Ukraine War: A Turning Point for Globalization?

on August 4, 2023
By Sarah Neumann


Globalization is a multifaceted phenomenon that refers to the increasing interconnectedness and integration of different regions and peoples across various dimensions, such as trade, investment, migration, culture, technology, and information. Globalization has been a dominant trend in the world economy since the end of the Second World War, but it has also faced many challenges and disruptions along the way.

The recent war in Ukraine is one of those disruptions that has profound implications for globalization and its future trajectory. The war has not only caused human suffering and economic damage in Ukraine and its neighboring countries, but also triggered wider geopolitical tensions and conflicts that have undermined global cooperation and trust. Moreover, the war has exposed the vulnerability and fragility of global supply chains that rely on foreign inputs, markets, and transport networks.

How will the war in Ukraine affect globalization in the medium to long run? Will it lead to a reversal or a reshaping of global integration? What are the consequences for development and cooperation? These are difficult questions to answer, as they depend on many factors and uncertainties. However, some possible scenarios can be sketched out based on current trends and evidence.

One scenario is that the war in Ukraine will accelerate de-globalization, or a decline in global integration. This scenario is based on the assumption that geopolitical risks will outweigh economic benefits as drivers of globalization. Under this scenario, countries will prioritize their national security interests over their trade interests, leading to a fragmentation of global markets along political lines. Trade barriers will increase as countries impose sanctions, tariffs, quotas, or other restrictions on their rivals or potential threats. Global supply chains will be disrupted or reconfigured to reduce dependence on foreign sources or markets. Countries will also seek to diversify their trade partners or develop their domestic capabilities to enhance their self-reliance.

This scenario would have negative consequences for development and cooperation. De-globalization would reduce global efficiency gains from specialization and comparative advantage. It would also reduce global welfare gains from lower prices, higher quality, and greater variety of goods and services. De-globalization would hurt developing countries more than developed countries, as they rely more on trade for their growth, employment, income, and poverty reduction. De-globalization would also undermine global institutions and norms that facilitate cooperation on common challenges such as climate change, public health, human rights, or peace.

Another scenario is that the war in Ukraine will reshape globalization rather than reverse it. This scenario is based on the assumption that economic benefits will still matter as drivers of globalization despite geopolitical risks. Under this scenario, countries will adapt to changing circumstances by adjusting their trade strategies and policies. Trade barriers will not increase significantly, but trade patterns will change as countries seek new opportunities or niches. Global supply chains will not be disrupted, but diversified or optimized to balance efficiency and security. Countries will also pursue regional or plurilateral integration agreements that are more flexible and inclusive than global ones.

This scenario would have mixed consequences for development and cooperation. Reshaping globalization would preserve some of the benefits of global integration, but also create some challenges and trade-offs. It would allow countries to exploit their comparative advantages and access new markets, but also expose them to more competition and volatility. It would enable countries to diversify their trade partners and sources, but also increase their complexity and coordination costs. It would foster regional or plurilateral cooperation on some issues, but also create fragmentation or exclusion on others.

The war in Ukraine has also revealed the vulnerability and complexity of global trade. The war in Ukraine has disrupted global supply chains and markets, especially for commodities such as food and energy. For example, Russia is one of the largest exporters of wheat and natural gas in the world, and its exports have been affected by Western sanctions and transport bottlenecks. This has created shortages and price spikes in some regions, such as Europe and Asia. Moreover, the war in Ukraine has increased global uncertainty and volatility, which have negative impacts on investment, consumption, and growth.

The war in Ukraine has also raised questions about the relationship between globalization and security. Liberalism is a theory of international relations that argues that globalization promotes peace and security by increasing interdependence, cooperation, and democracy among countries. However, this theory has been challenged by recent events that show that globalization can also create conflicts and threats. For example, Mark Galeotti argues in his book that globalization has enabled countries to use their economic, technological, or informational advantages as weapons against their rivals or adversaries. He calls this phenomenon “weaponized interdependence” and suggests that it leads to more frequent and protracted wars.

The war in Ukraine does not necessarily mean the end of globalization or the return of a Cold War scenario. Rather, it means that globalization is changing and evolving in response to new challenges and opportunities. Globalization is not a uniform or linear process, but a diverse and dynamic one that varies across different dimensions, regions, sectors, and actors. Some aspects of globalization may decline or stagnate, such as trade in goods or multilateral agreements. But other aspects of globalization may continue or increase, such as trade in services or digital flows. Moreover, some regions may pursue deeper integration or cooperation within their own blocs or groups, such as the European Union or the Regional Comprehensive Economic Partnership.

The war in Ukraine is a critical juncture for globalization, but its outcome and impact are not predetermined. They depend on how countries adapt to changing circumstances and what policies they adopt to manage their trade relations. The challenge for policymakers is to find ways to harness the benefits of globalization while minimizing its risks. This requires balancing efficiency and security, openness and sovereignty, cooperation and competition in a changing global environment.”

Sarah Neumann is a political scientist and freelance writer who specializes in international relations, security studies, and Middle East politics. She holds a PhD in Political Science from Humboldt University of Berlin, where she wrote her dissertation on the role of regional powers in the Syrian conflict. She is a regular contributor to various media outlets like Eurasia Review. She also teaches courses on international relations and Middle East politics at Humboldt University of Berlin and other academic institutions.

What Ever Happened to Globalization?

By Jeremy Brecher

September 28, 2024

Source: STRIKE!



Globalization has been the hallmark of the economic world in the late 20th and early 21st centuries. Since the Great Recession of 2008, however, globalization as we knew it has been changing fast. That change is an important part of what is being called the “polycrisis,” the convergence and mutual aggravation of geopolitical, economic, governance, climate, and other crises. This commentary examines the rise and fall of globalization as we knew it. The next commentary explores what is emerging from it. Both are part of a series on “The Polycrisis and the Global Green New Deal.”

Over the last four decades the world has undergone a transformation in the structure of the global economy — generally known as “globalization.” While there had been a global economy since 1492 or even before, this new globalization represented a profound change in the relations between national economies, national governments, and the world economy. Goods and money grew increasingly free to move anywhere around the world to make greater profits. Corporations went global. New global institutions enforced the unimpeded movement of capital. The ideology and political practice that has come to be known as “neoliberalism” beat down efforts by national governments and popular organizations to restrict this freedom. But since the Great Recession of 2008, the trend of globalization has been reversed. This Commentary examines why and how.
Globalization: The Backstory

Both neoliberal globalization and today’s retreat from it represent phases in the long history of the changing relations between markets and states. To grasp the rise and fall of globalization, it helps to put both in historical perspective.[1]

In medieval Europe, markets were extremely limited; most economic activity was controlled by feudal lords, whose peasants produced for them directly, or by guilds organized by craft. Within this system, markets, trade, and a class of capitalists gradually grew.

The emerging system of markets and capitalists had an ambiguous relation to the system of territorial states. Many capitalists traded internationally, but most also developed close ties with their “home” states, each providing support to the other. According to historical sociologist Michael Mann, by the time of the Industrial Revolution, “capitalism was already contained within a civilization of competing geopolitical states.” Each of the leading European states “approximated a self-contained economic network,” and economic interaction was largely confined within national boundaries – and each nations’ imperial dominions.[2] European states shaped trade, often aiding it by national policies, war, and empire. By the 20th century, Europe and its offshoots like the United States – what came to be known as “the West” — controlled most of the world.

A series of industrial revolutions, from the invention of machine production to today’s computer-based technologies, immensely increased human productive capacity. The increased production was and remains controlled primarily by capitalist corporations, which organized an ever-increasing proportion of the world’s economic activity. The size of these corporations grew exponentially. By the mid-20th century a small number of giant corporations, integrating all aspects of production from raw materials to the consumer, dominated major markets in each major country. A growing proportion of people became their employees.

The Great Depression of the 1930s represented a worldwide breakdown of this system, marked by decline of production and mass unemployment of human and material resources. Many nations began developing versions of “regulated capitalism,” in which the state assumed considerable responsibility for overall management of the national economy.

The general crisis also led to economic nationalism, intense international competition, national and inter-imperialist rivalry, and eventually World War II. As the war drew to a close, the victorious nations initiated the Bretton Woods system to establish a degree of international economic regulation to forestall trade wars and downward economic spirals. It instituted the International Monetary Fund to support fixed exchange rates among different national currencies and a World Bank to aid reconstruction and development. It established the General Agreement on Tariffs and Trade (GATT) to base world trade on the “Most Favored Nation” principle under which nations agreed to assure each other trade conditions as favorable as those they gave any other nation. The Bretton Woods system created international supports for regulated national economies in which countries would be able to forestall devastating recessions and depressions. National economies remained “coordinated and territorially contained,” at least in comparison to the impending era of globalization.[3]

Globalization and its Crisis

Regulated national capitalism and the Bretton Woods system contributed to an unprecedented period of sustained growth in the world capitalist economy from World War II to the early 1970s. The years from 1948 to 1973 saw global growth rates of nearly 5 percent per year. But in the early 1970s capitalism entered a worldwide crisis. Global economic growth fell to half its former rate and corporate profit rates plummeted.

This extended crisis was met by several related strategies on the part of governments and corporations that together constituted what came to be known as “globalization.” [4]


Capital mobility Companies expanded their “capital mobility”– their ability to move production and money around the world without impediment. This cut costs by moving production to locations where labor was cheapest and environmental and other regulations weakest.

Transnational networks Corporations restructured from vertical and horizontal integration within national economies to what economist Bennett Harrison described in 1994 as “the creation by managers of boundary-spanning networks of firms, linking together big and small companies operating in different industries, regions, and even countries.” The ultimate power and control remained concentrated with the largest institutions: “multinational corporations, key government agencies, big banks and fiduciaries, research hospitals, and the major universities with close ties to business.” Harrison described this “emerging paradigm of networked production” as “concentration of control combined with decentralization of production.”[5]

Neoliberalism International networked production was supported by a national and global policy framework that became known as “neoliberalism,” which aimed to dismantle barriers to international trade and direct all public policy to the goal of capital accumulation.

Together these practices have gone under the rubric of “globalization.”

Over the course of four decades globalization transformed the world economy. As one recent study put it, “State-centric territorial competition” has been “substantially displaced in significance” by an “economic globalization” which creates its own set of international structures through global networks.[6]

From the 1960s to 2007 trade growth as a proportion of global GDP nearly doubled, from less than 10% to nearly 20%. However, this global system produced a devastating crisis, generally known as the Great Recession. Since 2008 the same measure of global economic integration has dropped steadily – back to the level of 2000. In parallel, global cross-border bank lending fell from 60% of global GDP in 2008 to 37 percent by 2023.[7]

This apparent “de-globalization,” however, is far from reestablishing the “coordinated and territorially contained” economies of the pre-globalization era. In fact, world trade has continued to grow. What’s happening has appropriately been called “geoeconomic fragmentation.”[8]

Geoeconomic fragmentation is part and parcel of the polycrisis – both an effect and a cause. The growth of geopolitical conflict, preparation for war, and actual war are a driving force in geoeconomic fragmentation as nations, coalitions, and corporations vie for dominance in global networks. So is the rise of xenophobic nationalistic political movements espousing economic nationalist policies.[9] So is the response to the climate crisis, with global struggle to control networks of climate-protecting products and to displace the costs of climate protection onto others. At the same time, geoeconomic fragmentation and the economic warfare that accompanies it aggravates geopolitical conflict, nationalistic politics, and climate catastrophe.

[1] For a fuller though still compact review of this history see Jeremy Brecher and Tim Costello, Global Village or Global Pillage, 2nd Edition, July, 1999, Chapter 2: “The Era of Nation-Based Economies.” This account focuses on the capitalist West because most of the main forces shaping the global economy originated there. https://www.jeremybrecher.org/downloadable-books/globalvillage.pdf

[2] Michael Mann, The Sources of Social Power, 1986, Volume 1, p. 513. https://www.cambridge.org/core/books/sources-of-social-power/71430B753552703F801E9C6087E524D6

[3] Seth Schindler et. al., “The Second Cold War: US-China Competition for Centrality in Infrastructure, Digital, Production, and Finance Networks,” Taylor & Francis Online Geopolitics, Vol. 29, 2024, Issue 4, September 7, 2023. https://www.tandfonline.com/doi/full/10.1080/14650045.2023.2253432?src=

[4] See Brecher and Costello, Global Village or Global Pillage, Chapter 3: The Dynamics of Globalization,” Ibid. https://www.jeremybrecher.org/downloadable-books/globalvillage.pdf

[5] Bennett Harrison, Lean and Mean: The Changing Landscape of Corporate Power in the Age of Flexibility, New York: Basic Books, 1994; cited in Global Village or Global Pillage, 53-4. https://go.gale.com/ps/i.do?id=GALE%7CA17502440&sid=googleScholar&v=2.1&it=r&linkaccess=abs&issn=00197939&p=AONE&sw=w&userGroupName=anon%7E9e9c1b95&aty=open-web-entry

[6] Schindler et. al., Ibid. https://www.tandfonline.com/doi/full/10.1080/14650045.2023.2253432?src=

[7] Adam Tooze, “Chartbook 198: Globalization: The Shifting Patchwork,” February 27, 2023.


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Jeremy Brecher is a historian, author, and co-founder of the Labor Network for Sustainability. He has been active in peace, labor, environmental, and other social movements for more than half a century. Brecher is the author of more than a dozen books on labor and social movements, including Strike! and Global Village or Global Pillage and the winner of five regional Emmy awards for his documentary movie work.

THE REAL 'LIBERAL' AGENDA

Why Progressives Should Embrace Trade and Globalization

Progressive values shaped the postwar international economic system that has procured the benefits of globalization and trade. Will U.S. policymakers remember?

Article by Inu Manak, Author
May 30, 2024 

CFR

Bettmann / Contributor, Getty Images

In recent years, a growing bipartisan consensus against trade and globalization has put U.S. foreign economic policy into a tailspin and raised concerns over a retreat of U.S. leadership among our allies. The last two administrations have openly questioned the benefits of globalization and called for a rethink of the Washington Consensus. Through escalating trade wars, industrial policy, and hamstringing the World Trade Organization, and with it, the rules-based economic order, the United States has walked away from the very system it helped create. These actions are not only mistakes, but they go against the long-held progressive beliefs that undergirded U.S. efforts to remake the world trading system in the aftermath of World War II.

In fact, modern views on trade and globalization are a stark departure from core progressive values; mainly, that domestic and international prosperity are strongly linked, that trade institutions support the rule of law, and that globalization is an important tool for improving conditions for the world’s poorest. In an essay for the Cato Institute’s Defending Globalization project, we explore the contemporary discourse surrounding U.S. leadership in international trade and emphasize how progressive values informed and shaped the system that exists today. Importantly, the U.S. experience with the Great Depression and recognition of the costs of nationalism following World War II spurred a new approach rooted in the notions of shared prosperity, fairness, and creating opportunities for all to benefit.

In a 1934 speech requesting additional trade authority from Congress, President Franklin Delano Roosevelt expressed concern over the startling decline of world trade, which not only “meant idle hands, still machines, ships tied to their docks, despairing farm households, and hungry industrial families,” but in turn, “has made infinitely more difficult the planning for economic readjustment in which the Government is now engaged.” Roosevelt well understood the need for a vibrant international economy to help the United States prosper at home. He acknowledged that the United States should “sustain activities vital to national defense,” but that “equally clear is the fact that a full and permanent domestic recovery depends in part upon a revived and strengthened international trade and that American exports cannot be permanently increased without a corresponding increase in imports.”

While the United States faces a different economic situation today, the COVID-19 pandemic, geopolitical rivalry, and supply chain vulnerabilities have precipitated a change of heart on globalization. Despite ample evidence that globalization has served as an important driver of economic growth and poverty reduction worldwide, expanding global economic opportunity has not been a top priority for U.S. policymakers seeking to address these modern challenges. Instead, growing economic nationalism has obscured the merits of globalization and common-sense reforms that could help the Bretton Woods institutions keep up with a rapidly evolving world. Perhaps most importantly, in the rush to remake the world trading system yet again, many have lost sight of the core American principles that helped lift billions out of poverty, making the world richer and more equal in the process. Refocusing on the reality of our global links—that we rise and fall together, that a system that shields the weak from the most powerful is in all of our interests, and that economic openness provides a fair shot for anyone that wants to participate in the global economy—will go a long way in helping U.S. economic leadership get back on track.

Read the full essay, “The Progressive Case for Globalization.”

 

THE LIBERTARIAN VIEW

Globalization, Not Globalism: Free Trade Versus Destructive Statist Ideology – OpEd

 January 5, 2023  

By MISES

By Connor O’Keeffe*

After the 2008 financial crisis, calls rang out across establishment publications and the executive offices of Wall Street that we were witnessing the death of globalization. The calls grew louder and more numerous after Brexit, the election of Donald Trump, the pandemic, and Russia’s invasion of Ukraine. Yet the data appears to dispute this narrative. Global trade hit a record $28.5 trillion last year with projections to grow in 2023. The pace, however, is expected to slow. The reason for this is less a problem with globalization itself and more the historic setbacks that globalism has faced.

Before continuing, it is important to define some terms. Globalization occurs when societies around the world begin to interact and integrate economically and politically. The intercontinental trade experienced during the Age of Sail and via the Silk Road are early examples of globalization. Globalization really took off after World War II and received a recent boost with the widespread adoption of the internet. Importantly, globalization in common discourse includes both the voluntary economic activities between peoples of different nations and the involuntary geopolitical activities of governments.

In contrast, Ian Bremmer defines globalism as an ideology that calls for top-down trade liberalization and global integration backed by a unipolar power. Statists believe that market exchange between people is literally impossible without government; only when a group claims a legal monopoly on violence and then builds infrastructure, provides security, documents property titles, and serves as the final arbiter of disputes can a market come into existence. Globalism is the application of this perspective to international trade. Globalists believe that top-down global governance enforced and secured by a unipolar superpower enables globalization.

But, like statists on a more local scale, the globalist view is logically and historically flawed. Global trade was well underway before the first major attempt at global governance, the League of Nations, in 1919. The league’s stated aim was to ensure peace and justice for all nations of the world through collective security. Falling apart at the outset of World War II, it failed miserably. But globalism as an ideology found its footing after the war. Europe was devastated. This left the US and the USSR as the only two countries with the ability to exert power globally.

So began the fastest era of globalization in history. Trade exploded as people moved on from the war. The globalist project also got off the ground with the founding of the United Nations and the World Bank. Globalism was limited only by the ideological differences between the two superpowers. The USSR wanted to support revolutions while the US aimed for top-down trade liberalization—which drove the recent allies apart and plunged the world into the Cold War.

In the United States, the neoliberals and neoconservatives dominated the political mainstream through their shared mission to bring markets and democracy to the world at gunpoint and financed by US taxpayers. Fortunately for them, the rate at which their interventions at home and abroad were wrecking US society was slower than that of the Soviets. The abolition of prices and private property eventually led to the collapse of the USSR in the early 1990s. With its main adversary defeated, the United States had achieved one of the central tenets of globalism, unipolarity.\

From the outset, the US establishment gorged itself on its new globe-spanning influence. Through new international organizations like the World Trade Organization, “free trade” agreements were introduced. Some ran for hundreds of pages, yet all free trade really requires is an absence of policy. The United States sailed its navy around the world’s oceans promising to secure shipping lanes like a global highway patrolman. Through the promise of US military security and the bankrolling of international governance organizations, US taxpayers were forced to subsidize global trade.

As Murray Rothbard highlights in Man, Economy, and State with Power and Market, there is no such thing as international trade in a truly free market. Nations would still exist, but they would be pockets of culture instead of economic units. Any state restrictions on trade between people based on location are a violation of their liberty and a cost to society. Most free-market economists understand this and advocate against state restrictions accordingly. But subsidies to international trade are also antithetical to the free market. The proper free-market position is the complete absence of policy on both sides. No restrictions and no subsidies. Let people freely choose who they do business with. There should be no hand on either end of the scale.

Economic integration was far from the only focus of the US regime during its unipolar moment. Too many people had gained wealth, power, and status during the Cold War as part of the US war-making class. Despite the USSR’s total collapse, the last thing the United States wanted to do was declare victory and give up its privileged position. Instead, the United States scrambled to find a new enemy to justify the continuation of those privileges. Their eyes settled on the Middle East where they would, in time, launch eight unessential wars that killed any notion of a “rules-based international order.” US unipolarity proved Albert Jay Nock correct; governments are only as peaceful as they are weak.

This institutional desire for war would sow the seeds of destruction for the United States’ unipolar moment. As the United States eviscerated any notion that it stood for a rules-based order through its adventurism in the Middle East, tension was brewing in Eastern Europe and East Asia. To the doubtless joy of weapons companies and foreign policy elites, the Russian and Chinese governments were transformed back into the United States’ enemies.

The Russian invasion of Ukraine in February was a huge win for the US war machine, but it also represented an enormous step backward for globalism. The Russians seceded from the global order the United States had led for three decades. The West’s reaction, grounded in strict sanctions and forced economic divestment, deepened the rift in the global system.

What the future holds is anyone’s guess, but the globalist dream of a singular system of global governance is surely wrecked for the near future as the Russo-Chinese bloc breaks away. There will be pain because so many connections between nations are controlled by governments; however, a significant degree of globalization is still valued by the world’s consumers. The data contradicts any idea that globalization is reversing. It is only slowing as governments attempt to drag consumers along on their quest to divest from the other side.

Despite the claims that globalization is dead, international trade is alive and well. But the drive toward an interconnected world is slowing down as the ideology of globalism experiences its biggest setback in decades. The statist conflation of unipolar global governance and international trade explains where these claims are coming from and why they are flawed.

*About the author: Connor O’Keeffe is a writer and video producer at the Mises Institute. He has a masters in economics and a bachelors in geology.

Source: This article was published by the MISES Institute

MISES

The Mises Institute, founded in 1982, teaches the scholarship of Austrian economics, freedom, and peace. The liberal intellectual tradition of Ludwig von Mises (1881-1973) and Murray N. Rothbard (1926-1995) guides us. Accordingly, the Mises Institute seeks a profound and radical shift in the intellectual climate: away from statism and toward a private property order. The Mises Institute encourages critical historical research, and stands against political correctness.

Getting deglobalization right

Joseph E. Stiglitz

June 03, 2022 


The World Economic Forum’s first meeting in more than two years was markedly different from the many previous Davos conferences that I have attended since 1995. It was not just that the bright snow and clear skies of January were replaced by bare ski slopes and a gloomy May drizzle. Rather, it was that a forum traditionally committed to championing globalization was primarily concerned with globalization’s failures: broken supply chains, food- and energy-price inflation, and an intellectual-property (IP) regime that left billions without COVID-19 vaccines just so that a few drug companies could earn billions in extra profits.

Among the proposed responses to these problems are to “reshore” or “friend-shore” production and to enact “industrial policies to increase country capacities to produce.” Gone are the days when everyone seemed to be working for a world without borders; suddenly, everyone recognizes that at least some national borders are key to economic development and security.

For one-time advocates of unfettered globalization, this volte face has resulted in cognitive dissonance, because the new suite of policy proposals implies that longstanding rules of the international trading system will be bent or broken. Unable to reconcile friend-shoring with the principle of free and non-discriminatory trade, most of the business and political leaders at Davos resorted to platitudes. There was little soul searching about how and why things have gone so wrong, or about the flawed, hyper-optimistic reasoning that prevailed during globalization’s heyday.

Of course, the problem is not just globalization. Our entire market economy has shown a lack of resilience. We essentially built cars without spare tires – knocking a few dollars off the price today while paying little mind to future exigencies. Just-in-time inventory systems were marvelous innovations as long as the economy faced only minor perturbations; but they were a disaster in the face of COVID-19 shutdowns, creating supply-shortage cascades (such as when a dearth of microchips led to a dearth of new cars).

As I warned in my 2006 book, Making Globalization Work, markets do a terrible job of “pricing” risk (for the same reason that they don’t price carbon dioxide emissions). Consider Germany, which chose to make its economy dependent on gas deliveries from Russia, an obviously unreliable trading partner. Now, it is facing consequences that were both predictable and predicted.

As Adam Smith recognized in the eighteenth century, capitalism is not a self-sustaining system, because there is a natural tendency toward monopoly. However, since US President Ronald Reagan and British Prime Minister Margaret Thatcher ushered in an era of “deregulation,” increasing market concentration has become the norm, and not just in high-profile sectors like e-commerce and social media. The disastrous shortage of baby formula in the United States this spring was itself the result of monopolization. After Abbott was forced to suspend production over safety concerns, Americans soon realized that just one company accounts for almost half of the US supply.

The political ramifications of globalization’s failures were also on full display at Davos this year. When Russia invaded Ukraine, the Kremlin was immediately and almost universally condemned. But three months later, emerging markets and developing countries (EMDCs) have adopted more ambiguous positions. Many point to America’s hypocrisy in demanding accountability for Russia’s aggression, even though it invaded Iraq under false pretenses in 2003.

EMDCs also emphasize the more recent history of vaccine nationalism by Europe and the US, which has been sustained through World Trade Organization IP provisions that were foisted on them 30 years ago. And it is EMDCs that are now bearing the brunt of higher food and energy prices. Combined with historical injustices, these recent developments have discredited Western advocacy of democracy and international rule of law.

To be sure, many countries that refuse to support America’s defense of democracy are not democratic anyway. But other countries are, and America’s standing to lead that fight has been undermined by its own failures – from systemic racism and the Trump administration’s flirtation with authoritarians to the Republican Party’s persistent attempts to suppress voting and divert attention from the January 6, 2021, insurrection at the US Capitol.

The best way forward for the US would be to show greater solidarity with EMDCs by helping them to manage the surging costs of food and energy. This could be done by reallocating rich countries’ special drawing rights (the International Monetary Fund’s reserve asset), and by supporting a strong COVID-19 IP waiver at the WTO.

Moreover, high food and energy prices are likely to cause debt crises in many poor countries, further compounding the tragic inequities of the pandemic. If the US and Europe want to show real global leadership, they will stop siding with the big banks and creditors that enticed countries to take on more debt than they could bear.

After four decades of championing globalization, it is clear that the Davos crowd mismanaged things. It promised prosperity for developed and developing countries alike. But while corporate giants in the Global North grew rich, processes that could have made everyone better off instead made enemies everywhere. “Trickle-down economics,” the claim that enriching the wealthy would automatically benefit all, was a swindle – an idea that had neither theory nor evidence behind it.

This year’s Davos meeting was a missed opportunity. It could have been an occasion for serious reflection on the decisions and policies that brought the world to where it is today. Now that globalization has peaked, we can only hope that we do better at managing its decline than we did at managing its rise.

Copyright: Project Syndicate


JOSEPH E. STIGLITZ is the winner of the 2001 Nobel Memorial Prize in Economic Sciences. His most recent book is Globalization and its Discontents Revisited: Anti-Globalization in the Era of Trump.

Does Germany need to rethink globalization?

Timothy Rooks Berlin

DW
22 hours ago

The current interconnected global economic system just isn't working, some economists say. They are calling for a recalculation of globalization, and what it means to be wealthy, independent, and secure.

As sand has gotten in the wheels of global markets, governments and businesses need to navigate what this means, according to Moritz Schularick

 MSC/dpa/picture alliance


Globalization has had a rough time lately. Worldwide, just-in-time supply chains suffered under stiff tariffs. COVID-19 shutdowns and travel restrictions caused further distress. Now, the war in Ukraine and sanctions on Russian companies are making matters even worse. Inflation and price increases have made energy and food more expensive. Ordinary customers, especially the poor, are suffering.

Is the world order falling apart? Is the status quo even worth saving? The world is changing, and our understanding of globalization must change, too, according to Moritz Schularick, president of Germany's Kiel Institute for the World Economy.

The focus of globalization can no longer be on squeezing the greatest possible profit from global value chains. It must also take into account "their reliability and their political implications," he wrote in a publication accompanying a discussion organized by the Federal Chancellor Helmut Schmidt Foundation (BKHS). "It will be a new world economic order compared to what we have been used to for the last 30 years, and it will challenge us."

In other words, while still enjoying many of the benefits of globalization, countries must avoid becoming too dependent on — or vulnerable to — trading with countries that are not close friends, something that Russia's war in Ukraine has shown a spotlight on.

For Moritz Schularick the main question is: How secure and independent do we want to be?

Michael Zapf/BKHS

Remaking globalization, from a German point of view

Germany, in particular, made three big bets that are not paying off as planned, says Schularick: continued growth through Chinese trade, cheap energy from Russia, and minimal defense spending under America's protective umbrella.

All three of these are coming back to haunt Europe's biggest economy now, he argues. Still, there is room for hope as Germany has great potential to improve in many areas. Importantly, it must look forward, not backward.

The lecture on December 4 at the Museum of Communication Berlin brought together a big audience to talk about the complicated issue. Schularick, who is also a professor of economics, led the discussion that focused on renewable energy, China, and closer European business integration.

Looking for solutions among problems

The time for cheap Russian gas is over. Germany and the rest of Europe must concentrate on building up renewable energy capabilities. In the meantime, new, non-Russian sources of energy must be secured to keep things running. Not only will this be better for the environment, as COP28 delegates in Dubai are currently discussing. Clean energy is also often local energy.

More complicated is Germany's relationship with China. Schularick encourages government officials to take a closer look at their foreign and security policies. They should be clearer about who are friends and who are not.

China poses a great challenge, not so much because it is so strong, but because its economy has weakened under a number of setbacks. This means fewer Chinese companies buying high-tech German exports. It also means China will likely turn to its own manufacturers as a way to grow and export its way to out of problems. This will make it a direct competitor to Germany, says Schularick. For German companies doing business in China "the fat years are over."

To counter this, Germany and the rest of the EU need to come together. This includes more digitalization, and strengthening the European Banking Union. The internal European market also needs to be liberalized and allowed to grow faster. It is a huge market, it just needs to be put to better use.

Reinventing globalization means talking about renewable energy, China and closer European integration

 Michael Zapf/BKHS

A to-do list closer to home

A single business, or even a whole branch of industry, can't make much headway alone. To make a real difference, businesses need to work with governments to plan for success, says Schularick.

This is a timely warning as many estimates about Germany's 2024 gross domestic product (GDP) growth come in at under 1%. But how can people be convinced about the need for radical change?

"I think we need a better network between academia and politics," Schularick told DW, "especially for these global issues." Precisely here he sees Berlin lagging behind locations like London, Paris, or Washington. Germany has many rules to avoid crisis, but is not prepared with crisis management skills to deal when a crisis actually arises, he says.

"We have to build up this intellectual infrastructure in Berlin, with think tanks, with media, with research and science, so that we can better anticipate what is happening in the world in the future."

Global security versus economic efficiency

This may seem a bit abstract. More concretely, a reorganization of globalization could mean having or bringing home some manufacturing production capacity to ensure supplies. It could also mean leaving behind some energy-intensive industries.

For companies, it means diversification in terms of where to produce and sell goods or services, while also securing sources of raw materials. These are all big changes that would upend decades of interdependence.

Still, Schularick is hopeful. Over the past two decades, globalization delivered on economic progress, and though it could have done better, many people enjoyed its benefits.

Yet, the world is not more peaceful or stable than 20 years ago. And it is this failure that needs rebalancing. In the future, there will have to be a tradeoff between efficiency and security. The question is: "What price are we willing to pay for less efficiency?"

Edited by Kristie Pladson

Will geopolitical tensions end globalization? 02:40


Timothy Rooks One of DW's business reporters, Timothy Rooks is based in Berlin.

RUSSIAN FASCIST PHILOSOPHER
Anti-Liberal Russian Philosopher Dugin: Russia Has Entered The Process Of 'Decoupling' From The West; 'Decoupling' Will Define The Essence Of Relations Between China And The West

August 13, 2024
Russia, China | Special Dispatch No. 11502

 
 
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Renowned anti-liberal Russian philosopher Alexander Dugin recently published an article in which he argues that Russia and China, along with countries from the so-called Global South, are moving toward "decoupling" from the West. "One might consider that 'decoupling' has been imposed on us by the West itself. But, more likely, we can see the secret workings of Providence in this. The example of the opening of the Olympic Games in Paris illustrates this clearly. The West banned Russia from participating in the Olympics. But instead of punishment, against the backdrop of that aesthetically monstrous parade of perverts and the pitiful scrambling of swimmers in waters filled with filth and toxic waste in the Seine, all this turned into something quite the opposite – an operation to save Russia from disgrace and humiliation," Dugin added.

(Source: Geopolitika.ru)

Following is Dugin's article:[1]

"'Decoupling' Means Something Directly Opposite To 'Globalization'"

"In the coming decades, the main and most frequently used concept will undoubtedly be the term 'decoupling.' The English word 'decoupling' literally means 'disconnection of a pair' and can refer to a wide range of phenomena – from physics to economics. In all cases, it refers to the breaking of the connection between two systems, especially when both depend on each other to a greater or lesser extent. There is no exact equivalent for translating this word into Russian, although размыкание (unfastening), расцепление (disengagement), and разрыв пары (pair disconnection) convey the meaning. However, it is preferable to retain the English term 'decoupling.'

"In a broad sense, at the level of global civilizational processes, 'decoupling' means something directly opposite to 'globalization.' The term 'globalization' is also English (of Latin origin). Globalization means the unification of all states and cultures according to rules and algorithms established in the West. 'To be global' means to be like the contemporary West, to accept its cultural values, its economic mechanisms, its technological solutions, its political institutions and protocols, its information systems, its aesthetic standards, and its ethical criteria as something universal, total – the only option – and obligatory. In practice, this means the 'coupling' of non-Western societies with the West and with each other, but always in such a way that Western rules and standards serve as the algorithm. Essentially, in such a unipolar globalization, there was a main center – the West – and all others. The West and the Rest, as S. Huntington put it. The Rest was supposed to connect to the West. This connection ensured integration into a single planetary global system, into the global 'Empire' of postmodernity with the metropolis located at the center of humanity, that is, in the West.

"Entering globalization, recognizing the legitimacy of supranational institutions – such as the WTO, WHO, IMF, World Bank, ICC, ECHR, and up to the world government, a prototype of which is the Trilateral Commission or the Davos Forum – was an act of system binding, expressed by the term 'coupling.' Between the collective West and any other country, culture, or civilization, a pair was formed, in which a certain hierarchy – leader/follower – was immediately established. The West played the role of master, the non-West the slave. Along this axis of 'coupling,' the entire system of world politics, economy, information, technology, industry, finance, and resources was formed. The West in this situation was the embodiment of the future – 'progress,' 'development,' 'evolution,' 'reforms,' while everyone else was supposed to connect to the West and follow it according to the logic of 'catch-up development.'"

"Globalization" Is A "Western-Centric Phenomenon"

"In the eyes of the globalists, the world was divided into three zones – the 'rich North' (essentially the West – the US and the EU, as well as Australia and Japan), the 'semi-peripheral countries' (primarily the fairly developed BRICS countries), and the 'poor South' (all others).

"China engaged in globalization in the early 1980s under Deng Xiaoping. Russia did so under much less favorable conditions in the early 1990s under Yeltsin. Gorbachev's reforms were also aimed at 'coupling' with the West ('a common European home'). Later, India actively joined this process. Each country 'coupled' with the West, which meant integrating into the globalization process.

"Globalization was and remains a fundamentally Western-centric phenomenon, and given that the US and globalist elites play the main role in it, it is quite logical to use English terms to describe it. Globalization was carried out through 'coupling,' and from there, everyone involved followed its rules and guidelines at all levels – both global and regional.

"The processes of globalization gained momentum starting from the late 1980s until they began to falter and stall in the 2000s. The most significant factor in this reversal of the globalization vector was Putin's policy, which initially aimed to integrate Russia into it (joining the WTO, etc.) but at the same time insisted on sovereignty, clearly contradicting the main directive of the globalists – moving towards de-sovereignization, de-nationalization, and the prospect of establishing a world government. Thus, Putin quickly distanced himself from the IMF and the World Bank, rightly noting that these institutions used 'coupling' in the interests of the West and often directly against Russia's interests."

"We Must Consistently And Fundamentally Reject The Universality Of Western Norms"

"Simultaneously, China, which derived maximum benefit from globalization by leveraging its involvement in the global economy, financial system, and especially the offshoring of industries relocated by the globalists from Western countries to Southeast Asia (where labor costs were significantly lower), also reached the limits of positive outcomes from this strategy. Moreover, China initially took care to maintain sovereignty in certain areas – rejecting Western-controlled liberal democracy (events in Tiananmen Square) and establishing full national control over the internet and the digital sphere. This became especially evident under Xi Jinping, who openly declared China's course not towards Western-centric globalism but towards its own model of world politics based on multipolarity.

"Putin also firmly established the course towards multipolarity, and other semi-peripheral countries, particularly the BRICS nations, increasingly leaned towards this model. Relations between Russia and the West especially deteriorated with the onset of the Special Military Operation (SMO) in Ukraine, after which the West rapidly began cutting ties with Moscow – at the economic level (sanctions), political level (an unprecedented wave of Russophobia), energy level (explosions of gas pipelines in the Baltic Sea), technological exchange level (bans on technology supplies to Russia), sports (a series of contrived disqualifications of Russian athletes and the ban on participation in the Olympics), and so on. In other words, in response to the SMO, that is, Putin's full declaration of Russia's sovereignty, the West initiated 'decoupling.'

"At this point, the term 'decoupling' acquires its full, profound meaning. It is not just a severance of ties; it is a new mode of operation for two systems, each of which is now supposed to be completely independent of the other. For the US and the EU, 'decoupling' appears to be a punishment for Russia's 'misbehavior,' that is, its forced detachment from development processes and tools. For Russia, on the contrary, this forced autarky, largely mitigated by maintaining and even developing contacts with non-Western countries, looks like the next decisive step towards restoring full geopolitical sovereignty, significantly undermined and almost completely lost from the late 1980s to the early 1990s. Who exactly initiated the 'decoupling,' that is, the cutting of Russia out of the Western-centric unipolar globalization structure, is now difficult to say definitively. Formally, Russia started the SMO, but covertly, the West actively pushed it towards this and provoked it through its Ukrainian proxy tools.

"In any case, the fact remains: Russia has entered the process of 'decoupling' from the West and its promoted globalism. And this is just the beginning. The inevitable stages are still ahead.

"First and foremost, we must consistently and fundamentally reject the universality of Western norms – in economics, politics, education, technology, culture, art, information, ethics, and so on. 'Decoupling' means not just a deterioration or even a severance of relations. It goes much deeper. It involves revisiting the basic civilizational attitudes formed in Russia long before the 20th century, in which the West was taken as a model, and its historical stages of development as an unquestionable template for all other peoples and civilizations, including our country. To some extent, the last two centuries of Romanov rule, the Soviet period (with a critique of capitalism), and especially the era of liberal reforms from the early 1990s to February 2022 were all Western-centric. For the last few centuries, Russia has been engaged in 'coupling,' not questioning the universality of the Western path of development. Yes, the communists believed that capitalism needed to be overcome, but only after it was built, based on the 'objective necessity' of changing formations. Even the prospects of world revolution were seen by Trotsky and Lenin as a process of 'coupling,' 'internationalism,' a linking with the West, albeit for the purpose of forming a single global proletariat and escalating its struggle. Under Stalin, the Soviet Union essentially became a separate state-civilization, but only by deviating from Marxist orthodoxy and relying on its own strengths and the unique creative genius of its people.

"When the energy and practices of Stalinism were exhausted, the Soviet Union once again moved toward the West along the logic of 'coupling' and predictably fell apart. The liberal reforms of the 1990s became a new leap towards 'coupling,' hence the Atlanticism and pro-Western stance of the elites of that era. Even under Putin in the early stage, Russia tried to maintain 'coupling' at all costs, until it came into direct contradiction with Putin's even firmer resolve to strengthen the state's sovereignty (which would have been practically impossible under continued globalization – both in theory and in practice)."

"By Cutting Us Off From It, The West Essentially Facilitates Our Recovery, Our Resurrection"

"Today, Russia is consciously, firmly, and irreversibly entering into 'decoupling.' Now it is clear why we agreed to use this term initially in its English version. 'Coupling' is integration with the West, recognizing its structures, values, and technologies as universal models, and the systemic dependence on it, as well as striving to be part of it, to catch up with it, to follow it – at worst, it involves replacing what the West has chosen to exclude us from. 'Decoupling,' on the contrary, means rejecting all these principles, relying not only on our own strengths but also on our own values, our own identity, our own history, our own spirit. Of course, we have yet to fully grasp the depth of this, as Westernization in Russia, the history of our 'coupling,' has lasted for several centuries. With varying success, the penetration of the West into our society has been continuous and intrusive. The West has long been not only outside but also inside us. Therefore, 'decoupling' will be very difficult. It includes complex operations to 'expel all Western influences from society.' Moreover, the depth of such cleansing is much more serious than even the criticism of the bourgeois system during the Soviet era. At that time, it was about two competing lines of development within a single (by default Western!) civilization – capitalist and socialist, but the second – socialist – model was also built on the criteria of Western society's development, on Western teachings and theories, on Western methods of calculation and assessment, on the Western scale of development levels, and so on. Liberals and communists are united in the understanding that there can be only one civilization, and they also agree that this is Western civilization – its cycles, its formations, its phases of development.

"A century before, Russian Slavophiles went much further and called for a systemic revision, a rejection of Westernization, and a turn to their own Russian roots. In essence, this was the start of our 'decoupling.' It is unfortunate that this trend, which was quite popular in Russia in the 19th and early 20th centuries, did not prevail. Now we simply must complete what the Slavophiles, followed by the Russian Eurasianists, started. We need to overcome the West's claim to universality, globalism, and uniqueness.

"One might consider that 'decoupling' has been imposed on us by the West itself. But, more likely, we can see the secret workings of Providence in this. The example of the opening of the Olympic Games in Paris illustrates this clearly. The West banned Russia from participating in the Olympics. But instead of punishment, against the backdrop of that aesthetically monstrous parade of perverts and the pitiful scrambling of swimmers in waters filled with filth and toxic waste in the Seine, all this turned into something quite the opposite – an operation to save Russia from disgrace and humiliation. The images of 'decoupling' in sports vividly illustrate its healing nature. By cutting us off from it, the West essentially facilitates our recovery, our resurrection. Not allowed into the center of degeneration and shameless sin, Russia finds itself at a distance, at a remove. We recognize this today as Providence. So it is."

"We Are Not Alone On The Path Of Decoupling"

"If we now look at the rest of the world, we will immediately notice that we are not alone on the path of 'decoupling.' All those peoples and civilizations inclined towards a multipolar world architecture are entering the same process.

"Recently, in a conversation with a major Chinese oligarch and investor, I heard reflections on 'decoupling' from him personally. With full confidence, my interlocutor stated that the 'decoupling' of China from the United States is inevitable – and has already begun. The only issue is that the West wants to conduct it on terms favorable to itself, while China aims for the opposite, i.e., its own benefit. Until the last moment, China had successfully extracted positive results from globalization, but now this requires a revision and reliance on its own model, which China inextricably links with the success of integrating Greater Eurasia (in conjunction with Russia) and implementing the 'One Belt, One Road' project. According to the influential Chinese interlocutor, it is precisely 'decoupling' that will define the essence of relations between China and the West in the coming decades.

"India is also increasingly and firmly choosing multipolarity. While a complete 'decoupling' from the West is not yet being discussed, Prime Minister Narendra Modi recently openly declared a course towards the 'decolonization of the Indian mind.' This means that in this giant country, a state-civilization (Bharat), at least in the realm of ideas (which is paramount!), the course is set for intellectual 'decoupling.' Western forms of thought, philosophy, and culture are no longer accepted by the Indians of the new era as unconditional models. Especially since the memories of the horrors of colonization and subjugation by the British are still alive. After all, colonization was also a form of 'coupling,' i.e., 'modernization' and 'Westernization' (hence it was supported by Marx).

"It is evident that a full-fledged 'decoupling' is also occurring in the Islamic world. Against the Western proxy in the Middle East – Israel – Palestinians and Shiite Muslims in the region are currently waging a real war. The stark contrast between contemporary Western values and norms and those of Islamic religion and culture has long been a leitmotif of the anti-Western policies of Islamic societies. The disgraceful parade of perverts at the opening of the Olympics in Paris only added fuel to the fire. Notably, the most severe reaction to the blasphemous portrayal of Christ came from the authorities of Islamic Iran. Islam is clearly oriented towards 'decoupling,' and this is irreversible."

"As We Detach From The Global West, We Face The Need To Restore, Revive, And Reaffirm Our Own Values"

"In certain sectors, these same processes are emerging in other civilizations as well – in the new wave of decolonization of African peoples and the policies of many Latin American countries. The more they are drawn into the processes of multipolarity and the closer they get to the BRICS bloc, the more acute the issue of 'decoupling' becomes within these societies.

"Finally, we can observe that the desire to retreat within one's borders is increasingly becoming manifest in the West itself. Right-wing populists in Europe and Trump supporters in the United States are openly advocating for 'Fortress Europe' and 'Fortress America,' that is, for 'decoupling' from non-Western societies – against immigration flows, the dilution of identity, and de-sovereignization. Even under Biden, a committed globalist and staunch supporter of maintaining unipolarity, we see some unequivocal moves towards protectionist measures. The West is starting to close itself off, embarking on the path of 'decoupling.'

"Thus, we began with the assertion that the word 'decoupling' will be key for the coming decades. This is evident, but few yet realize how deep this process is and what intellectual, philosophical, political, organizational, social, and cultural efforts it will require from all humanity – our societies, countries, and peoples. As we detach from the Global West, we face the need to restore, revive, and reaffirm our own values, traditions, cultures, principles, beliefs, customs, and foundations. So far, we are only taking the first steps in this direction."

 

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[1] Geopolitika.ru/en/article/decoupling?utm_referrer=https%3a%2f%2fwww.geopolitika.ru%2fen%3futm_referrer%3dhttps%253a%252f%252fwww.google.com%252f, August 9, 2024.