Globalization and deglobalization: experiences from history and recent events

Abstract

A thorough analysis of historical experiences is required in order to draw comparisons from instances in which nations have enacted protectionist policies or responded to such policies by other countries. This is necessary considering the recent string of events that have hindered globalization. The future of globalization is again in doubt in light of the ongoing crises in Russia and Ukraine, the current trade dispute between the USA and China, and the rising tide of nationalism in many important nations. This study was conducted to gain a better understanding of globalization under the challenging conditions seen in the past and to develop suggestions for the future of the global economy. The goal of the study is to identify any necessary course corrections to get the world back on the path of collective growth. We examine possibilities for the future of globalization by studying the phases in the history of the 20th Century. We aim to derive insights about the potential course of the actions based on underlying unchanging patterns observed during the ebbs and flows of history. The study observed that globalization moves in cycles, with periods of protectionism and liberalization. Periods of economic slowdowns are prone to protectionist policies as nationalist politics start gaining light. The introduction of barriers to trade by any country leads to retaliation by other partner countries and trade declines. Countries adopt protectionist majors due to political expediency, but the long-term impact on global welfare is negative. On the other hand, rapid technological evolution, favorable demographics, and political backdrop are essential drivers to accelerate globalization. Globalization, while globally beneficial, produces some losers as well. The key for nations is not to shy away from globalization but to adopt it along with the policy support suitable for the affected constituents. We recommend adopting improved social safety nets for the negatively affected parties, establishing temporary and non-renewable work visa programs with set expiry dates, vocal rigorbased participation in the debates, and improved public education as a few solutions for maintaining a globalized world. These are essential to ensure the continuation of global trade, investments, and migration.