The first signs of isolationism?


Introduction
A recent survey[1], [2] shows an increasingly inward looking stance being adopted by the general public in the US, a trend that may give a glimpse of the direction in which globalization is, or is not, moving. Some of the findings of this survey of public attitudes (the survey was commission by the Council on Foreign Relations and included the views of both CFR members and the general public – I have only included the general public’s responses here – unless stated otherwise) may give us important pointers as to emerging post-recession attitudes in the US and potentially other developed countries that have been hit hard by the economic crisis.

Key Findings and Pointers
Interesting findings include:
1. Just 32% support the decision to increase troop levels in Afghanistan.
2. 49% feel that the US should let other countries get along on their own – that the US “should mind its own business internationally“. This figure is now at an all time 40 year high in this survey series.
3. Over 50% see China as a threat.
4. 41% feel that the US plays a less important role internationally than it did 10 years ago.
5. 44% now see China as the world’s leading economic power (up – materially from 30% in February 2008).
6. 85% feel that protecting US jobs should be a major foreign policy goal.
7. Only 40% feel that global climate change should be a top long-range priority.

And interestingly, if we look at a part of the survey answered by CFR members only, we see a dramatic shift in who the US’s most important allies should be. We see a material increase in the perceived importance of the emerged economies (most notably China, India, and Brazil) and a marked decrease in the perceived importance of relationships with the “old economies” (most notably the UK, France, EU and even Japan).

So what could all this mean?
Firstly, we will not be out of the woods when the long awaited economic recovery appears. Whilst the depth of the social pain inflicted as a result of the economic crisis will be an important influence on the shape of the new world, it will be by no means the only influence.

Events on the geo-political stage will spill over into the world of business strategy.

It is now clear that the eventual outcome of NATO’s (largely the US’s) efforts in Afghanistan will be a critical shaping event. Perceived failure will act as a potential cataylst for isolationism. This could turn out to be the last military act of the US as the world’s lone policeman. This leaves a dangerous vacuum that China, quite understandly when looking back at the experiences of the last three policemen (US, former Soviet Union and UK), may well be unwilling to assume.  It is difficult for us to conceive of a world without a policeman but it will be an entirely different place from world that we have become used to post collapse of the Soviet Union – and pre-recession.

Secondly, we need to think strongly what a divided world might mean for our businesses. With this survey indicating that 85% in the US feel that the protection of US jobs is a major priority for foreign policy, the spectre of protectionism is not that far away. So too is the possibility that the offshoring of jobs becomes, at the very least, socially unacceptable.

Thirdly, we have the issue of new relationships and dying relationships.  If business relationships follow political relationships, what does this mean for old economy businesses dependent upon relationships with suppliers and customers in the US?

Fourthly, we have an indication that if the going gets really tough, environmentalism may pay second fiddle to the protection of jobs.

So, in terms of the way of the world, nothing moves in straight lines.

References
[1] “U.S. Seen as Less Important, China as More Powerful: Overview,” The Pew Center, Dec. 2009.
[2] Lindsay, James. Isolationist Ripples Among Americans. Council on Foreign Relations. Dec.2009

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