‘Globalization was born from the marriage of Technology and Policy in the 80s. Technology required enhanced specialization, leading to the outsourcing of value chain stages to different countries depending upon their competencies and labor costs. Policy was supportive, fueled by an ideological shift to neo-liberalism embraced by the unlikely alliance of Neo-Victorianism and Cosmopolitanism.
Globalization enjoyed a wonderful life until its 30s. Nothing could stop its popularity. Having achieved stardom, it created significant global wealth over a record time by making everything cheap.
But then it was assailed on three fronts.
First came the backlash against import competition from low-wage countries in the mid-2010s. While carrying many benefits, global trade disproportionately impacted certain local communities subject to deindustrialization. Polarizing political trends led to Brexit and the 2018 tariff war with China.
Then came the pandemic and the notion that global supply chains were over-extended, over-optimized, and thus over-exposed to shocks. The idea of shortening them through reshoring initiatives appeared to rely on common sense and rapidly gained traction.
Finally, the energy crisis caused by the invasion of Ukraine reminded the world of the impact geopolitics can have on supply chains. The reshoring idea was refined to give rise to ‘friendshoring’ with national security concerns in the foreground.
Supported by an unbeatable narrative, powerful anti-globalization forces emerged from these three assaults. Not without a fight, true to its values until the very end, Globalization succumbed to them.
With its global peacemaking mission, its desire to promote democracy, its ‘one world’ optimism, and its touching cultural naivety, Globalization will be dearly missed. It leaves many memorable moments, including the signing of NAFTA in 1992, the establishment of the WTO in 1995, the birth of the euro in 1999, the global response to the GFC in 2008, and the 2015 Paris Agreement on Climate change.
For many, beyond today’s sadness, the heyday of Globalization triggers a warm feeling of nostalgia. Others remain in denial about its passing or senselessly hope for its quick resurrection.
Globalization is survived by its partner, Capitalism, and their twins, Nationalism and Protectionism. The future now lies in their children’s hands. One can only hope that they will not indiscriminately renege on their origins, however imperfect. With maturity, they may avert uncontrolled inflation and a damaging slowdown in global growth, innovation, and poverty reduction.
They might even succeed in making the most out of deglobalization and its underlying decentralization trends. Through a well-calibrated rebalancing act, they might help society find a higher purpose through greater proximity between production, consumption, and the environment; higher economic ownership and accountability; and tighter communities.
May Globalization rest in peace. And may its succession bring stability.’
[Informed by ‘Is the Global Economy Deglobalizing? And if so, Why? And What is Next’ (2023) published by the Brookings Institution and various other sources (see links).]