Two substantial articles this week argued, in different ways, that ‘de-globalization’ is an indiscriminate and misleading term. What we are truly entering is a period of ‘re-globalization’. The First Law of Punditry is to always contradict, and contradicting those who speak of de-globalization is true to pundit tradition. De-globalization has indeed been frequently used over the past few years, along with subsidiary terms such as de-linking, de-risking, friend-shoring, and near-shoring. It may well have had its season. With ‘re-globalization’, we could be witnessing the rise of a new analytical cliche from the husk of an old one. SIG’s view, however, is that de-globalization still has room to run
In Foreign Affairs, the economist and former senior Biden official Brad Setser argues, under the commanding headline ‘The Dangerous Myth of Deglobalization’, that US-China de-linking has mainly resulted in lengthier supply chains for US imports: Chinese components have to travel longer as they detour through Vietnam, Malaysia, and Mexico on their journey to American markets. As he underlines, China’s manufacturing exports in general have risen under so-called de-globalization, spectacularly so in electric vehicles and other sectors that have been the focus of Chinese industrial policy. Setser also emphasizes that corporate tax avoidance, by US multinationals in particular, has proved to be a resilient form of capital globalization despite recent regulatory initiatives. These two examples lead him to conclude that deglobalization ‘offers analysts a simple story to tell’ but ‘the reality is more complex’, a conclusion that is inevitably true: reality is always reliably more complex than any one-word descriptor.
In World Politics Review, Roland Benedikter has advocated for ‘re-globalization’ as a more accurate term that escapes the disadvantages of de-globalization. His argument has three main contentions: that the pro-globalization alliance of neoliberal capitalism and ‘leftist cosmopolitanism’ has been broken in favor of economic nationalism; that autocratic non-Western states are leading a charge against globalization that feeds on and encourages a revival of non-alignment in the global South; and that globalization depended on the military umbrella of American power. The umbrella, he maintains, is being withdrawn by American unwillingness to continue paying for it, the determination by China and others to challenge it, and the displacement of it by economic, political, technological, and military competition in space, from low-earth orbit to the moon and beyond.
Setser’s two main points and Benedikter’s three are all well made. Several will be familiar to SIGnal readers. None benefit much from being shoehorned into a debate over the proper definition of de-globalization (Setser) or the substitution of a new term like re-globalization (Benedikter), but they all have the virtue of drawing attention to how subtle and complex the ongoing reconfiguration of political and economic internationalism actually is.
SIG’s view is that de-globalization continues to be a useful shorthand term for describing that reconfiguration, but it is only a shorthand, a point of departure rather than a destination. The main factor remains the re-emergence of states as economic actors maximizing their autonomy on behalf of their respective peoples, most often ethnically and culturally defined. This phenomenon is consistent across democratic and un-democratic societies, rich and poor ones, ex-imperial states and ex-colonial ones. It can probably be dated from the Asian financial crisis of 1997, when China showed that state management of international capital flows was not a first step on the road to serfdom. The triumphal period of the US-led post-Cold War liberal international order then amounts to the six years from 1991 to 1997 — not notably long.
The principal counterforces remain the diffusion of technology and education, the cross-border movement of people (driven principally by economic inequality, at one end, and demographic stagnation or decline at the other), and the mobility of capital in terms of both investment and the securing of profits (very much including offshore). None of this is necessarily liberal or orderly. Globalization and de-globalization are twin forces in a single dynamic that does not resolve into one or the other. ‘Re-globalization’ is a valiant attempt to be neither here nor there, but the reality it confronts is both at once.
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