Deglobalisation on the Move

While democracy wasn’t supposed to win every time, rationality and good economic sense were. The world of business and trade were to enjoy the kind of prosperity inspired by the Big Bang i.e. an expansion that has only the world as its limit. And every nation, every company and every group of individuals would make the most of their fields of expertise. The ultimate icing on the global cake – borderless trade – would bring different peoples together. Never forget Fukuyama’s prediction about a universal harmony where he promoted the idea of relocation and internationalisation in order to share production costs and increase opportunities.

In fact, global commerce did double in volume during the 1990s, to then double again at the start of the 2000s up until the crisis in 2007. Those multinationals, whose take-off was quite spectacular, were brought to the honours table at a time when economies were being adorned with the elegant term of “integrated” and congratulating themselves for having wiped out inflation despite zero, even negative, interest rates. Nothing could be done: Brexit, the rise of Trump, draconian customs barriers imposed by the US against China, the subprime crisis, the European sovereign debt crisis – not even a hint of political or financial destabilisation was able to stem the tide of profits or shake up this immovable celestial powerhouse. In short, Huntington was asked to return to his studies and his “Clash of Civilizations” was discredited for good.

But geopolitics, that is now making a great comeback, has abruptly signalled the end of the line for globalisation. Capitalism subscribes unflinchingly to the logic of political tectonic plates which gets reborn from its embers as it rediscovers the national interest that many fools had relegated to the annals of antiquity. This is why the term “fragmentation” is now being used in a hushed voice, as if trying to exorcise the agony of a globalisation accused of not managing to stop the emergence of powers that are above all worried about no longer depending on alien blocs to survive.

The Cold War seemed so simple and Manichaean in comparison with the picture of unprecedented complexity being sketched beneath our eyes with major nations like India devouring everything it can like a parasite, Saudi Arabia literally mocking its great traditional and historical ally, or China suddenly realizing that its gigantic reserves in dollars are likely to be unilaterally frozen by the US. Multilateralism, which wavered during the great financial crisis, and which was anaesthetised during Covid, has now perished thanks to the Russia-Ukraine conflict.

It doesn’t really matter who wins or loses this war since it is now politics that dominates economics, quite logically. Nations are re building under the banner of hostile blocs. Deglobalisation has now become a guarantor of resilience.