The death of distance?

Long-time favourite of this blog, Daniel Hannan MEP, likes to argue that globalisation is making membership of the EU unnecessary because distance is ceasing to matter.  When it comes to globalisation, the clue is in the name.  Why worry about a continent when you have got the whole world at your doorstep?

He puts it thus:

distance has ceased to matter. Capital surges around the globe at the touch of a button. The internet has brought the planet into a continuing real-time conversation. Geographical proximity has never mattered less.

A company in my constituency in south-east England will as easily do business with a firm in Dunedin, on the opposite side of the planet, as with one in Dunkirk, 25 miles away. More easily, indeed.

The New Zealand company, unlike the French one, will be English-speaking, will have similar accountancy practices and unwritten codes of business ethics. Should there be a dispute, it will be arbitrated in a manner familiar to both parties.

But the truth is different.  Globalisation, the breaking down of national barriers, is proceeding, but integration is taking place predominantly on a continental scale and not on a global scale.  Here is a chart (from the excellent book “World 3.0” by Pankaj Ghemawat) showing how the effect of national borders on trade has decreased (bottom chart) but the effect on trade of distance has increased (top chart).

distancesensitivity

Global companies, and many smaller ones, are organising on a European level.  The empire is not what it once was, and communications technology will not make it so again.

Similarly, English is becoming the world language, but people around the world are not learning it so that they can talk to the British but so that they can talk to each other.

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