This post, originally published May 6, 2013, has been updated to consider recent events.
This past week's disclosure of the NSA's secret Prism program once again brings us to Alice and Wonderland and Lewis Carroll's famous line, '"The time has come the walrus said, to talk of many things" of shoes and ships and sealing wax, of cabbages and kings". Except now we have to add to Carroll's lines, of terrorist bombings, sovereignty, globalization and government data mining.
Words that no one would have thought are interlinked but have become terribly interconnected.
In the early 1990s, the halcyon days of globalization, a new world order made up of free trade and free movement of capital and ideas was born. This world of globalization was propelled further by the rapid growth of the Internet and social media.
But as globalization was breaking down borders between nations and moving hundreds of millions of people out of poverty it was challenging the primacy of countries to regulate their own economies, to protect their cultures, their histories, their rule of law and the illusions that makes one society different from another.
Strangely, the best example of this is France. The French have traditionally fought in trade negotiations to protect their cultural exceptionalism, their 'l'exception culturelle,' a fight at which they have been fairly successful. As an example, in France from 2005 and 2011, between 45% and 55% of the films shown were American imports, as compared to 60 to 90% in other European film markets.
Globalization is now defeating the excellent negotiation skills of the French. France's position has become not so different from the proverbial little Dutch boy trying to bloc the hole in the dike with his finger. In the approaching negotiations on the US/EU trade pact, France's traditional stand against so-called 'American cultural imperialism' could be dissolving into pure political window dressing, for the Internet has trumped sovereignty on this issue. Since one can screen and download anything on the net, it is practically impossible to protect one's culture in an open society such as Europe.
France's issues of exceptionalism and sovereignty versus cultural globalization, which from an American point of view had often looked ridiculous, could become a defining issue of our time. Ironically it is directly related to the Boston bombings and the new revelations about the NSA Prism program.
Under the WTO, the guiding rules of globalization, America can decide to legally prevent manufactured goods from coming in if we determine that they are being sold below the cost of production. We can raise duties on products and we can take countries to court over export subsidies. In a non-WTO area, the Federal Reserve can rule that foreign banks need additional capital requirements in order to limit bank risk within the United States.
What we don't do, because the concept of free speech is so sacrosanct within our culture, is protect our borders from internet solicitations originating from the International School of Bomb-Making.
Dani Rodrik of Harvard brilliantly explored the issue of national democracy and globalization in his recent book, The Globalization Paradox, where he asked the question, "How do we manage the tension between national democracy and global markets?" He goes on to state that we have three choices, "We can restrict democracy in the interest of minimizing international transaction costs, disregarding the economic and social whiplash that the global economy occasionally produces. We can limit globalization, in the hope of building democratic legitimacy at home. Or we can globalize democracy, at the cost of national sovereignty."
Professor Rodrik demonstrates later in the book that globalizing democracy in a world as varied as ours is very difficult, while restricting democracy to further the cause of globalization leads to the dictatorship of the market place. As a result, the only rational decision is to institute national and international restraints in order to channel the forces of globalization.
So, regarding the intention the French have continuously placed on restricting foreign influence on their culture possibly our reaction should change from, "Oh, those French, don't they realize they are being very 19th century," to something with a much deeper meaning. No matter how powerful globalization is, shouldn't a society have a right to protect itself from harmful foreign influence?
Congress has just spent an agonizing several weeks debating background checks for gun purchasers and whether such checks would violate the second amendment. Yet at the moment there is no law to stop foreigners who do not have second amendment protection from electronically sending bomb-making instructions into the United States and it now appears that the Prism program is also re-opened to debate.
One of the fundamental concepts of globalization and a fundamental concept of America's character is the free flow of information: The ability to be open and to be challenged by new ideas is what America is about.
China, limits the free flow of information and has total censorship of the internet. This censorship protects China from the solicitations by the international school of bomb making. But, that same total censorship that protects against bomb making also stymies Chinese society by thwarting creative destruction and the innovative ideas that flow from it.
We cannot follow the Chinese model for protection; it would destroy who we are as Americans. We can however take the advice of Dani Rodrik and realize that with the benefits of globalization there are also severe risks to the ability of a democracy to be both masters of its culture and of its economy. And to know that the most difficult challenge of a democracy in the age of globalization is to protects its citizens while protecting the rights of its citizens. To insure against those risks, America as a society, needs to redefine the idea of openness, not just in the traditional globalized trading terms or capital flows, but also in the area of free flow of international data.
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