Deglobalization 2.0 op video
I have worked on deglobalization since I became professor at Erasmus University in 2009. Ten years of research have led to many publications. This video lecture shares what I learned and introduces my latest book Deglobalization 2.0.
We know globalization from our own experience very well. Increasing trade, foreign investment, travel and international cooperation. But that picture has spun recently as we have entered a period of deglobalization in which openness of the world economy is actually decreasing. According to recent forecasts, deglobalization is here to stay and may even deepen.
So don’t you think that we live in strange and usual times? We seem to live in the times of Trumpism, Brexitism and deglobalization. Our epoch definitely feels like something unique. But it is not. Indeed, our grandparents have been here before. Of course, the voices and characters on the world stage are different. But the stories of the Great Depression of the 1930s and the Great Recession, that we are still living today, are to a large extent similar. My book Deglobalization 2.0 argues that we need to study both periods together in order to understand where we are and where we are going.
The start of the story line is a financial crisis that reduces demand and destroys confidence. Next follows a collapse of world trade and investment that marks the end of decades of intensifying globalization. This world trade (and investment) collapse starts a period of deglobalization that at first remains hidden under the veil of initial recovery, but later becomes clear and measurable. This is what happened in the 1930s and it is happening today.
The most powerful man of the world is perceived by many as an irresponsible if not irrational president that spoils the international order that sensible men and women have been constructing since the Second World War. A world order in which trade, democracy and peace reinforced one another and have brought tremendous gains in knowledge and material welfare. This is a serious game that is now being spoiled in a reality show that has driven many of my friends and colleagues to stop watching the eight o’clock news. I do not disagree with the assessment that the world order is under threat of recent US activities. But I disagree if one argues that the policy is irrational. It is dangerous, yes, but we can understand why it is happening.
To some it is especially worrying that the retreat from globalization appeared to start in democracies, because the Bretton Woods institutions (and likewise the European Union) have been built by democracies. Indeed, my analysis finds that this is a significant difference with the 1930s when in contrast deglobalization did not move as fast in democracies as it did in autocracies.
So, the popular anti-globalist movements currently seem to hit the system at the heart.
While I do not want to downplay the issue of populism, it is, however, important to recognize that the turning point of globalization in major economies appears to have occurred around the start of the Great Recession, well before Brexit and the election of President Trump. Many observers make the error of blaming Mr. Trump and Brexit for deglobalization. They are wrong and confuse the symptoms and the causes of the disease. Why are Mr. Trump and Brexit only symptoms? Because the virus of deglobalization is widespread
It is equally important to see that the phenomenon of deglobalization requires a much broader conceptualization than the ‘backlash from globalization’ or the ‘retreat from globalization’ phenomena that are already being recognized by many authors. Deglobalization also occurs in countries where support for globalization is still strong, a puzzle that has not yet been addressed.
The idea, however, that we have entered a phase of deglobalization is contested by many observers who argue that what we see is the consequence of new technologies that reduce material flows, new modes of finance, new strategies and insourcing of international value chains. Other observers argue that we have a pause in globalization. This disbelief in what the data tells us is matched by the many authors that have predicted that the rhetoric of Make America Great Again would remain words only and that Brexit would be a ripple rather than the tsunami that its exit from the European Union created.
That may of course be right and it may be too early to tell, but my point is that globalization and deglobalization are recurring phases of our economic system. Because of this recurrence it is important not only to study the current situation but also to look at its major predecessor to find communalities and differences.
This is why we need to study both the 1930s (Deglobalization 1.0) and the 2000s (Deglobalization 2.0). This why you should read my book.