Friday, August 15, 2008
Paul Krugman raises the possibility that the present phase of globalisation may die just as the last phase died in 1914. Once again nationalism will be the killer and Georgia, like the assassination of the Archduke, may be the portent. Both phases of globalisation were bolstered by the conviction that the opening up of world trade was an irrevocable, permanent and benign state of affairs. Crucially, the profits of trade were expected to overcome the seductions of war. This is not, as Krugman says, 'a safe assumption'. Indeed. But he does add that this globalisation phase seems slightly more solid than the last because it is inconceivable that the countries of western Europe would ever go to war. This is possible but I suspect the frock-coated beneficiary of globalisation in 1913 thought his economic world was more stable than any other because of empire. People always find a special reason to believe they are special. I also suspect that nationalistic destruction of this phase has been going on for some time. The process will intensify under pressure from resource shortages. Georgia feels portentous mainly because of the startlingly aggressive behaviour of Russia, a member of G8, the globalisation club. But if you want the real portents, look no further than the price of oil and the depleted aquifers.
Posted by Bryan Appleyard at 6:39 am