1/13/2020 Is it time to declare the end of globalisation?

| Financial Times

Non-Fiction C
Is it time to declare the end of globalisation? S
CSS-Mania-0315-0345231
S
- of emerging markets
Two books try to make sense of what has gone wrong — but ignore the successes
M
a
n
i
a
-
0
3
1
5
-
0
3
4
5
2
3
1
Shipping containers in the port of Radès in Tunisia © Eyevine

James Crabtree JULY 19 2019

Globalisation is coming undone. Once thought unstoppable, the forces of liberalisation that
spurred many decades of rising cross-border trade are faltering. And while President Donald
Trump’s policies are hardly helping, this malaise of interconnectedness appears more profound
than any mere trade war.

Flows of overseas direct investment have fallen to levels not seen since the 2008 global financial
crisis. Trade restrictions are rising. Genuine multinational companies — meaning those that earn
at least a quarter of their revenue abroad — are less numerous and profitable than before. Rather
than a free-spirited zone for unfettered communication, the internet is growing Balkanised,
brought to heel by autocrats. Even those who once pushed globalisation as a force for prosperity
admit that things have gone badly awry.

Two new books try to make sense of what has gone wrong, examining the benefits that global
integration was supposed to bring and the many social and political tensions it created instead.

The Levelling by Michael O’Sullivan, a veteran banker at Credit Suisse, offers stark conclusions.
“Globalisation, at least in the form that people have come to enjoy it, is defunct,” he writes. “It may
well be better that those who have grown fond of globalisation get over it [and] accept its passing.”

CSS-Mania-0315-0345231

https://www.ft.com/content/70bc7566-9bf2-11e9-9c06-a4640c9feebb 1/5
1/13/2020 Is it time to declare the end of globalisation? | Financial Times

The causes of this collapse are familiar. Outsourcing hastened the decline of western
manufacturing employment, and thus many of the communities that relied upon it. Movement of
people across borders, both legally and illegally, spurred a populist cultural backlash, fuelled in
turn by rising inequality.
CSS-Mania-0315-0345231
O’Sullivan suggests a deeper malaise, however, drawing ideas from the Putney debates, a series of
gatherings in the aftermath of the English civil war in 1647, and often cited as an early inspiration
for Britain’s later tradition of constitutional democracy. His titular “levelling” bounces off the
Levellers, a group of proto-democrats who used those debates to push for radical social reforms. As
globalisation retreats, he claims that much the same is needed today: “The contract people thought
they had with politicians, governments, institutions, and potentially each other is disintegrating.”

The second book, The Crisis of Globalization, brings together essays by thinkers on the political
centre-left, edited by Patrick Diamond, a one-time adviser to Tony Blair, former UK prime
minister, in exactly the period when many centrist politicians viewed globalisation as both positive
and non-negotiable. Although this is not exactly a mea culpa, Diamond now firmly rejects this
view. “Global capitalism no longer appears capable of generating broadly shared prosperity,” he
writes. “Clinton and Blair’s refusal to confront the polarising forces of unfettered global capitalism
is one of many reasons for the contemporary obsolescence of the progressive tradition.”

https://www.ft.com/content/70bc7566-9bf2-11e9-9c06-a4640c9feebb 2/5
1/13/2020 Is it time to declare the end of globalisation? | Financial Times

Both books are carefully argued, although neither

spends much time talking about emerging markets,
Global capitalism no longer where globalisation’s record is arguably more
appears capable of successful, for instance in creating the economic
generating broadly shared conditions that allowed countries in emerging Asia to
prosperity move hundreds of millions out of poverty.

It is also possible to claim that globalisation’s

reversal is in part a trick of the light. The kind of
growth in physical goods that marked recent waves of globalisation is indeed slowing. But cross-
border activity in other areas, for instance in knowledge services or flows of data, continues to
expand, suggesting that new forms of cross-border integration can develop even as the traditional
ones decline.

CSS-Mania-0315-0345231

O’Sullivan, at least, disagrees with this, suggesting that globalisation of all stripes is set to retreat,
reflecting the realities of a new multipolar world that is simply unable to sustain the kind of
international institutions that once powered globalisation’s advance. This will have consequences:
we must prepare for growth in the region of just 2 per cent, he predicts, barely half the rate of
recent decades. A Chinese financial crash is likely too, representing “the logical end” of the series of
debt-fuelled crises that hit both the US and Europe.

https://www.ft.com/content/70bc7566-9bf2-11e9-9c06-a4640c9feebb 3/5
1/13/2020 Is it time to declare the end of globalisation? | Financial Times

All this could prompt a bloody collapse of the entire international system, as happened at the tail-
end of an earlier period of globalisation in the early 20th century. More likely is a future in which
existing global institutions seize up, beginning with the World Trade Organization, O’Sullivan
suggests, possibly to be replaced by less effective ad hoc and regional groupings, from the Chinese-
led Shanghai Cooperation Agreement to the so-called “Hanseatic League 2.0” of minor northern
European powers.

Can anything be done to save some of globalisation’s

good qualities? Leaders such as Blair once hoped
It may well be better that investments in education and training might help
those who have grown fond people adapt to rapid economic change. More
of globalisation get over it recently others have suggested measures to
[and] accept its passing compensate globalisation’s “losers”. Neither
approach has proved remotely effective or popular,
which is why Diamond’s collection instead advocates
what he calls a push for better “universal basic services” — meaning a much more generous menu
of social support programmes, from healthcare and housing to transport and digital access, which
might help people facing economic dislocation feel more secure.

This sounds like a formulaic social democratic response. That is perhaps no bad thing, given that
many of the countries that escaped the worst of the present globalisation backlash, from Canada to
the Nordic states, follow something close to this model. Yet even were such measures to be
affordable, they are unlikely to be enough to reverse the declining path of globalisation charted by
both The Levelling and The Crisis of Globalization. International financiers and political
moderates were once exactly the types who pushed the merits of integration. Now they come not to
praise the passing era of “hyperglobalisation”, but to bury it.

The Levelling: What’s Next After Globalization, by Michael O’Sullivan, PublicAffairs,

RRP$30, 368 pages

The Crisis of Globalization: Democracy, Capitalism and Inequality in the Twenty-

First Century, edited by Patrick Diamond, IB Tauris, RRP£22.99, 304 pages

James Crabtree is associate professor in practice at Singapore’s Lee Kuan Yew School of Public
Policy, and author of ‘The Billionaire Raj’

Join our online book group on Facebook at FTBooksCafe. Listen and subscribe to Everything
Else, the FT culture podcast, at ft.com/everything-else or on Apple Podcasts

Copyright The Financial Times Limited 2020. All rights reserved.

https://www.ft.com/content/70bc7566-9bf2-11e9-9c06-a4640c9feebb 4/5