Global East Driven Globalization 2.0
After decades of ‘year after year’ strong rising globalization, in the last decade that globalization has hit some borders/walls. Walls that even bounced back globalization. The old model of globalization is no longer on the rise, it’s even retracting/redrawing significant (in finance) or semi-gradually (in trade: not the EU, but China is now global biggest exporter). So Peak 'Old' Globalization is certainly behind us. How come? And/Or is something else happening? Is just the hegemonic form of globalization driven by the Global West (Globalization 1.0) declining and is a new type of peer2peer i.e. nation2nation globalization (Globalization 2.0) rising to replace the old hegemonic model?
Globalization 1.0 topped in 2007 as the first series of ‘bounce backs’ in globalization occurred during the Financial Crisis aka Credit Crunch of 2008. That these first cracks in the expansion of Globalization 1.0 occurred in the financial system is not that strangely: Many of the reasons why globalization stopped expanding are strongly financial driven facets, while the others also have a huge financial (with a monetary side) background. The importance of these financial influences in the process of globalization is also not that strangely: the economies of the Global West are financialized to a large extend since the 70ties. The decline of globalization as we know it is also very much interconnected with the decline of the so called ‘American Century’: the era that the US was for one of the two and since 1989 the only dominant economic power(s) of the world (and became attached to that also the dominant both monetary and military power).
Globalization 1.0 is both made and destroyed by financialization: it delivered a fast growing version of globalization that could not sustain itself (similar to the fact that financialization also was not able to deliver stability 'at home'). The decline of Globalization 1.0 is very much connected with the financialization of the economies of the Global West. To make this even more clear: financialization lead to economic decline of the Global West, which lead to decline of the Global West driven globalization model.
Out of decline of the Global West hegemony driven Globalization 1.0 i.e. on the ashes of Globalization 1.0 i.e. powered by the decline of Globalization 1.0 a new type of globalization will grow: Globalization 2.0, a version where the Global East and Global South take the lead, a version of globalization in which the word bilateral will take the lead. The way globalization develops has a lot to do with the way driving economies are designed and nations think. Globalization 1.0 thereby could be seen as the last phase of both neo-colonialism by and financialization of the Global West.
Every development can handle disappearance of the tail winds and can handle some head winds too. Globalization 1.0 is losing many of its tail winds and is receiving a lot of head winds. But due to ideological blindness Globalization 1.0 will never more blossom as it did: it just has not the ability to adapt to the rise of self awareness of the emerging nations. Globalization 1.0 was about domination, about seeing themselves as the better one. Globalization 1.0 is based on inequality. Globalization 1.0 was based on a not level playing field and that is changed. Globalization 1.0 could not survive in an equal playing field. Therefore Globalization 2.0 will replace it: the Globalization 1.0 model is just getting outdated for today's realities. Gradually, but decisive. Globalization 1.0 destroyed the soil is was growing on. Not strange as it was driven by financial capitalism and not by productive capitalism. Globalization 1.0 will go in the history books as the change for their own sustainable wealth the Global West spoiled by narcissism of it leadership.
As the economies of the Global West entered muddy waters by in the ‘What Ended Global West's Dominance’ listed developments, the Global West driven Globalization 1.0 model did too. The financial driven system of the Global West is outdated/toasted. So is Globalization 1.0, in terms of geo-economics, geo-political, geo-monetary and geo-military. The Global West driven unipolar model (US/UK with the EU as their vassal) of Globalization 1.0 is dying gradually. This is not left/right politics, but just plain a-political physics (the second law of thermodynamics): unilateral power systems are not sustainable sooner or later (they burn up, as they use instead of produce). New drivers are taking over, making a new version. Globalization 2.0 is on its way. The second law of thermodynamics supports this thesis.
After Nixon sunk Bretton Woods by unilateral terminating the core of it in 1971, Globalization 1.0 got instantly (really overnight) into serious dire straits. Kissinger saved it by installing the petrodollar system as Bretton Woods replacement. But the long term strategy of Globalization 1.0 as mainly made Zbigniew Brzeziński: the man that has actually shaped US foreign policy under ever presidency since the seventies (and therefore was important for the extension of the Globalization 1.0 model after Kissinger saved it).
The backgrounds of Globalization 1.0 can't be understood without understanding the huge benefits Bretton Woods delivered to the USA (installing their currency as global reserve currency, delivering them unlimited purchase power on the global economy), can't be understood without reading the works of Zbigniew Brzeziński (and particularly his Grand Chessboard work: https://www.google.com/search?q=Zbigniew+Brzeziński+grand+chessboard), can't be understood without understanding the influence of PNAC (http://en.wikipedia.org/wiki/Project_for_the_New_American_Century) that pushed the soft empire strategy of Brzeziński aside and also without understanding that the collapse of the USSR had made the USA overnight the sole global hegemonic power.
This suddenly becoming the sole global hegemonic power which gave those in office and their policymakers the maybe not that accurate feeling that everything they stood for was perfect. The book 'The End of History and the Last Man' by Francis Fukuyama (http://en.wikipedia.org/wiki/The_End_of_History_and_the_Last_Man) should be read for understanding this victory perception. But this victory boost has lead to less self restriction in a space with no competitors at all and thereby lead to huge overstretching of the empire (more than 1000 foreign military bases around the world), which is the main reason why all empires have failed in the past.
Lectures on the Grand Chessboard could be found at https://www.youtube.com/results?search_query=grand+chessboard+brzezinski+lecture. Quotes of the Grand Chessboard could be found at https://www.google.com/search?q=grand+chessboard+quotes.
Brzezinski's influence declined significantly after PNAC (founded in 1997 by William Kristol and Robert Kagan, interesting to know is that Kagan is the husband of today's important geopolitical actor Victoria Nuland) took over the direction/lead regarding US foreign policy somewhere around the millennium. PNAC turned the smart empiring of Brzezinski into bold power projection empering (something Brzeziński always tried to prevent: he sweetened it always to some degree). Much of PNAC's legacy was still direcly derivated from Brzezinski's work, they took his objectives but change the operation mode. Zbigniew Brzezinski was and still is the most influencial geopolitical advisor within the USA (who while getting old, still is actively competing with the former PNAC people on 'the tone of voice' of empering). His long time of influence makes his influence much bigger and wider than the back than very influential (but only while in office) geopolitical actor Henry Kissinger (although much of Brzezinski's work is based on the imperial ideology of Kissinger: Brzezinski is a typical 'student overgrows teacher' example).
Take in account that above information is just for delivering fact based insight into the driving facets behind Globalization 1.0, it is not cheerleading it. The very much documented and footnoted books of the american analyst/writer F. William Engdahl describe the work of all three important actors (Kissinger after Nixon terminated Bretton Woods, Brzezinski and PNAC) from the perspective of a critical outsider global perspective.
So by all the in the ‘What Ended Global West's Dominance’ document described facets, the Global West driven Globalization 1.0 start to decline and is still further declining. Globalization 1.0 will be gradually replaced within the next years by Globalization 2.0 (a more symmetric system build out of a network of bilaterals). Simply because the foundation of all things (which is real economic performance) is getting quick sand and the monetary hegemony of the dollar is ending (as nations jail breaking out of the petro dollar system). These two changes will have huge geo-political and geo-military consequences.
Proposed new leaps ahead like TPP and TTIP will yet be installed, but will not work. As they just empower the above described facets, TPP and TTIP will even speed up the economic decline of the Global West and the decline of Globalization 1.0. The patent based dollar (the one and only goal of both TPP and TTIP, not that many know this) will just have (by the combination of the lack of economic performance and decline of the petro dollar system) not enough power to get functional/powerful. Of course they will be installed as not that many governments understand the underlying submissive agenda. But when put into practice nations simply will not accept that their own legal system is used for this TPP/TTIP patent based extension of and extortion by the hegemonic Globalization 1.0 system. The key mover in this will be when nations start to understand they will not be possible to export any food related commodity or product without paying fees to the US based DNA patent holders. When this starts kicking in nations will start to jail break by cornering TTP and TTIP.
Leveraging declining economic performance with power projection is tempting, as it boosts more economic performance for some time. Not that many former top economic performing nations could resist the opportunity, but unfortunately it always fires back. Double luck (economic performance full blown leveraged by power projection) turns quick into double bad luck (economic decline while having a wrong economic model) if clients jail break, what they certainly will do when better options for them emerge. Sustainable economic growth/stability is even endangered by power projection.
Leveraging economic performance with smart mutual interest based networking with other nation is the other option. No foreign military presence needed for that. If foreign military presence is needed, a nation should start to think why this is needed: somewhere something has gone wrong. Every access in both military employees (above 2% workforce) and budgets (above 5% GDP) is draining economic performance directly. Every hour could only be spend once. Every dollar too. Empires are only good for the 0.01% of the 1%. The rest of the empire (both the homeland and the subjects) losses only. Combining economic performance with smart networking is much more effective, has less downsides/risks, is much more cheaper and last longer. That such a model will prevail is no rocket science.
Due to the combination of their economic performance, piles of debt, not that wise foreign policies and the monetary turbulence they went in the nations of the Global West (USA and EU) will become an isolated island in the global economy with declining living standards and therefore angry population. They will merge into one currency union and even for a short period into a federal political union. Than this last breath of Globalization will die too and the states of the USA and the nations of the EU will re-start in a Globalization 2.0 era. Not with a head start, but with a backlog.
One’s strength is also one’s weakness. Every head start carries the seeds of future backlogs in it. Smartness could prevent that these backlogs would occur. But head starts deliver wealth and wealth deliver some laziness. Head starts without that much introspection and self-restriction (by choosing the path of power projection as the default modus) is doomed to result in backlogs.
Globalization 2.0 is quite different: it’s build on the concept of mutual equality and mutual interests (and not on a strong server nation having relations with its submissive client nations). So it’s no longer the power nation / client nation model, but nations will find their peers based on mutual interests without any influence of other nations.
To understand more of this ‘global anarchy’ (as Zbigniew Brzeziński called it in his book ‘The Great Chessboard’, as said a must read book on globalization which is written out of the hegemonic realm and narrative and perspective) read Halford John Mackinder (http://www.google.com/search?q=heartland+theory+mackinder) and of course all the work of his biggest contemporary follower Brzeziński. Both of these men cherish the concept of a hegemonic power that’s calling the shots, their perspectives are quite racial. They think very much in übermenschen (they) and untermenschen (the rest) and in severe self-overestimating exceptionalism for the UK and the USA (the EU unfortunately moves in this direction too).
To understand more of the new peer2peer symbiosis based Globalization 2.0 model read the work of Alexander Hamilton (one of the founding fathers of the USA), Friedrich List and Friedrich Raiffeisen (two ‘before excel data formulas took over’ german economy development models economists). All those 3 successful economic theory/practice integrations giants unfortunately don’t have too much followers under the contemporary intellectuals (but their legacy will rise huge on the Globalization 2.0 wave).
A huge modern day driver of Globalization 2.0 will be the BCS/BTA (Bilateral Currency Swap / Bilateral Trade Agreement) combo. This combo will take the world by storm. It is a combination of mutual non-toxic monetary measures, in combination mutual interests based trade agreements. Both the non-toxic facet and the mutual interest facet are the reasons why the BSC/BTA combo will become the main road of Globalization 2.0. There are no downsides, there is no foreign hegemony who skims everbody's margin of by monetary tools: non-toxic and mutual interests are the two rails of this super track. To read more on the BCS/BTA combo see http://www.planck.org/publications/BQE-Bilateral-Currency-Swaps. Within one decade almost all global trade will be done based on this model.
In the 21st century not credit driven ‘growth’, but real economic performance will determine the global stage. In everything. Also in globalization trends. This is why Global West driven Globalization 1.0 is retiring and Global Rest driven Globalization 2.0 is blooming. The Global East will lead this Globalization 2.0. Not only will the Global West not drive this Globalization 2.0 wave, the focus of Globalization 2.0 will also not be on the Global West (as their growth has turned into decline and they went bankrupt), but it will be focused on Global South. Globalization 2.0 is more a Global East and Global South thing. The crumbs of Globalization 2.0 are for the Global West.
The first the 21st century defining question is this one: Will the Global West yes/no try to ignite wars abroad, or yes/no go to war in the aftermath of Globalization 1.0? Nations go broke do strange things. Channelling internal pressure to outside pressure is the oldest trick in the book of government. We’ll see. Let’s hope the leadership of the Global West will see that such a solution will not last and ruin the lives and future of themselves and their children. That any change to hook on to the thriving economies of the Global East and Global South will be ruined by this. The Global West will collide overnight into a common currency union (making the Global West defacto a federal transatlantic nation). This will not change the downwards direction of the economy and it will explode sooner or later. Than all the states of the USA and nations of the EU will join the bilateral model that the Global East and Global South already will have brought into action.
The second the 21st century defining question is this one: Will new empires rise or is the time of empires over? China will be the leading nation in this process. It’s up to the Chinese leadership if they want to make the same mistake as the USA made (which was: leadership with no self-restriction). First: the world in 2015 is quiet different than it was in 1945: more nations are emerged to higher levels and can’t be bossed around that easy. Second: The prevention of that is never ever the currency of one nation will get the special status of global reserve currency anymore. Globalization 2.0 is mainly bilateralization. Bilaterialization is a power concentration prevention Globalization 2.0 has build-in in its core.
The everything that got in its way demolishing austerity/deinvestment centred Chicago ideology driven Washington Consensus of the IMF has peaked an is in decline. China is taking over (see the deals they make in South America the last months) with the infrastructure investment driven Beijing Consensus.
But also the food production centred muslim nations driven Jeddah Consensus will rise. It will be an unique ISDB (Islamic Development Bank) backed offer in line with the ISDB motto of 'providing resources, fighting poverty, restoring dignity' and based on the http://www.desertcorp.com model. It will not be subsidies driven (as money=possibilities and should not decline), but market driven as that does the ‘providing resources, fighting poverty, restoring dignity’ job the best. The Jeddah Consensus will start with models like the DesertCorp model for food production in the deserts of the world towards the desert nations, but will further in Shariah based national economic development models (based on wide education and free distribution of open technology).
To end with the question at the beginning: Is just the hegemonic form of globalization driven by the Global West (Globalization 1.0) declining and is a new type of peer2peer i.e. nation2nation globalization (Globalization 2.0) rising to replace the old hegemonic model? Everyone should find an answer on this question based on their own research/assessment. We at Planck Foundation think the answer is yes. How to react on these changes? Those who hold on to the old models will gradually slide into dire straits (no matter if they chose conflict or passivity as their means). Those who use the waves of the new developments will have hay days. As final line a quote of the writer Anais Nin: "We don't see the world as it is, we see the world as we are."
See also International Currency Stability
See also Europe: Diagnosis and Prescription
See also Governmental Funding Turbulence
See also Labour Taxation
See also Money Creation
See also Energy Open Finance Platform
See also Global PV Solar Energy Finance Model
See also EQE/EBS Model Summary Diagram
See also BQE: Bilateral Currency Swaps
See also Gold Backing vs EQE/EBS Backing
See also Secular Stagnation as Denial Term
See also Financial QE vs Productive QE
See also Productive Capitalism Perspectives
See also Emerging Nations - Electricity PPP
See also Emerging Nations - Solar PPP
See also Easy Instant Solarizing Nations
See also Making The Euro More Offensive
See also Structural EU/EC Boat Refugees Solution
See also Global Solar Rollout - Description - Diagram
See also Regional Solar Rollout - Description - Diagram
See also Obama Administration Energy Strategy
See also China As Global Leading Solar Energy Nation
See also Open Finance Platform for Energy Investments
See also Iceland 3.0: Geothermal and Energy as Currency
See also Addressing Economic Decline of the Global West
See also IntraContinental: Continental Rail Schedules
See also Global West Enters Economic Adulthood
See also Global East Driven Globalization 2.0
See also Financial Capitalism vs Productive Capitalism
See also CIRI (China India Russia Iran) Avoids Dollar
See also Global West Gets A Common Currency
See also What Ended Global West Dominance
See also National Economic Development Organizations
See also Desert Investment Economics
See also Ending Global Poverty (By Sea Water Irrigation)
See also Global Deserts Exploration Model
See also WaterTech and MicroCredit Merge
See also Lupin As Soy Replacer
See also Global Seed Cartels Aren't Right
See also Global Food Model: Local to Global
See also Sun / Earth Interactions
See also Telco 3.0 : Telco out of the Cloud
See also National Business Clusters Abroad
See also Scientific Education/Research Funding
See also Iran: National Economic Plan
See also Immigrants and Trade
See also Emerging Nations - Minerals PPP
See also Emerging Nations - Deserts PPP
See also Emerging Nations - Energy PPP
See also National Solar Fund Model
See also Secular Islamic Finance
See also Open Energy Finance Platform
Gijs Graafland / Planck Foundation / Amsterdam / 2015
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