The end of the age of globalisation, by Phil Mullan

The war will push the global economy in the opposite direction—towards more decentralization and autarky—than the globalists want. From Phil Mullan at spiked-online.com:

How Russia’s invasion of Ukraine could hasten the demise of the US-led economic order.

The economic consequences of Russia’s bloody and despicable assault on Ukraine are very much a secondary consideration to the immediate human and geopolitical implications. And since the various national responses to the conflict are still so fluid, it is far too early to be able to identify the war’s precise longer-term economic effects. Nevertheless, it is possible to tentatively suggest what could unfold on the international economic front.

At least in the short term, the direct and indirect disruptions to economic relations arising from the invasion will almost certainly damage prospects for economic growth and boost inflation far beyond the combatant countries. In particular, the relative toughening of sanctions will generate economic difficulties in many areas beyond Russia itself.

While the war is of huge importance geopolitically, it would, however, be misleading to overstate its economic effects, given all the other enormous economic challenges already in place. For example, the Financial Times claims that the war has ‘shattered hopes of a strong global economic recovery from coronavirus’. But this implies that a strong recovery was already on the cards. There has long been a prevalent complacency that ignores the fundamental atrophy afflicting most advanced industrialised countries. War or no war, the high debt and weak investment common to many Western economies are likely to mean a continuation of the sluggish growth of the past decade.

More broadly, the repercussions of the war are likely to reinforce existing economic trends towards autarky and regionalisation, rather than taking us in entirely new directions. Analysts at Goldman Sachs, for instance, suggest that the war is going to damage globalisation and reinforce de-globalisation forces. But this conventional counterposition of ‘de-globalisation’ to ‘globalisation’ does not help clarify what is happening. In practice, market capitalism has always operated both nationally and internationally at the same time. As a result, economic internationalisation (‘globalisation’) can easily co-exist with a heightened focus on national economic considerations (‘de-globalisation’).

Continue reading→

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.