Our modern economy is based on efficiency, specialization, and globalization. Economists define efficiency as “the absence of waste when an economy wastes none of its available resources and produces the maximum amount of output that its technology permits.”
When a
country leans heavily on specialization, it devotes resources to only a
small proportion of the world’s productive activities. How does the country satisfy
its other needs? Enter globalization.
Merriam-Webster
dictionary defines globalization as “the development of an increasingly
integrated global economy marked especially by free trade, free flow of
capital, and the tapping of cheaper foreign labor markets.”
Manufacturing,
production, and supply chains in the U.S. were moved to China, Vietnam, and
Mexico because of cheap labor and less regulations.
Economists
argued in textbooks that everybody is better off in globalization, but that is
not true, ask the Rust Belt workers who lost their jobs in the quest for globalization.
Ask engineers and other professionals in the U.S. who had to train their
replacements from India after they were fired from their jobs.
Globalization
has driven the modern economy of the last four decades. We no longer manufacture
goods that are essential to the existence of our domestic market. It was
painfully clear when, during the Covid-19 pandemic, there were severe shortages
of goods resulting from interrupted supply chains coming from China and other
countries who manufactured goods that we no longer produce in our own country
because we were following the globalization’s economies of scale and cheap
labor abroad.
Globalization
has provided advances in the standard of living, infrastructure, in health care,
education, and population growth in less developed countries.
In the case
of a pandemic, a natural disaster, and war, countries will be forced to look at
ways to produce domestically what their needs are.
In the
developed world, the population no longer knows how to grow a garden, how to plant
a sufficient crop to feed everyone, how to preserve their own food, sew, make
necessary repairs in the home, hunt, or fish. In our economy, goods are discarded
and replaced, seldom repaired.
In the
absence of other specialized countries providing what we need daily, “Decivilization”
will follow. “Decivilization” as defined by Peter Zeihan is “a cascade
of reinforcing breakdowns that do not simply damage, but destroy, the bedrock
of what makes the modern world function.” With so many skills that we have
lost, it is easy to see how such breakdowns can occur in a large economy.
We cannot
eat technology, gadgets, or other things that drive our modern lives. We need
food, medicine, clean water, gasoline, natural gas, and electricity.
We have become
incompetent at tasks that are necessary for survival. We saw what happened to
Zimbabwe when the population was forced to survive on subsistence farming.
Venezuela
imported two-thirds of its necessary food before the economy collapsed and the
population was forced to eat animals from the zoo. Their oil production crashed
so much that farmers did not have enough fuel to plant crops. It was “the worst
famine in the history of the Western Hemisphere.” (Peter Zeihan, Mapping the
Collapse of Globalization, 2022, p. 64)
The more
recent developments in Italy showed how dependent the southern population was
on the delivery of food trucked from other parts of the country. Their grocery
stores were empty for weeks as the truckers went on strike on Italy’s highways
to protest the soaring prices of Diesel. Europe’s fuel prices have always been
higher than in the U.S., but the wars in Ukraine and Iran have driven prices
even higher.
The United
States is sufficiently diverse in resources that it can make the economy work
by being inventive. But most countries could be severely impacted if the flow
of goods and services obtained globally is interrupted. In such a case, the
political and economic map of the world will change. The urban areas will
suffer the most.
Another
variable that can also interfere with the global flow of goods and services
between countries and continents is a natural disaster on an unprecedented
scale, i.e., mega volcanic eruption, mega tsunami, earthquakes, solar flares.
The supply
and demand in a globalized economy will be impacted if development slows due to
the lower birth rate which in western nations is already below replacement
value.
Moving cheap
labor into Europe and the U.S., disguised as migration, may seem as a fix, but
most of these economic migrants become welfare burdens to the taxpaying
population.
Shortages of
goods and services globally will force populations to take care of the needs of
their own countries, the global flow of goods will stagnate, and the bedrock of
our civilization will unravel.




