Since their beginning, humans have moved about the globe. “Out of Africa” is the phrase that epitomizes the origin and the outward movement of the final human species that survived, the homo sapiens. Even after farming and agriculture were invented, thus bonding humans to the land, they kept moving to new places out of economic necessity and opportunity. No matter, however, how strong our drive to move and relocate has been, just as strong is the desire to grow roots and thrive in a place we can call home.
Despite periodical waves of mass migration, for thousands of years most people spent their lives very close to home. This was mostly due to the way most economies were organized. Production was done in relatively small scale and thus it took small amounts of saving and, hence, capital to support it. In other words, capital raising and capital use were mostly local.
All this changed with the advent of capitalism. Mass production required significant investments in technology and, thus, capital. Not all capital could be found locally. The financial system had to grow to facilitate the movement of surplus capital to places where the returns were higher. The growth of colonialism made capital mobility more intense because it was also very profitable. Colonial countries, like Holland, England and France, used their surplus capital to fund investments in their colonies. Utilizing strong protectionist measures, colonial powers made sure these overseas investments were highly profitable. They also made sure that critical production technologies and facilities remained in the motherland. This latter tactic was crucial for keeping their working population content. As long there was enough demand for labor and handsome profits were repatriated to the motherland, everybody was happy.
And then all this changed again. And it changed in our lifetime (as long as we were born in the 1980s). First the UK and then the European Union joined the US in the liberalization of their financial systems and the movement of capital across the globe. The dissolution of the Soviet Union and most importantly the opening of China to foreign investment and business created new profitable opportunities for capital to pursue. In the ensuing decades it became possible for financial firms to amass capital from all corners of the world and redeploy it anywhere based on the promise of hefty returns. Not only savings (surplus capital) were competed away to the most profitable uses but so were factories and labor. As the new multinational economic order gathered steam, old industrial towns in the American Midwest, in England, France and elsewhere started to lose their factories, their economic vitality, and the institutions that made up their social fabric and identity.
We still live in a world in which rootedness is location- and people-specific. It gives us shared values, common culture and shared identity. These are not easily transferable from one place to another. And they take years to take roots in new locales. So bringing rootedness into the picture makes us realize that the terms of mobility for capital and labor are not equal. Labor mobility comes at a high price. Its price is the diminished communities it leaves behind and the struggle to grow roots to the new places. That’s why our desire to move with economic opportunities runs up against our desire for rootedness.
The mobility of capital clashes with rootedness in other ways as well. Capital is owned by firms and investors. Their interest is to get the highest returns in any place this is possible. That’s not, however, what serves the interests of rootedness. In an economic sense (as told by Giridharadas in Winners Take All) capital owners belong everywhere whereas working people belong somewhere. Corporations claim they consider their local communities as one of their stakeholders. But when investment in a community is to last as long as it secures acceptable returns, is the loyalty of capital to a community serious? If the interests of capital owners do not necessarily align with the interests of local communities, who is there to mediate the friction?
Next consider the divide between rural populations (mostly farmers and blue color workers) and urban and suburban populations (mostly educated professionals). The former, by the nature of their occupation or the limitations of their skills, are homebound and, hence, very much interested in the stability of their communities. In the cities and suburbs, educated professionals and cadres of workers have greater opportunities to share in the bounties of the global economy. No wonder, those who live in rural areas tend to be more nationalistic whereas city folk tend to be more cosmopolitan. Again, we have a divide between those whose interests are somewhere and those whose interests can be everywhere.
All these thoughts suggest that despite the tacit and widespread approval of capitalism, even in communist countries like China and Vietnam, there are aspects of it, most notably unfettered capital mobility, that are not easily compatible with our human longing for rootedness.
The mistake we often make in our evaluation and appreciation of a political, social or economic system is to judge it on the basis of some distinct advantage ignoring all the while its full implications as its various workings come into full gear. This is the case with economic globalization. It sounds great in textbooks and economic models that treat resources like capital and labor as if they were pieces on a chess board while failing to consider the reality of human nature and therefore the collateral costs.
This piece cannot end though without considering the salutary effects of globalization. Thanks to it, billions of people in previously undeveloped countries have been lifted out of poverty and misery. Nonetheless, the folks that have been displaced in the industrialized countries will continue to remind us that this human progress cannot be had at their cost; all the more, when the globalists are the last to pay a price. Reconciling the interests of the people of everywhere with the interests of the people of somewhere should be high in the global agenda.
* This piece on rootedness was inspired from reading a book review of The Future of Capitalism: Facing the New Anxieties, by Paul Collier.
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