Globalism, Larry Elliott writes, is on its last legs:
Globalisation as we have known it is coming to an end and that’s by no means unwelcome.
Hailed as the ultimate in human progress, a model based on loosening the controls on capital and the construction of global supply chains has spawned recurrent financial crises, fostered corrosive inequality and worsened the climate emergency. True, millions of people have been lifted out of poverty in the past 25 years, but most of them live in a country – China – that has kept the market at arm’s-length.
Throughout history there have been successive waves of globalisation followed by a backlash when the model over-reached itself. This is one of those occasions and all the ingredients are in place for a struggle between the defenders of the status quo and those who say that recent trends in politics, technology and the climate point to the need for a new world order focused more on local solutions, stronger nation states and a reformed international system. It’s quite a stretch to imagine that Trump has this in mind when he is bashing China, but the economic crisis of the 1930s – of which protectionism was one part – led eventually, albeit after the war, to reforms that made the world a sounder and safer place.
Whether we will get through this without a war is an open question:
The G7 – the US, Canada, Japan and the four biggest economies of Europe – no longer call all the shots at international summits. The independence of central banks is threatened. The US is unwilling to soak up all the world’s excess production and instead demands that countries such as Germany run down their trade surpluses. Europe’s drive for integration has stalled. Parties of the centre have been hollowed out, either because they failed to spot the weaknesses inherent in globalisation or were too timid to act if they did. The Washington consensus – that there was a one-size-fits-all solution to the problems of developing countries that involved privatisation, abandoning capital controls and budgetary rectitude – has fallen into disrepute. And Russia is not the busted flush it was supposed to be. The risk that the current iteration of globalisation could end in military conflict is much higher than generally acknowledged.
To prevent such an outcome, there needs to be change at all levels, starting with the local one. Even during its heyday, large chunks of economic activity remained untouched by globalisation and that segment is likely to grow as economies become more service-sector dominated. In addition, countries such as the US are already bringing production back within its borders – in part because of the high cost of transporting goods around the world, and in part because technological change – greater use of robots and artificial intelligence – has reduced the financial incentive to offshore.
When it comes to global politics and global warming, we're at the end of an age. What awaits us is unclear.
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8 comments:
"Globalisation as we have known it is coming to an end . . . "
John Ralston Saul said that 20 years ago.
Expect the powers that be not to go quietly into that good night, Owen.
Exactly, Toby. Ralston Saul is an extraordinarily perceptive man.
I don't, Lorne. That's why this moment is full of great possibility and great danger.
Lets hope so, but some thing in another 50 to 100 yrs. we'll have one global government. I think what they meant was one global corporation. Governments don't run the countries any more, its corporations who run the politicians and hence the government.
it makes no sense to me to ship fish caught in Norway, Iceland, Canada to China and then have it shipped back. Clean and package it here in your own country. It will save the environment. People don't seem to give much thought these days to the cost to the environment of shipping all this shit all over the place. Yes, ships can go from China to the west coast of North American in a few days and unload in a few hours, but for what. These ships bring bacteria and animals unknown to our environment. One documentary discussed how when ships take in water in asia, for ballast and discharge it in north American, they're causing problems. these ships also use the worse oil so there is more pollution.
have read some articles which suggest the best way to deal with Russia is to let it implode which some believe it will in the not so distant a future.
we may also see the rise of city states. some cities are so large, they're bigger than countries and may feel at some point they have nothing in common with the country they are in, that they want to set their own agenda, their own rules.
You look at the disaster which is currently the U.S.A. California has the 5th largest economy in the world. Does it really need the rest of the U.S.A. their economy is larger than G.B.'s. who ranks 6th.
The Americans have areas they refer to as fly over states. IF things get worse, they may decide they can do better on their own, because they're not getting anything much from Washington central. They may decide, in their poverty, they need a new way which will benefit more people.
Its going to be interesting.
It'll be interesting, e,a,f. And, if Elliott is right, the units will get smaller.
If everybody goes service-sector, who's going to make my stuff? We'll have to hold back a few of them to make the stuff-makers that make my stuff.
Good question, John. I suspect the stuff makers will still make stuff -- but in different places.
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