Done With Deglobalization?

Date: 27‑11‑2022

Source: Project Syndicate Michael Spence

Michael Spence, a Nobel laureate in economics, is Professor of Economics Emeritus and a former dean of the Graduate School of Business at Stanford University. He is Senior Fellow at the Hoover Institution, Senior Advisor to General Atlantic, and Chairman of the firm’s Global Growth Institute. He serves on the Academic Committee at Luohan Academy, and chairs the Advisory Board of the Asia Global Institute. He was chairman of the independent Commission on Growth and Development, an international body that from 2006‑10 analyzed opportunities for global economic growth, and is the author of The Next Convergence: The Future of Economic Growth in a Multispeed World (Macmillan Publishers, 2012).

 The global economy’s dire and deteriorating prospects, together with the scale of the climate challenge, have apparently opened world leaders’ eyes to the risks that deglobalization poses. But it remains to be seen whether this realization will be followed by the action needed to reverse course.

HONG KONG – November was an extraordinary month. Global leaders gathered for four major meetings: the ASEAN meeting in Cambodia, the G20 summit in Indonesia, the Asia‑Pacific Economic Cooperation (APEC) forum in Thailand, and the United Nations Climate Change Conference (COP27) in Egypt. What was striking wasn’t the timing of the meetings, but rather the evidence they produced that the tide might be turning away from confrontation toward renewed cooperation in the international arena.

DEGLOBALISIERUNG BRAUCHT VIEL ZEIT

FURCHE-Kolumne 353, Wilfried Stadler

Als die Welt noch in Ordnung war, legte die EU-Kommission am 23. Februar dieses Jahres, einen Tag vor dem Überfall der russischen Armee auf die Ukraine, einen Richtlinienentwurf über die Sorgfaltspflichten von Unternehmen vor. Dessen wohldurchdachter Text ist vom Willen geprägt, durch soziale und ökologische Kontrolle der Lieferketten von in internationaler Arbeitsteilung erzeugten Produkten – so wörtlich – „eine Wirtschaft im Dienste der Menschen zu verwirklichen und den Rechtsrahmen für eine nachhaltige Unternehmensführung zu verbessern“. Jahrelange Vorarbeiten in Richtung einer Wettbewerbsordnung, die fair produzierende Unternehmen nicht weiter gegenüber Konkurrenten benachteiligt, die unter prekären Arbeits- und Umweltbedingungen produzieren (lassen), finden damit einen gewichtigen konzeptionellen Abschluss.

Who Is Winning the Trade War?

Date: 20‑01‑2022

Source: Project Syndicate by Pinelopi Koujianou Goldberg

Pinelopi Koujianou Goldberg, a former World Bank Group chief economist and editor‑in‑chief of the American Economic Review, is Professor of Economics at Yale University. 

As the Sino‑American trade war approaches its fourth year, there is ample evidence to show that both sides have been harmed by the tit‑for‑tat exchange of protectionist measures. But, far from spelling an end to globalization, the conflict may have laid the foundation for an even more robust world trading system.

NEW HAVEN – The United States‑China trade war started in 2018 and has never officially ended. So, which side has been “winning” it? Recent research offers an unambiguous answer: neither. US tariffs on Chinese goods led to higher import prices in the US in the affected product categories, and China’s retaliatory tariffs on US goods ended up hurting Chinese importers. Bilateral trade between the two countries has tanked. And because the US and China are the world’s two largest economies, many regard this development as a harbinger of the end of globalization.

The Coming Greater Depression of the 2020s

Date: 28‑04‑2020

Source: Project Syndicate by Nouriel Roubini

Nouriel Roubini, Professor of Economics at New York University’s Stern School of Business and Chairman of Roubini Macro Associates, was Senior Economist for International Affairs in the White House’s Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank. His website is NourielRoubini.com. 

While there is never a good time for a pandemic, the COVID‑19 crisis has arrived at a particularly bad moment for the global economy. The world has long been drifting into a perfect storm of financial, political, socioeconomic, and environmental risks, all of which are now growing even more acute.

NEW YORK – After the 2007‑09 financial crisis, the imbalances and risks pervading the global economy were exacerbated by policy mistakes. So, rather than address the structural problems that the financial collapse and ensuing recession revealed, governments mostly kicked the can down the road, creating major downside risks that made another crisis inevitable. And now that it has arrived, the risks are growing even more acute. Unfortunately, even if the Greater Recession leads to a lackluster U‑shaped recovery this year, an L‑shaped “Greater Depression” will follow later in this decade, owing to ten ominous and risky trends.

The first trend concerns deficits and their corollary risks: debts and defaults. The policy response to the COVID‑19 crisis entails a massive increase in fiscal deficits – on the order of 10% of GDP or more – at a time when public debt levels in many countries were already high, if not unsustainable.

Why this crisis is a turning point in history

Date: 27‑04‑2020

Source: The New Statesman BY JOHN GRAY

The era of peak globalisation is over. For those of us not on the front line, clearing the mind and thinking how to live in an altered world is the task at hand.

The deserted streets will fill again, and we will leave our screen‑lit burrows blinking with relief. But the world will be different from how we imagined it in what we thought were normal times. This is not a temporary rupture in an otherwise stable equilibrium: the crisis through which we are living is a turning point in history.

The era of peak globalisation is over. An economic system that relied on worldwide production and long supply chains is morphing into one that will be less interconnected. A way of life driven by unceasing mobility is shuddering to a stop. Our lives are going to be more physically constrained and more virtual than they were. A more fragmented world is coming into being that in some ways may be more resilient.

Brexit Provides Early Proof of Deglobalization’s Costs

Date: 17-10-2018
Source: The Wall Street Journal By Greg Ip

A study comparing Britain to peer economies finds its output is 2.1% below what it would be without Brexit

For outsiders, Brexit has the feel of a long-running soap opera: a mash-up of plot twists and tragic characters loaded with entertainment value but not much significance if you’re not British.

That complacency is a mistake. Never in the last 70 years has a major advanced economy left a free-trade area. Brexit is providing the first real-world evidence of the costs that come from undoing the intricate bonds of globalization.

It is of course an extreme case of deglobalization: The European Union’s single market for goods, services, capital and labor is much more integrated than other free trade zones. Yet many of the barriers that are bound to rise between Britain and its partners, such as on regulations, trade penalties and immigration, are similar to those cropping up in the wider world, such as between the U.S. and its partners.

Measuring the effect of Brexit is complicated by the fact it hasn’t happened yet. British and European leaders are meeting Wednesday in an effort to bridge differences on a post-Brexit deal. Without a deal, Britain could see tariff and nontariff barriers snap back to the maximum the World Trade Organization permits.

Deconstructing Deglobalization

Harold James

Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of the new book The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, and Making the European Monetary Union.

Sep 12, 2017 Harold James Project Syndicate

US President Donald Trump and his advisers’ fierce rhetoric on trade and immigration has led some to wonder if our current era of globalization is now at risk. If it is, an even more pertinent question is whether the end will be accompanied by violence.

PRINCETON – US President Donald Trump and his advisers’ fierce rhetoric on trade and immigration has led some to wonder if our current era of globalization is now at risk. If it is, an even more pertinent question is whether the end will be accompanied by violence.

Stock markets have become increasingly jittery, owing to recollections of past moments when international economic integration was thrown into reverse. New trade wars or military conflicts could conceivably unravel the complex commercial interrelationships that have delivered prosperity since World War II.

In previous episodes of deglobalization, catastrophic events such as World War I or the financial crash of 1929 disrupted the flows of commerce, finance, and people that had previously linked countries together. One result of these crises was that nationality and citizenship became the key components of political and social life.

Lessons from the Anti-Globalists

Joseph E. Stiglitz

Joseph E. Stiglitz, recipient of the Nobel Memorial Prize in Economic Sciences in 2001 and the John Bates Clark Medal in 1979, is University Professor at Columbia University, Co-Chair of the High-Level Expert Group on the Measurement of Economic Performance and Social Progress at the OECD, and Chief Economist of the Roosevelt Institute. A former senior vice president and chief economist of the World Bank and chair of the US president’s Council of Economic Advisers under Bill Clinton, in 2000 he founded the Initiative for Policy Dialogue, a think tank on international development based at Columbia University. His most recent book is The Euro: How a Common Currency Threatens the Future of Europe.

MAY 1, 2017 Project Syndicate

NEW YORK – The likely victory of Emmanuel Macron in the French presidential election has elicited a global sigh of relief. At least Europe is not going down the protectionist path that President Donald Trump is forcing the United States to take.

But advocates of globalization should keep the champagne on ice: protectionists and advocates of “illiberal democracy” are on the rise in many other countries. And the fact that an open bigot and habitual liar could get as many votes as Trump did in the US, and that the far-right Marine Le Pen will be in the run-off vote with Macron on May 7, should be deeply worrying.

Some assume that Trump’s poor management and obvious incompetence should be enough to dent enthusiasm for populist nostrums elsewhere. Likewise, the US Rust Belt voters who supported Trump will almost certainly be worse off in four years, and rational voters surely will understand this.

A Practical Agenda for Revolutionary Times

Ngaire Woods

Ngaire Woods is Dean of the Blavatnik School of Government and Director of the Global Economic Governance Program at the University of Oxford.

APR 21, 2017 Project Syndicate

OXFORD – As the world’s financial leaders gather for the International Monetary Fund and World Bank spring meetings, many working people around the world are demanding radical change, because they sense that their voices are not being heard. Those who are supposed to represent them should not ignore this anger and frustration any longer.

According to the 2017 Edelman Trust Barometer, the public’s confidence in the status quo has collapsed worldwide, owing to widely held concerns about globalization, innovation, immigration, the erosion of social values, and corruption. At the same time, the response from elites who regard themselves as the guardians of economic growth has sometimes made matters worse. If they think they can allay public concerns simply by explaining the benefits of the current global economic system and tweaking policies to compensate those left behind, they are in for a rude awakening.

China Needs a New Grand Strategy

 

Minxin Pei

Minxin Pei is Professor of Government at Claremont McKenna College and a non-resident senior fellow at the German Marshall Fund of the United States. He is the author of China’s Crony Capitalism.

FEB 9, 2017 Project Syndicate

CLAREMONT, CALIFORNIA – The Cold War ended in December 1991, when the Soviet Union disintegrated. The post-Cold War era ended in November 2016, when Donald Trump won the United States presidency.

It is impossible to predict all of what the Trump era will bring, not least because of Trump’s own capriciousness. But some consequences are already apparent. In just a couple of weeks, Trump’s presidency has upended the key assumptions underpinning China’s post-Cold War grand strategy.

The first assumption is ideological. The ostensible triumph of Western liberal democracy in 1989 imbued that system with a kind of dominance. It was therefore assumed to pose an existential threat to the Chinese Communist Party (CCP).

In the economic realm, China expected continued Western leadership on economic globalization. So China’s government developed close commercial relationships with the West – relationships that supported China’s economic growth and development, strengthening support for the CCP at home and bolstering the country’s influence abroad.