SAN FRANCISCO -- The end of globalization, G-Zero, Balkanization, fragmentation and the end of the Internet are all ways of describing the end of a half-century of much of the world becoming increasingly integrated. That integration process was central to the peace and prosperity of the 70 years since WWII. More and more open trade regimes, high speed logistics, telecommunications -- especially the Internet -- cheaper airline services and a growing number of free movement of people all fed economic efficiency and growth. This was, of course, the second era of globalization. The first era at the end of the nineteenth and beginning of the twentieth centuries was ended by World War I.
A key to the post-WWII integration was the framework of institutions and agreements like the United Nations, the World Trade Organization, the International Monetary Fund, the World Bank, the International Telecommunication Union, the Organization for Security and Co-operation in Europe, the European Union and the North American Free Trade Agreement. But two forces are tearing this framework apart.
First, the United States under Ronald Reagan began to turn away from globalization, perceived by him and his followers as being increasingly threatening to U.S. sovereignty. The unwillingness of the U.S. Senate to ratify the Law of the Seas was perhaps one of the first U.S. steps away from the globalization. Since then we have turned down nearly every multilateral treaty, including ones we wrote ourselves such as the treaty to have another nations adopt our standards for disabled access.
The other force is the rise of new economic powers like China, India, Brazil and even Russia. In the view of the rising countries, the rules of the global system were shaped by the U.S. and Europe, the West, in their favor. Now those countries want to rewrite the rules in their favor.
THE GEO-DIGITAL WORLD ORDER
Among the most important battlefields is the one for control of the world's information networks, especially the Internet. The Internet was designed to facilitate the easy movement of information, and it has succeeded brilliantly. For anyone with access to it, the Internet makes available a vast amount of the world's knowledge. Money flashes all over the world in a globally integrated marketplace. The Internet has eliminated friction from almost every market and transaction.
The rapidly growing concerns about privacy, government spying and hacking, have set in motion a cascade that may be unstoppable, having created an alliance of both our friends and challengers.
The next battle will be fought in Busan, Korea in a few weeks at the meeting of the International Telecommunications Union, a body chartered to technically regulate the interconnection standards of telephone and telegraph networks and assign parking spots in Earth orbit for communications satellites. At that meeting the challenger countries will once again, as they tried to do last December in Dubai, try to wrest control from the multi-stakeholder coalition that has been governing the Internet under a contract with the U.S. government.
THE END OF THE WORLD AS WE KNOW IT
If they succeed, it very well may lead to the end of the world as we know it. There will be no Internet. There will be many nets: ChinaNet, Euronet, maybe Deutsche Net and France net and Brazil Net and Russia Net. It will resemble the world before the Internet with many private networks and a constant challenge of interconnection.
I remember carrying around all the devices I needed to use to connect to the early Internet because of a variety of technical standards. The Internet was created to take the friction out of digital communications, whether those borders were university boundaries or national borders. The digital borders will begin to rise and with it the cost of doing everything will begin to grow. The nations of the world will once again begin to diverge. Economies of scale will disappear.
A HIGH FRICTION FUTURE
As we disconnect, nationalism is likely to grow. We will be in a high friction world with the opportunities for conflict growing fast. It is a recipe for poverty and war. Just as Smoot-Hawley was a staggeringly self-destructive act that made the Great Depression much worse, so the fragmentation of the Internet driven by the desire for national control will accelerate the end of the second era of globalization.