A few vague thoughts towards predicting a new global geopolitics:

Globalisation has been the undeniable trend of the last half century.

As transportation and communication technologies have advanced, the world has got smaller. You can now get from London to Australia in a day where, two hundred years ago – at the height of the nation state – it would have taken several times that to travel from London to Edinburgh. A century ago, most goods in your local shop would have been local to your (more or less) immediate area – even with the expansion of 19th century Empires and the arrival in Europe of affordably-priced exotic fruits and out-of-season vegetables, delivered via early refrigerated ships. Now we have to go to specialist shops to get local produce – and local today often means little more than “from the same country”. As for the interconnectedness of the global economy, we have had the ultimate proof over the last year as recession has spread around the world.

Communities arise due to a combination of proximity and common interest – the latter more often than not following the former.

Up until the dawn of the steam age, most modern nation states were highly fragmented, with much autonomy among the further-flung regions. The steam train – and later, the telegraph – enabled more effective administration over longer distances, and so nation states became more coherent as entities.

The proximity of most peoples on Earth has, over the last half century – since the advent of the Jet engine and, more recently, the virtual proximity made possible by the internet – likewise become ever closer. The ability to administrate over far larger areas has similarly increased. Where two centuries ago – as the French national identity was beginning to solidify post-Revolution and under the auspices of Napoleon – it would have taken a week to travel from Paris to Marseilles, there is now nowhere on Earth that you cannot get to in a week, no matter your starting point. Two centuries ago it took six days to travel from London to Edinburgh; a century ago it took six hours; now you can get from London to New York in six hours.

At the same time, with the globalisation of the world economy, previously disparate communities – separated by many hundreds of miles as well as by language and culture – are now economically interconnected via the a combination of the complexities of global finance and the fact that their local shops are full of goods from other countries.

New technologies lead to new identities.

It is possible over the last few centuries to demonstrate that advances in travel and communication technologies have led to consolidation and centralisation of governance structures, as it has become ever easier to manage large areas from a central capital. At the same time, shared identities have arisen, as previously disparate communities (sometimes nominally already under the same administration, but usually for all practical purposes largely independent of each other) have suddenly found themselves in the same boat. Scottish and Cornish become British; Normans and Savoyards become French; Milanese and Sicilians become Italians. Old identities are retained, but the new proximity provided by innovative technologies allows a top-down governmental and bottom-up social coming together.

The EU was, at its birth, backward-looking – yet accidentally stumbled upon an idea far ahead of its time.

The EEC was formed in the 1950s not as a reaction to new technology, but as a means of preventing the violence that so often ensued from the clashing interests of nation states. It was the dawn of the jet age, the year (1957) that Sputnik’s launch heralded the even more advanced era of the space age – yet the advances in transportation and communication that the jet engine and satellite were in the process of bringing about were barely on the radar of the EU’s founding fathers.

Nonetheless, the coming together of the previously competing states of a continent to pursue shared interests was to be made far easier by these new technologies. In 1920, to travel from London to Athens took days. By 1960 it was a matter of hours. Europe had shrunk. The EEC was formed just on the cusp of this new shrinkage, and so was in an ideal position to capitalise on the possibilities that the new technologies provided.

Approaching the present.

With the arrival of the internet, the world has shrunk yet again – only this time only socially/culturally, as we can chat away to people of any nation from the comfort of our front rooms. But as long as the physical transportation of goods over the internet remains impossible, for physical commerce we remain reliant on 20th (and even 19th) century technologies.

This places a geographical limit on effective economic interaction – at least when it comes to the exchange of day-to-day goods. If it takes more than a few hours to transport your goods from A to B it’s usually more trouble than it’s worth, especially with rising fuel prices. Large organisations may be able to trade over far larger distances – using economies of scale to make sending a refrigerated container ship packed with New Zealand lamb halfway round the globe make financial sense – but for the small business (as most businesses are), local trade remains the most effective. The arrival of the railway and the aeroplane expanded the geographical limits of the small business’s economic potential, but we have yet to advance much beyond these limits, set now for more than half a century.

The geographical limitations of (economic) communities.

In practical terms, if a journey of more than a few hours is too long to be economically viable for small businesses, then the geographical limit of most small businesses is more or less continental. At the same time, the EU has done a good job of continuing the work of postwar reconstruction and improving Europe’s transportation and communications infrastructure, ensuring that the EU area is one of the most effectively interconnected on earth – rivalled only by the United States of America, which has the added advantage of a) having been a coherent nation state for 90 years before the EEC came into being, and b) working with a pretty much blank canvas.

But this is a minor issue – there is a far more compelling reason why socio-economic communities today still have geographical limits: time zones. It may well be possible to travel to the west coast of America in half a day, and to speak to someone in Los Angeles, Seattle or San Francisco at any time. But we still cannot get over the fact that there is an eight hour time difference between London and LA.

With office hours generally running from 9am to 6pm, we have a nine-hour window for normal economic activity. Working with a company on America’s east coast while based in London is feasible – the five-hour time difference allows a four-hour overlap, with the Americans starting work around 2pm London time – but working with a company based in Seattle presents problems, with only a one-hour shared office window. For effective working, you need to be able to communicate with colleagues pretty much all the time – losing more than about four hours every day from the nine hour working day will lead to growing inefficiencies. The technology exists to communicate with people on the other side of the world – but the fact remains that when you contact them, they may well be asleep.*

The continental United States is spread over four timezones. From the Atlantic to the Urals, Europe is also spread over four timezones. The same goes for Latin America. Africa is spread over five. Asia and Australasia are rather more spread out – yet if you take South East Asia through to eastern Australia, the time difference is only four hours again, yet covers Australia, Japan, the Phillippines, Indonesia, Thailand and most of China.

These are, geographically-speaking, all entirely practical economic units. Any small businessman on the east coast of America can easily trade with one on the west without needing anything much in the way of complicated planning. A shopkeeper in Portugal can phone a supplier in Turkey, and know he will be able to sort out his orders that same day – possibly even take delivery the same day, if he phones in the morning. But for someone in London to order a vital part from Japan, there remain serious practical difficulties – the nine-hour time difference compounded by a 12-hour flight time. By the time the Japanese supplier has got the message and sent the part, two days might well have passed – which in business terms can prove disastrous.

Today.

So now, by accident at least as much as design, Europe (or, at least, Western Europe) is, in terms of its infrastructure and and geography, about as coherent and sensible a socio-economic unit as most nation states were two centuries ago, before the arrival of the railways and telegraph – if not more so.

Having been working on coming together for longer than other parts of the world, the EU’s institutions, procedures and structures are further advanced. Yet they were not originally planned with the aim of taking advantage of new technologies – but of preventing the conflicts of earlier ages. The overriding feature of the way the EU currently works is the perennial clash between the institutional attempts to find compromises between conflicting national interests (the need for unanimity on substantial changes), and structural fluff designed to flatter the national egos (the hang-on of old school diplomacy that is the veto).

The big fear of the old developed (national) economies over the last decade has been the rise of the new economies of China, India and – to a lesser extent – Brazil. These nationally-focussed concerns have been passed on to the EU – the organisation’s member states have been trying to use the EU as a way of maintaining strength through numbers against the newcomers on the global scene. Technology has allowed for greater pooling of resources and more efficient ways of working, enabling the EU’s member states to maintain the hope that they can compete against the vast potential of India and China – a potential based largely upon those two countries’ huge populations and geographical areas, which on both counts rival those of continents.

Looking to a continental future?

Yet now there are signs of yet more new developments. In the last couple of weeks, two potentially hugely significant events took place – both of which took their inspiration from the European Union, and both of which recognise that continental-scale organisation (or, at least, organisation across several – but not more than four or five – timezones) is both desirable and practical.

First, in Latin America, the members of the Bolivarian Alliance for the Americas (ALBA) decided to adopt a single currency – the SUCRE – explicitly modelled upon the euro. (And before you dismiss ALBA as made up of piddlingly insignificant countries, let’s not forget that the EU started out with just six member states, all still recovering from a devastating war, and three of which were tiny. Let’s also not forget ALBA’s more significant neighbours, who will be watching developments with interest.)

This was swiftly followed by fresh moves by the Association of Southeast Asian Nations (ASEAN) to create a regional bloc – including an EU-style common market and, potentially, a euro-style single currency.

Yes, ASEAN can also be dismissed as being made up of a bunch of relative lightweights – its most significant members probably being Indonesia, Singapore and Thailand, hardly global major players. But this new move shows far greater ambition – having been proposed by Japan, backed by China, and potentially including Australia, New Zealand and even the United States down the line. Any economic bloc including China and Japan among its members is a force to be reckoned with.

A new age?

And so we may be on the cusp of a major shift in global geopolitics and the structuring of the global economy. If these two new continental blocs get off the ground, the EU will have continental competitors for the first time. And the member states of the EU, until now using the benefits of membership to give themselves an economic advantage on the world stage, will find it even harder to compete as individuals.

Of course, timezone practicalities as well as national egos could still prevent the ASEAN plan from ever coing to fruition, but even a smaller-scale version of an Asia-Pacific version of the European Union would herald a major shift in the way the world works.

The upshot? The EU could well be about to shift from being a nice idea to being an absolute necessity.

* Yes, larger organisations can work on a 24-hour basis – but most businesses are not larger organisations. And for an economic community to benefit the most people within it, its advantages must be accessible to everyone without having to stay up all night.