resist their policy of ethnic cleansing, and trampling of their own constitution. This woman should know people in the south and eastern part of Ukraine who believes in real democracy has no choice but to resist because they are literally being killed by their illegitimate government. Russia has no choice than to defend their own people in Ukraine separated by cold war boundaries. Not heeding their call for dialogue and negotiations, the west move on to escalate the situation and launched the internationally illegal economic sanctions against Russia, that now Russia attempts to arrest by retaliation. The Russian ban on western food is justified under the present aggressive policies of international lawlessness.

  3. McPeace may be dead but this phase may be the forces behind so-called “globalization” joining battle with counterforces — nationalism, tribalism, militarism, and, that old reliable, folly. You choose which one(s) apply to Russia.

  4. Anima A. Agrava on

    That fraud that is “globalization” also helped impoverish us Filipinos. Yes, because of it Makati and now the whole of Metro Manila suddenly had all the great stores in New York and branches of US restaurants and some UK and Western European restaurants and shops.
    But globalization did not do anything for that 50 % or maybe more of our populations that Mr. Juan Gatbonton’s fantastically excellent article pointed out in your issue last Sunday. Globalization only widened the gap between the two halves of our dual economy. Globalization even made people earn less because the malls and department stores are no longer hiring regular permanent employees but millions of casuals hired by agencies to sign 5-month contracts.
    But the truly great economies — like Japan — has not been damaged by globalization or any of the free-trade crap that the UsA, the World Bank-IFC, Davos, ADB, and so on sold the self-serving government, banking and private sector bosses of other countries as the Philippines. The Japanese economy is still the world’s biggest and strongest. Its problems come from having stupidly bought into the other big racket the West imposed on other countries–abortion and contraception to reduce population growth. The result is that Japan has a severely aging population.