Is the “second great age of globalization” about to end?
This comes by way of New Deal Democrat who was doing some research and ran across a not so recent Krugman article via the late Economist’s View blog. Krugman’s prescient words of things to come?
Hat tip to New Deal democrat and a thank you for sending this to me.
“The Great Illusion” Paul Krugman, Commentary, NY Times
So far, the international economic consequences of the war in the Caucasus have been fairly minor, despite Georgia’s role as a major corridor for oil shipments. But as I was reading the latest bad news, I found myself wondering whether this war is an omen — a sign that the second great age of globalization may share the fate of the first.
If you’re wondering what I’m talking about, . . . our great-great grandfathers lived, as we do, in a world of large-scale international trade and investment . . . Writing in 1919 . . . John Maynard Keynes described the world economy … on the eve of World War I. “The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth … he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world.”
And Keynes’s Londoner “regarded this state of affairs as normal… The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion . . . appeared to exercise almost no influence at all on . . . internationalization . . . which was nearly complete in practice.”
But then came three decades of war, revolution, political instability, depression and more war. By the end of World War II, the world was fragmented economically as well as politically. And it took a couple of generations to put it back together.
So, can things fall apart again? Yes, they can.
Consider . . . the current food crisis. For years we were told that self-sufficiency was … outmoded…, that it was safe to rely on world markets for food supplies. But when the prices of wheat, rice and corn soared, Keynes’s “projects and politics” of “restrictions and exclusion” made a comeback: many governments rushed to protect domestic consumers by banning or limiting exports, leaving food-importing countries in dire straits.
And now comes “militarism and imperialism.” . . . [T]he war in Georgia … mark[s] the end of the Pax Americana — the era in which the United States more or less maintained a monopoly on the use of military force. And that raises some real questions about the future of globalization.
Most obviously, Europe’s dependence on Russian energy, especially natural gas, now looks very dangerous . . . After all, Russia has already used gas as a weapon…
And if Russia is willing and able to use force to assert control over its self-declared sphere of influence, won’t others do the same? Just think about the global economic disruption that would follow if China . . . were to forcibly assert its claim to Taiwan.
Some analysts tell us not to worry: global economic integration itself protects us against war, . . . successful trading economies won’t risk their prosperity by engaging in military adventurism. But this, too, raises unpleasant historical memories.
Shortly before World War I another British author, Norman Angell, published . . . “The Great Illusion,” in which he argued that war had become obsolete, that in the modern industrial era even military victors lose far more than they gain. He was right — but wars kept happening anyway. …
Most of us have proceeded on the belief that . . . we can count on world trade continuing to flow freely simply because it’s so profitable. But that’s not a safe assumption.
Angell was right to describe the belief that conquest pays as a great illusion. But the belief that economic rationality always prevents war is an equally great illusion. And today’s high degree of global economic interdependence, which can be sustained only if all major governments act sensibly, is more fragile than we imagine.
Both NDd and I wonder if Prof. Krugman remembers this commentary from 2008.
Irony is the gift that keeps on giving :<)
Globalization Is Over. The Global Culture Wars Have Begun.
NY Times – David Brooks – April 8
While all true, then what I find most ironic is how the harmonic resonance of globalization forces completely ignored the future implications on large scale trade of both climate change and peak oil, which is doubly ironic given the bidirectional contradictions of those threats to globalization.
Someone should write a book – oh, wait…
https://www.publishersweekly.com/978-0-446-54954-7
$20 Per Gallon: How the Inevitable Rising Cost of Gasoline Will Change Our Lives for the Better
Christopher Steiner, Author . Grand Central $24.99 (275p) ISBN 978-0-446-54954-7
According to Steiner, senior staff reporter at Forbes magazine, surging fuel prices will transform Americans’ daily lives almost beyond recognition. With traditional energy sources disappearing and global demand soaring, the U.S. will confront gas prices rocketing to $6, $8, $14 and beyond—prices that will compel sweeping changes in everything from urban planning to food production. He reveals the consequences of each incremental hike in gas prices: at $8 per gallon, air travel will essentially vanish; at $14 a gallon, Wal-Mart stores will become empty “ghost boxes”; when gas hits $16 a gallon, sushi will become an extravagance only for the extremely wealthy. While many changes will come at tremendous social and economic cost, Steiner envisions a better future, where human ingenuity will spur greater efficiency and less waste. Although it’s unlikely all the author’s predictions will come true—he goes so far as to forecast the order in which airlines will go out of business—the surprising snapshots of the future (where rising gas prices might revitalize Detroit) make for vivid and compelling reading. (July)
No group has been in a bigger hurry to bury Malthus than the profiteers of globalized capitalism.
seems like the latest globalization isnt the first, or second, there are more than just than that
https://www.weforum.org/agenda/2019/01/how-globalization-4-0-fits-into-the-history-of-globalization/
A brief history of globalization
When Chinese e-commerce giant Alibaba in 2018 announced it had chosen the ancient city of Xi’an as the site for its new regional headquarters, the symbolic value wasn’t lost on the company: it had brought globalization to its ancient birthplace, the start of the old Silk Road. It named its new offices aptly: “Silk Road Headquarters”. The city where globalization had started more than 2,000 years ago would also have a stake in globalization’s future.
Alibaba shouldn’t be alone in looking back. As we are entering a new, digital-driven era of globalization – we call it “Globalization 4.0” – it is worthwhile that we do the same. When did globalization start? What were its major phases? And where is it headed tomorrow?…
Between the unCivil War and the Great Depression, then globalization was broad and generalized much as now with resources going from where supply exceeded demand to where higher demand than supply was worth the higher price and manufactured goods going to where they commanded higher prices than their labor and plant could obtain among the producers. The glaring problem was ultimately that of international settlements in gold.
Earlier episodes were typically more specialized trade on the value of scarcity for luxury items such as tea and silk (at that time) along with gems and precious metals. Not all peoples had direct access to consumer commodities such as whale oil either, but ambergris was worth far more.
we have tried so many times, and it works for a whole, then it fails. and maybe it fails because of us humans? others (if there any) might have been able to make it work, but maybe not us. might also explain why we never will really get to global piece, and a global government. which you would think would solve the problem so many seem to think is just around the corner.
dw
we have an american government. do you see it solving any of the problems we have?
why would you expect a global government to do better?
do you think all those nations are fighting over “resources”?
why wouldn’t you think “the market” would adjust prices so everyone got the best possible deal?
Maybe the billionaires will tell us?
How Many Billionaires Are There, Anyway?
NY Times magazine – April 7
Is the “second great age of globalization” about to end?
How Many Billionaires Are There, Anyway?
NY Times magazine – April 7
(Anyway, they will let us know when ‘the second great age’ is over.)
NYT: Forbes thinks there are 735 of them in America. Another count finds 927. Whatever the answer, the mystery is revealing — and the number is growing rapidly.
” “is burying most of the basic assumptions that have underlain business thinking about the world for the past 40 years.” “
those underlying business assumptions have always been a lie…even if they were believed by the liars themselves. they were cover for predatory practices that ignored even “profit” in favor of “dominance” or power or just “winning.”
and no one who looks at our Congress should believe in “rationality” for ten seconds. or even in sanity if we expand our view to the leaders of great nations.
or consider the subjects of these nations and rulers. what rationality, if not exactly sanity, we see is confined to very local and short term responses needed to survive the the overall irrationality of “the system.”
the only thing we can say about globalism is that this time the failure of empire is likely to be global.
Could be growing pains, an iteration in our evolution.
At the risk of cliche`, especially those attributed to old guys with a reputation of not saying the things attributed to them: given that the no longer potentially toxic gasses we live in enveloping the only ball of rock we know of we can live on do not recognize the boundaries of “nation/states” nor the varying squabbles within or without, globally if we don’t stand united we won’t stand at all. Perhaps we’re entering a third age of globalization, one not so self-centered.
Perhaps …