Our love hate relationship with globalization

Canadians have a love-hate relationship with globalization. On the one hand, 100-mile diets and buying locally authentic products are all the rage.

Canadians have a love-hate relationship with globalization.

On the one hand, 100-mile diets and buying locally authentic products are all the rage. On the other, if you did eat a 100-mile diet you would still be wearing clothes from Bangladesh, using a fork from IKEA and neglecting your companions to check a smartphone designed in California and built in China.

Like it or not, globalization is a defining characteristic of our age.

It is also politically controversial. Some want us to think like global citizens. Others want to block immigration or restrict imports from foreign countries. It is also a topic we haven’t fully thought through, since many have contradictory instincts. Some parts of the political spectrum, for example, are in favour of being citizens of the world on environmental or immigration topics but look down on buying foreign products. Others are pro-trade, but anti-immigrant.

Some of the uglier tendencies on this topic have come out recently in Europe. Anti-foreign parties have done disturbingly well in recent elections, often stealing votes from traditional parties on both the right and left.

Benjamin Carle, a French journalist, has just completed a 10-month experiment that illustrates the complexity of the topic. Seeing Socialist minister Arnaud Montebourg launch a nationalist “Made in France” campaign in an attempt to save French jobs, he decided to test-drive the idea. He tried to live for a year using only French products.

Initially he found that around 95 per cent of the items in his apartment were non-French. Almost a year later, an external auditor declared his life to be 96.9 per cent French. He still had those IKEA forks, foreign wallpaper and never succeeded in finding French nail clippers. He had to go without a washing machine. Fortunately, his girlfriend was French and got to stay. (Nigel Farage, charismatic leader of the anti-foreign UK Independence Party that did so well in last week’s elections, has a German wife.)

At the end of his effort, Montebourg gave Carle a medal. From an ocean away, it seems slightly absurd to me to see a Frenchman worried if his cheese comes from Belgium, his coffee maker from Germany or his wine from Italy. Indeed, why restrict the feeling of absurdity to neighbouring countries. What’s wrong with Polish furniture, Canadian wheat or Chinese electronics?

This highlights one of the challenges of protectionism: how to define what to protect? Economics professors often demonstrate this with a reductio-ad-absurdum argument. Should we buy global or buy Canadian? Should we buy Yukon or buy Canadian? Should we buy Takhini or buy Yukon? Takhini North? Cassino Street? Your own house on Cassino Street?

I don’t think even the most enterprising residents of Cassino Street, if they wanted to emulate Benjamin Carle, could make their own smartphones.

Some worry about the environmental impact of long-distance shipping. But advances in shipping technology have made this astonishingly efficient. I spoke to an analyst looking at the carbon emissions of groceries in Europe, and he told me the biggest carbon emissions per kilo of food were usually in the “last mile.” What he meant was your leg of lamb’s trip from New Zealand in a super-efficient freighter probably emitted less carbon than the same leg’s share of the carbon emitted by your SUV as you drove from the grocery store.

Buying a foreign product shipped to a local store by truck might also be more carbon-efficient than a national product shipped by airfreight from a website in Eastern Canada. Choosing to go on vacation by airplane or buying a suburban house with a daily commute probably completely swamps the carbon-differential as you choose between Alberta and New Zealand meat.

Others worry about the low wages paid to workers in foreign countries. The entertaining economics show Planet Money looked at this question when they went to garment factories in Bangladesh. Wages and conditions were indeed unacceptable by Canadian standards, but the workers interviewed still preferred factory work to subsistence agriculture in the country. Do we agree with Montebourg that French people should not buy shirts from Bangladesh, potentially putting these Bangladesh workers out of a job?

We also worry about security. Where will we be if there is a global famine? Most Yukon families only have a week or two of food in their larders and would soon be reduced to eating whatever is in all those out-of-date sauce bottles that fill our fridges. Or what if we allowed our industrial base to wither away and there was another big war? What about saving Canadian jobs in industries shrinking under foreign competition? These aren’t easy questions to answer, since using border restrictions to protect entire industries can end up passing surprisingly large costs onto Canadian families.

Cost is a key question here, because globalization has enabled specialization and cost-efficiency that would astonish Adam Smith and the early economists who studied the gains from trade. Clothes and basic consumer goods are so cheap they are almost disposable. Most inhabitants of rich countries spend, by historical standards, just a fraction of their working days earning enough money to feed themselves. They have access to drugs and advanced electronic devices that wouldn’t be economic to develop for just the Canadian market.

The debate on globalization is sure to continue. But, tellingly, I suspect that few of the people who applauded Benjamin Carle’s experiment will throw out their foreign clothes, foods and gadgets.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. You can follow him on Channel 9’s Yukonomist show or Twitter

@hallidaykeith

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