Post-Terror Surprises

September 11, 2001, is still happening. But while it may be too soon to catalog the impact of all its ongoing aftershocks, it is not too soon to identify one widely expected consequence that has failed to materialize: the death of globalization. "The era of globalisation is over," wrote Prof. John Gray of the London School of Economics and Political Science, reflecting the views of many other commentators. Conventional wisdom argued that the terrorist attacks on the United States would drastically curb the flow of money, goods, and services across national borders. For critics, globalization’s status as a passing fad was foretold even earlier in the growing clout of the anti-globalization movement, the bursting of the dot-com bubble, economic crashes in emerging countries, heightened concern over social inequities and the environment, and looming recession. From this perspective, the collapse of the World Trade Center also symbolized the collapse of a worldview that was either intellectually flawed, rigged in favor of the rich and powerful, or both. September 11 was merely the last nail in globalization’s coffin.

Yet globalization is still here. Global trade and investment flows are rapidly recovering. World trade is projected to grow by nearly 8 percent in the second half of this year and by 10 percent in the first six months of next year. The U.S. economy, frail from debilitating preexisting conditions, proved surprisingly resilient to the massive destruction near Wall Street (though ironically less resilient to the malfeasance of CEOs and their accountants). The rest of the world’s main economies, while also fragile, did not go into a tailspin as many experts had feared. South Korea, Thailand, Mexico, and Russia — some of the countries that famously crashed in the 1990s — have recovered faster than anticipated; their economies are now even more integrated with the rest of the world.

The fiery denunciations of globalization, free trade, and the U.S. model of capitalism, while common and politically alluring, have yet to produce the wholesale policy reversals called for by critics. Instead, countries are scrambling either to join the World Trade Organization (WTO) or to become more active participants in it and are doing all they can to attract foreign investment. China has just become the world’s fourth largest trader after the European Union, the United States, and Japan. Despite the important upfront costs, difficult entry conditions, and political risks of joining the WTO, the Russian government is bent on gaining acceptance as soon as possible. Countries such as Jordan and Turkey are overcoming huge domestic obstacles to open their economies and societies and to become more integrated with the rest of the world, not less. Even Brazil’s left-wing presidential candidate Luiz Inácio da Silva (known as Lula) has stressed in his campaign that he recognizes the need to attract and retain foreign multinational corporations.

If anything, the aftermath of September 11 testifies both to globalization’s enduring strength and to its complex and multifaceted nature. What lies buried at the site of the World Trade Center is not globalization but its simplistic definition as greater international flows of capital or technology.

Consider the widely held view that globalization is merely shorthand for international trade and investment or what multinational corporations do. Thanks to al Qaeda, everyone knows that globalization goes well beyond the links that bind corporations, traders, financiers, and central bankers. It provides a conduit not only for ideas but also for processes of coordination and cooperation used by terrorists, politicians, religious leaders, antiglobalization activists, and bureaucrats alike. In fact, government agencies of all kinds are working together with counterparts across the globe more closely than ever. The terrorist attacks showed that political globalization is as powerful a phenomenon as the globalization of the economy.

For others, globalization represents merely a set of tools. As Harvard political scientist Stanley Hoffmann recently put it, "Globalization is in fact only a sum of techniques (audio and video cassettes, the Internet, instantaneous communications) that are at the disposal of states or private actors." Yet this antiseptic definition trivializes a complex process that allowed hitherto obscure politics in the Middle East and Central Asia to take a tragic toll in lower Manhattan and to reverberate around the globe. While relying on "a sum of techniques," globalization is in effect gradually reengineering and displacing the balance-of-power mechanisms that have served as the basis of international relations for the last four centuries. The aftermath of September 11 has, if anything, accelerated this process, as the United States has downplayed differences with on-again, off-again antagonists such as China and Russia to focus on fighting a shared global threat. Big-country realpolitik has not disappeared, and nation-states and governments will remain an important part of the international landscape, but in a very different way.

Thankfully, a more sobering, less naive understanding of globalization has begun to emerge. Critics who viewed it as just another passing expression of 1990s exuberance now recognize that some of its aspects are here to stay. Other detractors are even beginning to accept its potential to improve the human condition. Defenders, in turn, are now more cognizant that globalization is neither an unavoidable destiny nor an obvious solution and that for large swaths of humanity, the potential benefits of deeper and wider international integration are irrelevant given the misery and risks of their daily existence. All realize that human intervention is urgently needed to steer globalization away from a path where its costs overwhelm its benefits.

The 19th-century American satirist Ambrose Bierce once said that war was God’s way of teaching Americans geography. Terrorism and the many reactions it sparked have certainly taught the world much about globalization. Let’s just hope that we know what to do with what we have learned.