New Fault Lines in a Post-Globalized World
(Dan here,,,I think worth looking at in American Affairs)
By Marshall Auerback and Jan Ritch-Frel
November 20, 2020The economic damage of the coronavirus pandemic has upended the global economic system and, just as importantly, cast out the neoliberal orthodoxy that dominated the industrialized world for the past forty years. But Covid-19 has only accelerated a process that was already well underway, impacting trade negotiations between China, the United States, and the European Union and spreading throughout the world’s largest economies. Although many defenders of the old order lament this trend, it is as significant a shift as the dawn of the era of global trade that began with the birth of the World Trade Organization (WTO).
Economists, politicians, and pundits are often tempted to see new economic patterns through the lens of the past. Thus, we are likely to hear that we are returning to nineteenth-century mercantilism or that we will see a revival of 1970s-style stagflation. But this historical view misunderstands our present moment; the motives now are different, and so are the outcomes.
Instead, what we are experiencing is the realization by governments of developed countries that new technologies enable them to expand or initiate new and profitable production capacity closer to or within their own markets. The savings in transportation, packaging, and security costs that come with domestic production, along with benefits to regional neighbors and to domestic workforces, will increasingly enable developed nations to compete with the price of goods produced through the current internationalized trade system. American politicians from Donald Trump to Elizabeth Warren are increasingly joined by a chorus of European and Asian politicians who see the long-term political benefit of supporting this transition.
Hmm, pandemic as an accelerator for change; trade, supply chains, …; ’twill be a broad swath indeed, I suspect. We will see changes to our goofy-arsed healthcare system, to capitalism-market based economies, travel, museums, education, … Why because these were some of the weak links.
The customer goes online and chooses a face mask, bottle of wine, pair of pants, …, or …, from those items listed on the USPS Web Page and places an online order. Their order goes direct to the factory, winery, … making the item of choice where it is filled within minutes or less and dropped in the on-site USPS bin that is picked up several times a day. The USPS then delivers the order to the customer. The USPS could enhance its revenue stream by charging a very small fee for advertising on its Web Page.
Walmart foresaw the end of the old way of doing retail. Bezos foresaw the end of brick and mortar. Next step is maker/supplier direct to the customer w/o the warehouse.
Bezos is already doing this but is extorting his customers and sometimes stealing their business out from under them. He now owns Best Buy, if he wants it.
It is not, will not be, about socialism or capitalism; both were invented for another time. If the pandemic accelerated the change, then that is one benefit. Else, it might have taken a very painful century, or more.
Precariat? We are they. Great link, though https://www.weforum.org/agenda/2016/11/precariat-global-class-rise-of-populism/ How to distribute????
Drone warfare could be fought anywhere.
Self-sufficient economies are less likely to go to war.
Energy, sustainable, self-sufficient, would furhter accelerate the changes; enhance global stability.
For the developing world, energy poverty is the issue. Solve the elegy problem, build self-sufficient economies, — problems solved.
Yes, all of finance needs to be rethought. The idea of worth needs be brought forward.
Thanks for posting!
One big problem, rarely discussed, about globalization is that it makes it hard to do local innovation and problem solving. If you read Bunnie Huang’s blog, you’d know how hard it is for an inventor to create a new product. Huang has the advantage of speaking Mandarin, but even he ran into serious challenges. Amusingly, he produced a phrase book for ordering electronics parts e.g. how does one say 0.5 picofarad electrolytic capacitors 1000 to a roll for automatic insertion in Mandarin.
Large companies can hire the staff it takes and pay to send people to Shenzen or elsewhere to oversee production, but smaller firms are frozen out. Or rather, smaller US firms are frozen out. Where does innovation go when manufacturing is, at best, a foreign black box? Through the 19th and well into the 20th century, the US had a robust industrial policy. One can argue the benefits of cheap manufactured goods, but one of the costs is that it is harder to solve a local problem if one has to just hope for a globally produced solution.
Interestingly enough, an extended period of globalization has decidedly been entered and promises to be a vibrant development period for much of the world. Somehow these writers against globalization have failed to notice Asia and Africa, especially failed to notice the signing of the most comprehensive of any trade agreement ever just in these last few days. Possibly countries in the European Union or Euro Zone may turn inward in terms of trade, though a Germany or a Greece is right now intent on globalizing. The United Kingdom or United States might turn inward on trade, but globalization is occurring and looks only to become more profound.
Asia and Africa really do exist, and globalization is what is wanted on these continents.