The End of the World Is Just the Beginning: Mapping the Collapse of Globalization

Because of global trade, East Asia is the hub for manufacturing work. To obtain cheap labor, companies located facilities outside of major economies. The Asian system is highly complex: Japan, Taiwan, and Korea handle high-value add-on labor; Thailand and Malaysia fill a middle tier; and China dominates assembly and low-value add-on labor. China has an abundance of workers, many of whom are migrants from the interior living in poor conditions. The income variation in China is 10 to 1. The system works because ships can sail without risk.

In Europe, labor costs are not nearly as differentiated. As a result, products relying on low wages are not manufactured in Europe. Sweden, an exception, has partnered with lower-wage countries, such as Latvia, to excel in manufacturing. Primarily, Europe makes products with a narrow cost-input spread, such as aerospace items and machines that manufacture other things.

In North America, the US has geographic variation and its “manufacturing system has more variety than even Asia” (347). Among developing countries, Mexico has the world’s best demographic structure, ensuring consumers. The US has the best structure among developed countries. While the wage differential between the US and Mexico is 6 to 1, manufacturing is difficult in Mexico because of its geography. Nevertheless, the text concludes, the “Texas-Mexico axis boasts the technological sophistication of Japan, the wage variation of China, and the integration of Germany with its neighbors” (350).

Of the three major manufacturing areas, Asia is the least sustainable. Its members, such as China and Japan, do not get along. Birth rates are declining, and China’s two largest cities claim the lowest ones in the world. Fuel and materials are imported from the Persian Gulf and Southern Hemisphere, where transport insecurity is likely. Given the likely increase in transport costs, manufacturing would take place closer to end markets, or the US and Europe. No Asian country has a powerful enough navy to ensure safe transportation.

Europe has problems as well. While immigrants from central Europe have compensated for its declining birth rates, that is only a short-term fix. It cannot absorb its own products and therefore needs to export goods. As a result, it too would face security issues with transport. However, it imports materials from areas closer geographically, and certain parts of Europe, such as Sweden and the UK, might do well. Countries farther east, including Germany, would need to obtain goods from Russia and are in a less desirable situation.

North America is in the best position of the three areas. North Americans have access to markets, capital, and fuel, as well as military capabilities to protect transport. The Millennial generation provides a better demographic outlook than in Asia or Europe. If the US partners with Japan, South Korea, and the UK, the outlook is even brighter. The North American Free Trade Agreement (NAFTA) situates Mexico, Canada, and the US well, capable of developing a complex division of labor, and the text speculates that Colombia could become a low-cost manufacturing partner to Mexico.

Whether triggered by demographic collapse or American withdrawal, de-globalization would “break the supply links that make most China-centric manufacturing possible” (374). In the ensuing years, industrial plants would have common characteristics. Mass-production assembly lines would disappear, and less opportunity would exist for automation. The pace of technological improvements would slow. Production areas would be located in consumption areas, with shorter supply chains. Simplicity and security would trump cost and efficiency. The workforce would be more skilled, increasing inequalities. The only region able to self-fund industrial retooling is North America. Other geographic locations would face different impacts: For some, the price of access would increase, while others would have no access to industrialization at all.

The text reviews the manufacture of several products, such as automotive and heavy vehicles, to emphasize the advantages that North America has over Europe and Asia. The lumber industry is of environmental concern because people would burn wood for fuel if they lack access to fossil fuels. Semiconductor manufacturing would likely move to the US, resulting in higher prices. Advances in automation would deny countries that “have not yet begun the development process the opportunity to access what has typically proven to be the bottom rung of the process” (387).