The virus confirms that the world needs rules for living together—but not the arbitrary rules we've got. For the good of the economy as much as anything else, the focus must shift from investment and trade to public health and the climateby Dani Rodrik / May 4, 2020 / Leave a comment
What do you think of when you hear the word “globalisation?” It might well be the usual newspaper illustration—the container ship that moves merchandise round the world. And if cross-border commerce is what we mean by the G-word, then Covid-19 has brought it to its knees: the World Trade Organisation (WTO) is forecasting that it could sink by as much as a third this year.
Perhaps instead you imagine globalisation in terms of financial flows and border-straddling banks. In that case, the screens of red numbers seen on trading floors this year attest to there having been plenty of trouble on this front as well. Or perhaps you are an enthusiast, and think of our global order as about mutually beneficial co-operation of governance. If so, you are likely finding the coronavirus crisis even more depressing. From Donald Trump’s branding of the disease as a specifically “Chinese virus” and his defunding of the World Health Organisation (WHO), to the violation of rules about sharing medical data and an unseemly scramble to secure masks and ventilators amid unilateral export restrictions, there is scant sign of global harmony just now.
The irony, of course, is that at the same time the virus risks setting globalisation (as we have conventionally understood it) spinning into reverse, it is also affirming anew our shared fate as human beings. That might seem like a paradox, but in fact our present-day globalisation is not and never has been the only way—or the best way—of meshing together our economies and other interests. And it is not only scholars in ivory towers who are wondering if this is a moment for a reset.
President Macron of France is both a determined economic liberal and former investment banker, and yet he used a major interview with the Financial Times in April to concede that amid the strains of climate change, inequality and “weakening democracy,” “we already had the feeling that the established mode of globalisation was coming towards the end of its life,” even before the coronavirus crisis hit. And that now, we needed urgently to establish a new “grammar of multilateralism.”
It is indeed a moment to reflect critically on the route we have taken, an approach I call “hyper-globalisation,” and to interrogate the principles that should guide our global rules. We can also begin…