Vegetables grown at Hydroponic Farming Company on January 28, 2019 in Kearny, New Jersey. (Photo by Don EMMERT/AFP) (Photo credit should read DON EMMERT/AFP via Getty Images)AFP via Getty Images
Rana Foroohar’s new book Homecoming: The Path To Prosperity in a Post-Global World takes us from warehouses in South San Francisco to textile mills in North Carolina to data entrepreneurs in Taiwan.
What connects the people we meet along the way?
They all work to reconnect wealth with place. And that, according to Foroohar, is what we need to counter the power of both big governments and big corporations.
As an economics columnist for the Financial Times, Foroohar began to sense problems with globalization long before they emerged in recent years. Her book explains why these problems have arisen, but it’s not a roubinic thunder of threats, it’s a story about how the economy can work better, told by people who see localization as increasing resilience, contentment, and distribution of power.
I was beginning to think of it as sort of a sequel to Chris Miller’s Chip War – which uses a similar style to explain how globalization created the current fragile world of semiconductors. Foroohar takes us from understanding the impact of globalization on the present to imagining a different future.
Click here to listen to our talk on Top Traders Unplugged and read on for a taste of what we’ve covered.
Lots of calories… and lots of weirdness
The food in the US is weird.
For example, I used to drive from St. Louis, Missouri to visit clients in Jefferson City. The two-hour drive is pleasant – the road rolling through the heart of farmland. But despite being surrounded by farms, we always struggled to find fresh vegetables whenever we stopped for lunch. Another odd example: during the pandemic, supermarkets across the US were short of groceries even though an entire food-consuming industry – restaurants – was shut down.
Both examples are side effects of a system in which farms must be large-scale and focused to be profitable. Most industrial plants only grow corn or soybeans. Grocery delivery is hyper-specialized to cater to a specific end user and is therefore vulnerable. Foroohar explains how this system evolved, but what speaks is her profile of people working to change it.
There’s Matt Barnard, founder of vertical farming company Plenty, who says, “We build farms like IntelINTC makes chips.” They grow food in a huge warehouse in Compton, Los Angeles They claim they produce 350 times the yield per hectare of a conventional farm. Food is grown close to where it is consumed, drastically reducing the cost and pollution of transportation. Vertical farms can be literally anywhere, like LA or East London. The industry is still in its infancy and could be a big win – creating a variety of local sources for fresh, quality food.
The book also looks into the more distant future through the eyes of food scientist Molly Jahn. She leads a program at DARPA with the humble goal of creating a new global food system.
asks Jahn “Could the relatively unexplored universe of microbes, bacteria, and fungi produce nutrients in hours or days?” She thinks so. That doesn’t sound like an immediate threat to Shake ShackSHAK, but it’s easy to see applications for military and national emergencies. Also, a world where countries feel safe about their food sources will be much safer.
Better rebuild
Foroohar’s father owned a manufacturing company in Indiana, and her belief in the power of making things locally is palpable. Her view is not based solely on the benefits of creating jobs where they are needed, although that is a starting point. She also argues that successful manufacturing companies create self-reinforcing ecosystems of suppliers, service providers, and researchers. Together, the ecosystem leads to innovation. When manufacturing is outsourced, the system atrophies and innovation dwindles.
The US lost millions of manufacturing jobs because labor costs are so much lower in China, but additive manufacturing, also known as 3D printing, is changing the calculus. It’s becoming easier and cheaper to make almost anything locally. For example, look at how houses are already being “printed”. In the long term, it’s easy to imagine all types of businesses printing orders on the fly instead of shipping from somewhere else. De-globalization has many inflationary aspects, but additive manufacturing with the elimination of time and transportation costs offers a potential offset.
Wealth comes from data. Why give away?
If our goal is to reconnect wealth where it was created, changing the way data is paid for and distributed is critical. Why? Because nothing is more “local” than our personal data. And the collection and use of this data is a fundamental source for the creation of corporate wealth.
Our current situation resembles the balance of power between workers and owners before the unions. Unions allowed dispersed workers to receive more of the value their labor produced. Foroohar sees “data unions” as a logical extension – groups of people coming together to set rules and prices for access to their information.
Data and technology can also be used to make democracies more responsive and cohesive. She cites the example of Taiwan, which is less divided despite being bombarded with disinformation campaigns. This achievement is partly due to innovations introduced by its digital minister, Audrey Tang, a self-proclaimed “conservative anarchist.”
Tang did some cool stuff. She set up an online voting system, used by half the country, that allows people to weigh up whether the government should follow certain policies (like allowing UberUBER). You can also fact-check politicians in real-time. America’s vast array of local governments provides an ideal setting for experimenting with these ideas. Taiwan’s experience is that they create common ground and common values. The US is a centrist country where noise from the flanks drowns out what most people want. The similarities are there, we just need new ways to suppress the noise.
Tang’s ideas – and the multitude of others cataloged in Foroohar’s book – offer an exciting way forward.
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I teach at UC Berkeley and co-authored The Rise of Carry, the 2020 Globalization Book of the Year. My newsletter, The Ideas Lab: New Ways To Understand Global Markets, summarizes my interviews with global experts and my own research. I have been in investment management for 25 years, including 12 years as co-owner of Algert Coldiron Investors, a quantitative equity hedge fund.
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