Zbyněk Fiala on Deglobalization 2.0

However, the fear of exaggerated globalization is also expressed by serious economic science. There is no unity, but there is a stream that speaks of the recurrence and withdrawal of globalization. One such deglobalization occurred after the Great Depression in the 1930s and the other began after the Great Recession, as Americans call the financial crisis after 2008. Peter van Bergeijk writes about it in Deglobalization 2.0, Trade and Openess . The book has just been published by Elgar Publishing and is also available in electronic form, so I could read at least a summary of the first chapter. ( HERE )

Basically, today's processes of 'deglobalization', ascribed to Trump and Brexit, were much earlier. So we see symptoms, not causes. Like all economic processes, globalization has not only revenues but also costs. In the beginning, revenues grow faster than costs. Greater openness of the economy opens up huge profits that can be partly offered to the population in the form of boom and cheaper goods. Economic growth is based on increasing productivity. But production is increasingly moving overseas. This creates social costs. There is pressure on the domestic industry. Bottom races are starting to hinder wage growth. The huge concentration of the economy destroys the weaker players, paying for the import boxes at home. Social inequalities are on the rise, and they have already overcome the situation before the Great Depression. Society is entering a stage where it can only improve the social situation by reducing its involvement in globalization. This is what Trump has, although he has never read this book, and perhaps no other book.

In addition, we are witnessing a power struggle to preserve American hegemony in the world. This also accompanies Trump from the start, but it is not his struggle, he must not give the impression that he is his weak link. This is the struggle of the "deep state," the neocons, who are not distracted by the distinction between Republicans and Democrats. It has become American custom to run presidents behind the scenes. Barack Obama managed, he did not have them. But Trump is a nut. He's trying to cheat on those matches. He always comes up with the most radical thesis that takes the breath away, and when it escalates, he shifts his attention to something else.

President Obama spoke sensibly and tried to define peace policies, but he eventually dunked in the new devastating wars in Syria and Libya. Trump, so far, no new war has occurred, on the contrary, retreats in Syria and in Afghanistan negotiates with the Taliban. Even the Korean crisis did not cause shots. Negotiations with China, the next round is likely to take place at the end of June at the Japanese G-20 meeting. Let me allow the blind man's prophecy that Trump will not allow the situation to go to war. But it can use tensions, for example, to make greater Chinese and South Korean concessions to address the North Korean crisis.

But beware, Europe is not out. The trade war that is going on with China is also ready for Europe, but has been postponed for six months. One of the cards Trump tries to trump at home is also the ability to squeeze substantially higher purchases of American weapons from Europeans. The EU is defending itself, even if it doesn't talk much about it. One measure is to decide that large arms purchases will be discussed in a special committee to draw attention to European alternative suppliers. Armament spending would rise as Trump demands, but not for the purpose desired in his eyes. It won't go unanswered either.

None of the small European states is able to cope with unilateral American demands, but we can only criticize them on the notice board. A sensible European unification gives a better chance. Is it achievable? It is now decided.

Published on Vasevec.cz .


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