Geoffery Crowther, editor of the Economist from 1938 to 1956, used to advise young journalist to ゛simplify, then exagerate゛. He might have changed his advice if he had lived to witness the current debate on globalisation. There is a lively discussion about whether it is good or bad. But everybody seems to agree that globalisation a fact accompli： that the world is flat, if you are a (Tom) Friedamante, or that the world is run by a handful of global corporations, if you are a (Naomi) Kleinian.
Pankaj Ghemawat of IESE Business School in Spain is one of the few who has kept his head on the subject. For more than a decade he has subjected the simplifier and exaggerators to a barrage of statistics. He has now set out his case - that we live in an era of semi-globalisation at most - in a single volume, ゛World 3.0゛, that should be read by anyone who wants to understand the most important economic development of our time.
Mr Ghemawat points out that many indicators of global integration are surprisingly low. Only 2% of students are at universities outside their home countries； and only 3% of people live outside their country of birth. Only 7% of rice is traded across borders. Only 7% of directors of S&P 500 companies are foreigners - and, according to a study a few years ago, less than 1% of all American companies have any foreign operations. Exports are equivalent to only 20% of global GDP. Some of the most vital arteries of globalisation are badly clugged： air travel is restricted by bilateral treaties and ocean shipping is dominated by cartels.
Far from ゛ripping through people's lives゛, as Arundhati Roy, an Indian writer, claims, globalisation is shaped by familiar things, such as distance and cultural ties. Mr Ghemawatt argues that two otherwise identical countries will engage in 42% more trade if they share a common language than if they not, 47% more if both belonging to a trade block, 114% more they have a common currency and 188% more if they have a common colonial past.
What about the ゛new economy゛ of free-flowing capital and borderless information? Here Mr Ghemawatt's figures are even more striking. Foreign direct investment (FDI) account for only 9% of all fixed investment. Less than 20% of venture capital is deployed outside the fund's home country. Only 20% of shares traded on stockmarkets are owned by foreign investors. Less than 20% of internet traffic crosses national borders.
And what about the direction rather than the extent of globalisation? Surely Mr Friedman (author of ゛The World is Flat゛) and company are right about where we are headed even if they exaggerate how far we have got? In fact, today's levels of emigration pale beside those of a century ago, when 14% of Irish-born people and 10% of native Norwegians had emigrated. Back then you did not need visas. Today the world spends $88 billion a year on processing travel documents and in a tenth of world's countries a passport costs more than a tenth of the average annual income.
That FDI fell from nearly $2 trillion in 2007 to $1 trillion in 2009 can be put down to the global financial crisis. But other trends suggest that globalisation is reversible. Nearly a quarter of North American and European companies shortened their supply chain in 2008 (the effect of Japan's disaster on its partsmakers will surely prompt further shortening). It takes three times as long to process a lorry-load of crossing the Canadian-American border as it did before September 11th 2001. Even the internet is succumbing to this pattern of regionalisation, as governments impose a patchwork of local restrictions on content.
Mr Ghemawat also explodes the myth that the world is being taken over by a handful of giant companies. The level of concentration in many vital industries has fallen dramatically since 1950 and remained roughly constant since 1980： 60 years ago two car companies account for half of the world's car production, compared with six companies today.
He also refutes the idea that globalisation mean homogenisation. The increasing uniformity of cities' skylines worldwide masks growing choice within them, to which even the most global of companies must adjust. McDonald's serves vegetarian burgers in India and spicy ones in Mexico, where Coca-Cola uses cane sugar rather than the corn syrup it uses in America. MTV, which went global on the assumption that ゛A-lop-bop-a-doop-bop-a-lop-bam-boom゛ meant the same in every language, now includes five calls to prayer a day in its Indonesian schedules.
(後略)
