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Political pressures could once again roll back globalization

16 2 0

WASHINGTON – The verdict of history is that the trade war that’s now raging between the United States and China will lead to no good — with consequences that could go well beyond trade and threaten the world’s geopolitical and economic stability.

How this plays out is anyone’s guess, but we should not pretend that there is no danger in letting the conflict fester. Possible fallouts range from a gradual disintegration of the existing global trading system, to the formation of trading and economic blocs, and, at worst, to war itself.

The historical parallels are mostly sobering. During the 1990s, the widespread assumption among economists and business leaders was that “globalization” was permanent and mostly beneficial. Global flows of goods, services, money (aka “capital”), ideas and technology boosted living standards.

The process was widely seen as irreversible, “a one-way road to the future,” as Princeton University historian Harold James has put it. But it wasn’t, as James argued in his astonishingly prescient book, “The End of Globalization: Lessons from the Great Depression,” published in 2001, at the height of the globalization infatuation.

With hindsight, it’s easy to see why so many observers (including me) bought uncritically into the globalization story. Much of it was and is true.........

© The Japan Times