By Linda Cameron
Retreating into global isolationism would be a lonely achievement. Imagine if each country limited trade to a confined geographic boundary or returned to cottage industries restricted to the local citizenry. It would be like producing, marketing and selling only to neighbors, friends and family. Such restrictive economic movements would culminate in large scale social unrest that would inevitably lead to a seismic financial collapse. Such a collapse would have social and economic repercussions greater than the magnitude of the Great Depression and the global recessions of 2002 and 2008. But global and multinational companies so far seem unfazed. Perhaps it’s because overall the economy has improved nationally and worldwide, despite lingering income inequality and human rights issues. And businesses are putting up a resistance to the political pressure of retreating to global separatism.
Global Demand Is More Organic Than Keynesian
At various points in history, there were economic embargos and trade protectionism. These were enforced militarily and with sanctions, tariffs, taxes and import/export fees. Economic sanctions are still imposed today for certain countries. At this time, these sanctions pose little threat to the worldwide sales and distribution of goods and services. The underlying principle of supply and demand remains, but underlying economic forces are mercurially more organic than Keynesian. As long as consumer demand is strong and the product or service highly rated, companies will find ways to deliver. New players making their global mark are companies such as Uber and Airbnb, whose founders were ordinary people and not starry eyed visionaries. Their simple and accidental business models inspired others of modest means and different backgrounds to supplement household incomes and even build a career through ridesharing and short-term residential leasing: a piece of residential property and/or a reliable motor vehicle, you’re good to go.
E-Commerce Is A Global Thread
E-commerce has either removed or shifted the geographical boundaries of global sales, marketing and distribution. While e-commerce has not eliminated the physical logistics of merchandise delivery, it has opened global opportunities for many businesses that might otherwise be at a local standstill. E-tailer Amazon and its Pacific rival, Alibaba, are examples of e-commerce startups that became virally global. Still another e-commerce example is Wayfair, a popular international home furnishings company headquartered in Boston, Mass. Established high tech blue chips such as IBM and Hewlett-Packard, which had brick-and mortar beginnings, gravitated to global e-commerce along with traditional non-tech corporations such as energy providers, manufacturers, on-site retailers and air and ground shippers. The explosion of online social media sites such as Snapchat, Instagram and Facebook have been instrumental in promoting global commerce for both traditional and internet-based companies. Unless a powerful force can totally usurp the worldwide web, dismantling the worldwide e-commerce grid would be a herculean feat.
Digital Currency, Anyone?
Why not? We have internet payment exchange and transfer services such as PayPal. Now, bitcoin is here. Major financial companies such as mutual fund giant Fidelity Investments is giving the bitcoin emergence serious consideration as a monetary medium and currency commodity. Unlike a money transfer service, where one sends and receives payments electronically through credit card or direct bank debit/deposit, bitcoin is virtual currency and legal tender. In the U.S., the IRS might tax your bitcoin holdings if it qualifies as earned or unearned income. But the main advantage of bitcoin is that it can be a payment alternative for those not wealthy enough to open a bank account, who don’t qualify for a credit or debit card, or who don’t want to take a risk on payday loans. It’s an e-monetary complement to e-commerce. Designed to be open-source and public, according to the bitcoin website, everyone is invited to share in its conveniences.
Geographical Borders Are Not Boundaries To Merchandise Shipments
Shipping and freight companies such as UPS and FedEx commission studies of domestic and international consumer trends for the purpose of developing logistical solutions for their customers. Although the Trump administration still plans to build a wall between the U.S. and Mexico, shipments to Mexico continue. On its global website, UPS declares, “You’re not about to let a little geography get in the way of serving your customers…” Now companies such as Amazon and Germany based DHL are deploying drones to deliver mail and packages. No longer just another toy for electronic hobbyists, drones now have a role in freight and e-commerce activities.