Can globalization be saved? Today we know what globalization means for good and bad. The only thing that is sure is that it can’t be stopped. However recent developments in the world have certainly complicated things and there are a number of different forces also trying to prevent the free movement of people and goods around the world. Even though we know that development of trade is a key factor for development of our societies.
Some people do not care that the international order they want to tear down enabled the rapid post-1945 economic growth that liberated billions of developing-country citizens from poverty. All they see are massive, unbending institutions and intolerable inequalities in wealth and income, and they blame globalization.
The world is a very unequal place, and inequality within societies has widened considerably in recent decades. But this is not because of international trade or movements of people; after all, cross-border trade and migration have been happening for thousands of years.
A central aspect of globalization is the careful documentation of the knowledge and legal tools needed to combine the property rights of seemingly useless single assets (electronic parts, legal rights to production, and so on) into complex wholes (an iPhone), and appropriate the surplus value they generate. Clear and accessible ledgers that faithfully describe not only who controls what and where, but also the rules governing potential combinations – of, say, collateral, components, producers, entrepreneurs, and legal and property rights – are vital for the system to function.
The problem is that five billion people around the world are not documented in national ledgers in anything approaching an organized manner. Instead, their entrepreneurial talents and legal rights to assets are recorded in hundreds of scattered records and rules systems throughout their countries, making them internationally inaccessible.
Under these conditions, it is impossible for the majority of humanity to participate effectively in their national economies, much less the global one. Without any means of participating in the process of producing high-value combinations, people have no chance of seizing some of the surplus value created.
So it is a lack of consolidated, documented knowledge – not free trade – that is fueling inequality worldwide. But addressing this problem will not be easy.
Just determining how many people are left out took the Institute for Liberty and Democracy (ILD), two decades of fieldwork, conducted by more than 1,000 researchers in some 20 countries.
The main problem is legal lag. The lawyers and corporate elites who draft and enact the legislation and regulations that govern globalization are disconnected from those who are supposed to implement the policies at the local level. In other words, the legal chain is missing a few crucial links.
Experience in Japan, the United States, and Europe shows that a straightforward legal approach to ensuring equal rights and opportunities can take a century or more. But there is a faster way: treating the missing links as a break not in a legal chain, but in a knowledge chain.
ILD has knowledge about knowledge chains. ILD has spent 15 years adding millions of people to the globalized legal system, by bringing the knowledge contained in marginal ledgers into the legal mainstream – all without the help of computers. But nobody have decades more to spend on this process; we need to bring in billions more people, and fast. That will require automation.
Last year, ILD began, with pro bono support from Silicon Valley firms, to determine whether information technology, and specifically blockchain (the transparent, secure, and decentralized online ledger that underpins Bitcoin), could enable more of the world’s population to get in on globalization. The answer is a resounding yes.
By translating the language of the legal chain into a digital language – an achievement that required us to develop a set of 21 typologies – we have created a system that could locate and capture any ledger in the world and make it public. Moreover, we have been able to compress into 34 binary indicators the questions that computers have to ask captured ledgers to determine which provisions should be inserted in blockchain smart contracts between globalized firms and non-globalized collectives.
By translating the language of the legal chain into a digital language
Information technology has democratized so many elements of our lives. By democratizing the law, perhaps it can save globalization – and the international order.
Maybe we are about to invent tools that can give billions of people real access to everthing, creating new equality systems.
Today in international trade and the global supply chain through international standards, we have known and trusted Authorized Economic Operators (AEO). In the future and in similar ways we might be able to offer people an Authorized Economic Persons (AEP) status.
This is a slightly modified version of an article published by WEF.
You find the link to this very interesting (entire) article here: Globalization is in trouble. But help could be on the way from a surprising source