TEXT Alexander Tropé Stenhagen, Bachelor’s degree in political science
Globalization has defined our modern world, but how does trade with authoritarian states impact the world, and what can the history of trade teach us today?
50 years ago, a plane that would change the world flew over Asia. On board were leading American diplomats on a mission; a mission to open up the largest and most historic of nations. Henry Kissinger, as the national security adviser to President Nixon, was about to be the first American diplomat for decades to land in China. This event in many ways laid the groundwork for the modern world and, most important for this article, how democracies and free nations relate economically to the totalitarian and autocratic states of the world.
China in 1971 was a very different country compared to what we see today. Mao was still in charge and the cultural revolution was terrorizing the country’s populace. The Americans were not naïve of the nature of Mao’s regime, but saw two fundamental goals. To split China from the communist world and open the country for trading opportunities.
“Supply chains are making it possible for a poor Norwegian to eat fruit from Mexico while reading this article on a phone assembled in China. ”
The history of trade is as long as the history of mankind itself. Trade circulated across Eurasia, even 2000 years ago, along the silk road and transported valuable and rare goods across thousands of miles. Europeans discovered America in an attempt to find a more effective route to the invaluable spice islands of the east indies. Great works of engineering was created at Suez and Panama to connect seas together by the way of canals. The Atlantic slave trade created a triangle of human misery by kidnapping millions of Africans into slavery to work on sugar plantations for the European palate. The historical difference between our present trade and the historical trading relations are the type of goods being traded. Most trade has historically been for luxury goods of different kinds, but we have since the industrial revolution begun trading everything imaginable.
The total value of trade has in constant value increased 50-fold since 1913 and our current trade involves the whole world more directly than ever before. Over the last decades, globalization has become a catch all world for the modern interconnectedness of the world economy and societies. Globalization has fundamentally occurred over the last hundreds of years, with goods and resources being traded across the world. The difference today is that these supply chains are making it possible for a poor Norwegian to eat fruit from Mexico while reading this article on a phone assembled in China.
Trade has over the centuries been argued not only to be economically, but also diplomatically, beneficial. In 1909, Norman Angell wrote “the great illusion”, where he argued that the world’s trade had made war not only devastating but no longer a viable option for Europe’s modern states. They were according to him so totally reliant on each other for trade that their economies would collapse after a couple of months. The world would less than a decade later see the most industrialised and horrific war until that time and the world Angell wrote from would never exist again. He might have been wrong about the wars that started in his lifetime, but his argument about the interdependency of the world has had lasting impacts.
Trade has also always been a political question. British politics and parties were in the 1840s destroyed by their intense battles over laws regarding trade of corn. The fascist states of the 20th century sought in nationalist fervour to achieve total self-reliance or autarky to strengthen the nation against capitalist decadence. The EU was after WW2 created to bind the states of Europe closer and forever prevent war across the continent so scarred by decades of war. The increase in trade between nations have also made it possible for nations to use trade as a means of diplomacy or to coerce other nations. America has since the 1960s blockaded Communist Cuba to prevent the island nation from trading with the world freely and making it a threat to American security. There are also today many people who argue that the west should sanction multiple nations and groups for their human rights violations.
The fact of the matter is that the world is changing, and trade is binding everyone closer together. South African Apartheid was defeated by the ANC aided by a world willing to sanction and punish the regime. The costs were large, but the regime fell in less than a decade. The global economy was hurt by the imposition of sanctions, but the relative costs were low compared to the economic and political damage to Apartheid-era South Africa. The story of South Africa gives an optimistic vision of what peaceful pressure can lead to, but this view needs to be revaluated for our present world. The first fact is that South Africa’s rate of growth increased during the last half of the 1980s and in many ways strengthened the Apartheid regime’s status among the white population by creating a foreign enemy. The other question is about the suffering that the poorest in society suffer while their nation is sanctioned.
“The increase in trade between nations have also made it possible for nations to use trade as a means of diplomacy or to coerce other nations.”
Globalization has the capacity to not only create economic growth through efficiency, but to lighten or abolishing poverty across the world. This means that limiting trade to a nation might not hurt the regime much but create massive suffering for the weakest in society. China has by opening up their trade relations since the 70s achieved with a change of economic policies the miracle of lifting hundreds of millions of people out of poverty. “Made in China” does not only mean cheap goods for the rest of the world but industrial and economic growth in China that often benefits the poorest. China’s use of Uighur forced labour, or in other words slave labour, in their production of cotton has highlighted the fact that Chinese economic reforms don’t mean the same as political reforms. The Chinese government still keeps to the authoritarian policies that led to the deaths of millions during the great leap forward and to the massacring of students at Tiananmen square in 1989. Trade with most like continue growing over the decades and authoritarian regimes will also likely increase their share of global trade and production. That means the problems charted out here will not recede into the background but make themselves relevant time and time again.