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Monthly Discussion

A Date for Globalization

The recent expansion of the European Union made headlines partly because it was a large number of countries entered the union at once. However, most of the new countries were small both in population and surface area. Consequently the pattern of the union’s rate-of-growth curve shows no kink or other deviation form the S-shaped natural-growth curve. Exhibit 3 shows how the surface area of the European Union has been evolving from its conception in the 1950s.

The Area of the European Union

Exhibit 3. The area of the European Union has evolved along a growth process that will become 90% completed by 2010.

The data points closely follow the S-shaped pattern, which argues for a natural growth process in competition. Today 80% completed the process reaches 90% (minimum threshold for completion) by 2010. Its nominal beginning—defined as the 1% level—falls on 1957 when the 6 countries (France, Germany, Belgium, Luxemburg, Netherlands, and Italy) first got together. Contrary to what many politicians like to claim, the desire for unifying Europe is not more than fifty years old.

But also its completion leaves little room for political talk. There are 404,041 square kilometers remaining before the ceiling of the S-curve is reached. The countries waiting to become members add up to much more. Bulgaria, Romania, and Hungary alone will contribute 439,693 square kilometers. With some “spillover” we may want to also accommodate Serbia, Albania, and the Former Yugoslavian Republic of Macedonia. But if we want to remain within the boundaries of a natural-growth process, we will have to leave Turkey out.

It is interesting to look for comparison on how other unions took place. There are two clear and well-documented examples, the United States and Switzerland. The former united 50 states over a period of 200 years, whereas the latter united 22 cantons in three hundred years. Being successful unification processes each one is a good candidate for an S-shaped formation. We will look at the evolution of surface areas rather than population size. The population of a union grows due to fertility as well as due to the unification process, and its final pattern is not a simple S-curve but the convolution of many S-curves.

Exhibit 4 shows an S-curve that is 95% completed by 1959 with the acquisitions of Alaska and Hawaii. The confederate states coming in and out of the union during the 1860s shows up as an “unnatural” deviation, which was ignored during the fitting procedure.

The Area of the United States

Exhibit 4. The formation process of the United States was 90% completed in 1940. The gray dots represent the secession “maneuver” clearly outside the limits of normalcy.

The other similar unification process concerns Switzerland, a much slower process of associating 22 cantons together to form a coherent and unified country. Exhibit 5 shows the evolution of the surface area of cantons “associated” with the union. The date of their association is considered here rather than the date of their admission as cantons. Swiss identity has been shaped over the centuries to be distinctly different from the three heavyweight cultural identities around it: French, German, and Italian. Most cantons were summarily admitted to the union during the early 19^th century. But what counts was their association with one-another during the previous centuries, which contributed to the emergence of the confederation and the shaping of the identity of its citizens.

The Area of Switzerland

Exhibit 5. The formation process of Switzerland was 90% completed sometime in the late 16^th century.

Once again an S-shaped natural curve describes well the formation process that stretches over several centuries. Its beginning is buried somewhere in the early years of the 2^nd millennium!

There is a progressive shortening of the growth process from Switzerland to the United States and the European Union. It resonates with a general shortening of life cycles and acceleration of the rate of change in our times. It is instructive to put all three curves on the same graph. To do that we normalize each growth process to a ceiling of 100% and then compare levels of penetration at a given time.

Exhibit 6 uses the logistic scale on the vertical axis so that S-curves show up as straight lines. The progressive steepness of the slopes is obvious. But what is surprising is that the three curves meet in the late 2030s.

The Meeting Point of 3 Unification Processes

Exhibit 6. The three formation processes are shown here simultaneously each normalized to 100%. The scale of the vertical axis is such that S-curves become depicted as straight lines. The three processes seem to meet in the late 2030s.

S-curves grow toward their ceiling asymptotically, that is, they approach it slowly and only reach it at infinity! However, the 99% level is generally considered as the nominal end of the curve. In Exhibit 6 we see that all three curves will reach this level practically simultaneously toward the end of the 2030s.

Each process represents unification. The 2030s will also see the peak of Kontradieff’s next cycle, and unification is endemic during such peaks. By most conservative estimates, Switzerland will have joined the European Union by then. Do these elements spell out a timeframe for Globalization, where the U.S. and the E.U. also join forces to face competition form the East?