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Nationalism vs. Globalism: Technology Overrules Politics

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  • (1:00) - Why Technology is Unstoppable and Changes Everything
  • (8:15) - What's Driving the Trends Toward Nationalism?
  • (15:00) - Generational Drivers of Globalization vs. Populist Movements
  • (21:35) - Bull Market Going Higher: What Stops It?
  • (32:00) - Nationalism Stops Globalization, Proving Earth Not So Flat
  • (38:25) - Software Eats FedEx While Semis Soar To New Highs
  • Podcast@Zacks.com

Welcome back to Mind Over Money. I'm Kevin Cook, your field guide and story teller for the fascinating arena of behavioral economics.

Today's special guest on the show is economist John Blank, who recently gave Zacks portfolio managers a presentation on the rise of nationalism around the globe and its impact on trade and economic growth. We discuss the trends from several angles, not least of which is my favorite saying "technology changes everything."

In fact, I've devoted several episodes to this one theme in particular: how technology changes the world and human behavior, but not human nature.

Whether it's the impact of smartphones or our difficulty in dealing with complexity and extremely large problems like climate change, our thirst for invention will keep creating handfuls of new problems for every one that we solve with technology.

Tailor, Tinker, Inventor, Musk

In the podcast, I tell a story from my post-college years where I was caught up in the anti-technology movement of the late 1980s and early 1990s. I was what they called a "radical-socialist-environmentalist."

But I eventually woke up from that Luddite nightmare because I kept reading and searching for answers in science, technology, ecology, business, and law. I say "eventually" because it wasn't certain I was going to make it through a critical 12-18 month window of confusion where I was reading books on both sides of the debates and ending up frustrated and unsure of anything.

Then I had an epiphany when it struck me that one thing was absolutely certain and would determine my response to everything that came after it: humans were natural inventors and we could never stop technological innovation because it's what we were born to do.

By extension, if you had to allow humans the freedom to create, you also had to favor capitalism and the right to "build and sell."

Sure you could try to regulate technology, but innovation would always find a way to create things that were going to be controversial, even extremely dangerous to large numbers of people. A decade before "WMD" because part of the global lexicon, I was learning that those nightmare missiles were part and parcel of our great unstoppable experiment with science and technology.

And so what we had to rely on more than regulation (primarily) to curb pollution, war, and mass poverty was people coming together from different nations and cultures to solve problems.

Yes, nations mostly build their wealth at the expense of one another and this competition and success fosters critical R&D in science and technology.

But what's become clear too is that while the free trade of goods has its limits (and arguments), there are legions of scientists and engineers around the world who see no borders to cooperation and the free exchange of ideas.

While Elon Musk has made the US his adopted home for Tesla (TSLA - Free Report) , his vision for the alternative energy company goes beyond globalist to what you could call planetary.

Speaking of our global race to the planets, in the podcast I also share one of the half-dozen books that awoke me from my Luddite stupor 25 years ago. I bet you will be surprised by the author, a former US Congressman who’s had his eyes on the stars since my youth when I adored the Space Shuttle and all things NASA.

Overcoming Tribalism With STEM

It is often said that music is a universal language, that could -- if they were willing -- unify different peoples across geographies and cultures.

But what we discovered in the 20th century is that math, science and engineering were the common languages of all humans that united us without regard for whether we agreed on religion, economics, or human rights.

And it remains true that human rights are granted by the nation you live in, such that citizens afforded such liberty, equality, and justice should never take them for granted.

Students from around the world are attracted to America's shores to extend their education and I'm not sure what appeals more -- the schools or the human rights, including political, economic, and religious freedoms.

If this competitive threat frightens some, they should take it as motivation to get our youth up to speed in a global economy that won't slow down for them. Until then, our companies need educated, talented and hungry young minds in STEM fields to maintain their competitive edge.

Besides that, these universal languages tend to bring youth together from all over the world, sharing their cultural and geographic histories nearly as much as their passion for learning and creating.

Most countries understand that jobs go overseas to cheaper labor sources and never come back. This was actually one of John Blank's big insights on the podcast where he spoke of "going down the chain, never up the chain" when I asked him about what I saw as a natural cycle of Apple (AAPL - Free Report) iPhones and Nike (NKE - Free Report) shoes being made in China because American consumers wanted cheaper goods and only the high-paying corporate jobs that went along with those items.

I posed the question to him on a day (December 18) when FedEx shares were down 10% because they said the global manufacturing economy had appeared to inexplicably slow and semiconductor equipment maker Applied Materials (AMAT - Free Report) was flirting with new highs.

That day I also wrote an article on (AMAT - Free Report) to explain why the shares were soaring despite earnings not recovering their 2018 peak. My thesis for several years has been that a Technology Super Cycle was propelling demand for advanced tools from innovators like NVIDIA (NVDA - Free Report) because Artificial Intelligence capabilities required a "re-boot" of Moore's Law with massively parallel architectures (MPA) and ever-evolving software stacks.

After you read/view my #TechSuperCycle thesis linked above, check out this video which explains what NVDA accomplished when they turned gaming chips into the beginnings of AI brains...

Get Your MPA in Deep Learning

If you're already familiar with MPA and deep learning/AI, you're probably on to studying the progress and future of quantum computing, especially after Google just took a big leap in computer science two months ago. From Tom Childers writing for LiveScience.com on October 24, 2019...

Using the company's state-of-the-art quantum computer, called Sycamore, Google has claimed "quantum supremacy" over the most powerful supercomputers in the world by solving a problem considered virtually impossible for normal machines.

The quantum computer completed the complex computation in 200 seconds. That same calculation would take even the most powerful supercomputers approximately 10,000 years to finish, the team of researchers, led by John Martinis, an experimental physicist at the University of California, Santa Barbara, wrote in their study published Wednesday (Oct. 23) in the journal Nature

While we don't hear much from NVIDIA's Jensen Huang about their R&D in quantum computing, they are big partners with IBM, who does talk a lot about it. So NVDA investors can rest assured that “the quantum” is top of mind for Jensen -- especially after the Google triumph.

Be sure to listen to the podcast and hear me dialog with Dr. Blank on the trends and challenges of "nationalism vs. globalism." I also touch on the behavioral roots of populism, but in the live podcast I forgot one of the handiest words that describes the phenomenon: tribalism.

I remain firmly in the camp that "technology changes everything" -- including national borders and tribalism -- and that youth, whether STEM-focused or Kardashian-focused, will bring the world closer together rather than farther apart.

Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he runs the Healthcare Innovators portfolio.