A few days ago I had the opportunity to participate in a congress in Seville, and I attended a conference given by PhD. Jose María O´kean -Economics Professor-; who made a radiography of the current economic scenario and the different «wars» that we are seeing in an international scale for getting the control of the global trade.
Especially what caught my attention was the analysis that he made about a phenomenon that we could define -although it was not the term that he used in his speech- as a regionalization. Basically, it consists on the different policies that are being implemented by some of the world´s biggest power leaders -like USA or China-, for encouraging the consummation of local products above the goods that comes from outside countries.
I know that I am not discovering something new, because by only watching the news, these actions that some countries are doing, are continuously in the spotlight. What I really found interesting was the “why”, what made them implementing those protectionism measures.
In this sense, the economists Soumaya Keynes and Chad P. Bown wrote an article in the prestigious magazine The Economist on last January, under the title Slowbalization; concept that is regarded to the different forces that stop this process of globalization. Whether through the application of tariffs to import of goods, or by any other measures that protect the local industry.
The case of Apple in USA is well known, following with a statement by the president Donal Trump a few months ago, in which he urged the North American company to manufacture its iPhones and the rest of its products in the United States; arguing that China was the only one that was taking advantage of its sales. Like this, we could mention more examples that are very similar.
As I said at the beginning, what it is really interesting is the analysis of what has provoked these types of policies at the international scale; because it is not only a fight between the two main world´s biggest power leaders to gain the upper hand; nobody can be on the outside of what Brexit really is -something similar to “shooting itself in the foot” of the European Union-. In fact, supposedly for UK an approximate drop of 10% in their GDP. That is not just “small talk”. For example, along the crisis, Spain lost approximately between 4% and 5% of its GDP… and it still hurts.
Sociological and opinion studies say, that this defensive strategy comes encouraged by destruction of traditional industry in favour of the big multinational companies. Of course, giving these circumstances majority of ordinary people are saying “let´s vote for nationalist parties that protect us”. For this reason, the populists are not isolated facts, but they are proliferating in all the “advanced” countries, reopening debates that were already overcome.
[…]this defensive strategy comes encouraged by destruction of traditional industry in favour of the big multinational companies”.
These new policies are making us stop cooperating and trading which is what really gave us the welfare that we are enjoying today. This is not about my opinion, but the real facts. Globalization together with Capitalism, have demonstrated being an efficient system under a free competition regime, making goods and services more affordable for families and companies.
As it happens with technology -for majority nowadays seen as the enemy-, although it made us advanced. In fact, technology is one of the main vehicles at the service of Globalization, that made it possible to reach the greatest achievements in fields as necessary and vital as sanity, transports and communications.
As a conclusion -and paraphrasing Winston Churchill when he talked about Democracy, we could say that Capitalism is the worst form of all economic systems except for all those other forms that have been tried from time to time. Thus, Globalization -as a growing tool of this economic system- has demonstrated being that as well. Another thing is, that the intervention of the different public administrations is necessary for ensuring that this system works well (e.g. Competition Board); avoiding the monopolies and other unbalances. So, I think this is not a perfect system, not at all.