In my note on Nov. 13, 2016, I drafted my prediction that “there is little doubt to me that globalization is facing review and re-assessment before moving forward”. Globalization, as thought by most of the participants in the World Economic Forum at Davos this year, has benefitted billions of people to reach wealth and gain better access to the physical and the cyber world.
However the businesses and the governments, especially those in the advanced countries and some of the major EM nations, while enjoying market expansions to the rest of the world, failed to put enough attentions in wealth sharing. Globalization accelerated income inequalities in American and in China for example.
While many of us are puzzled by the path forward of globalization, I am reading “the road to global prosperity” by Michael Madelbaum. Michael thought there are four main causes for the rise of the international economy. “
The first is the sharp decline in the importance of large-scale war. While armed conflict has not disappeared entirely, major conflicts, like the two world wars and the Cold War that followed, are now extremely unlikely.”
The second is “the conquest of territory and the defense of borders have ceased to the chief concern of governments almost everywhere and have been replaced by the promotion of economic growth”.
“Third, prosperity is widely understood as requiring a free-market economy”.
The fourth cause is the advance of technology. It seems to me all of the four reasons are remaining valid even with the new administration in the US and Britain.
We will see a bit bumpy ahead but the overall trend is hard to be reversed. I think what is needed is to revisit the “terms and conditions”, no one really wants go back to protectionism.
References:
[1] Michael Mandelbaum, The road to global prosperity