In his book, Why Your World is about to Get a Whole Lot Smaller, Jeff Rubin predicts that energy costs will take off when the recession ends, and this will reverse the globalization trend. I hope he’s right.

Rubin points out that although oil prices have declined, the drop never approached the prices of eight years ago, when oil was $20 a barrel. When demand revives we will find that there is no excess supply of cheap oil to keep prices down. Even if North America and Europe adopt conservation measures, the newly industrializing countries will keep demand, and thus price, high. As the price of oil increases, and environmental costs are factored into production, the cheap labour pools that have moved manufacturing to countries far from the consumer will find that transportation costs put them at a disadvantage.

In my view, this will be good not only for the environment but for quality of life in general. Globalization has been good for multi-national corporations and some individuals in developing countries but its overall value is open to question. If multi-nationals can no longer shift production around the world to areas where standards are lower, the countries that have lost good jobs with better decent conditions will get them back. Perhaps people can also go back to making decent money in industries that produce something other than fraudulent finacial services.

I know there are many arguments against this.

One, living standards will be lower if we have to pay more for the goods we produce. This may very well be true, but it’s past time that we start considering alternatives to an ever-expanding consumption-based economy. One need not be a Luddite to wish for an economy based on something other than encouraging people to be more than consumers spending their lives amassing the possessions that measure their value. And how can we expect developing countries to eschew harmful development if we don’t make changes ourselves? Paying more for the goods we buy will also help to reduce the income disparities that have increased in the past two decades, if the extra goes to paying a living wage.

Two, poorer countries that have begun to develop will fall back into increased poverty. This is also a concern, although it’s based on a debatable and self-serving theory. The numbers suggest that what really results from globalization is a widened gulf between rich and poor, although there may be a larger middle class or at least working class at survival level. But this is not always the case, and multi-nationals are not there to make significant long-term contribution to poorer countries. When demand for labour causes working conditions to improve, they will look for a cheaper place to start over. Local solutions can be longer-lasting and more appropriate to the country. We need better ways to prosperity than polluting industries or ones that produce cheap junk to ship around the world.

Three, reduced competition is bad. Up to a point I agree, but competition should take place within a framework of standards, not the current lean and mean work environment with its lack of environmental controls. The position that such things are tariff barriers needs to be shot down. They should be incorporated into international trade agreements, so that competition only takes place between countries which have agreed on a level playing field. The argument against this is that this means bureaucracy, to which I reply, yes it does. We need it. So we need people with integrity who will work to make human political and regulatory institutions work. Or resign ourselves to a world where life is nasty, short and brutish.

Rubin, Jeff, Why Your World is about to Get a Whole Lot Smaller. Random House Canada, 2009.