Here is another timely article on the state of the global economy. This time the subject is deglobalization. It is a good quick read that gets right to the point. Go ahead and read it first. If you still are skeptical about whether this is at all possible – read this too from today’s news (20090914).
Capitalism is broken, perhaps fatally (as is mindless consumerism), and the lack of sufficient quality jobs in the US runs the risk unrest. See my earlier post on the subject of jobs. Globalization has failed mostly due to the inability of the market to raise the standards of living of those countries supplying the workforce and thereby create new markets for US produced goods (exports and the related jobs at home). There are a few exceptions though free trade has, for the most part, made a just few people in those countries very rich. I am a proponent of some of the 11 pillars, but there are a few that (appear to) run too close to neo-socialism (I was going to use neo-communism, but that term has been usurped by the Right to hurl at the Left ever since the term Liberal has lost its impact). Hopefully, if we go this route, we will not end up like France – or worse.
I suspect that as climate change begins to disrupt water and food supplies, degloblization will rapidly take hold. International trade will become more strategic. China is already ahead of the game here as they have been buying up rights to strategic natural resources worldwide for some time now. Whether those rights can be enforced (peacefully) remains to be seen. One thing the article does not address is what deglobalization does to the huge, internationally-held US national debt. If ‘they’ cannot buy/import stuff (like food) and are not allowed to invest in the US, then the debt becomes worthless/uncollectable, the international currency/credit markets collapse (might not be a bad thing in the near-term with a return to something like the gold-standard). International trade will revert to a barter system (goods for goods – not a currency).
No matter how I look at this, the word ‘stability’ does not seem to apply. We need to replace the for profit motivation of the capitalists with something more sustainable (and perhaps even moral) for the post-capitalist system that will replace it.