IMF Book Forum: Why globalization works
| Author | Christine Ebrahim-zadeh |
| Position | IMF External Relations Department |
| Pages | 317-318 |
Page 317
Given economic instability, fears of terrorism, protectionist reactions to economic change, and the rise of new competitors-above all, China, and now India-opponents of economic integration could yet do grave damage, Wolf conceded. But the forces against globalization are not strong enough to cause its disintegration, he said, and it seemed implausible that global integration would collapse, as it had in the interwar years of the early 20th century as a consequence of international rivalries, economic instability, protectionist interests, and anti-liberal ideas.
Today, the situation is different in four fundamental respects, Wolf explained. First, there is, for the moment, a single undisputed hegemon-the United States-and a war among great powers in the near future seems unlikely. Second, all the great powers seem to have abandoned the notion that prosperity derives from territorial gains and plunder rather than from internal economic development and peaceful exchange. Third, all the great powers now share a commitment to market-led economic development and international economic and political integration of some kind. And, fourth, global institutions and close international cooperation reinforce the basic stability of the political order.
But against this, noted Wolf, there is one obvious parallel to the 1930s. The breakdown of the early 20th century order occurred in large part because of the pressures to accommodate rising powers in the global economic and political order. "If the United States remains wedded to notions of global primacy rather than of a shared global order, conflict with a rising China would seem almost inevitable," he cautioned. In addition to these political pressures, China's ascent will force uncomfortable economic adjustment on the rest of the world-a phenomenon that is already fueling protectionist pressures in a number of countries. But a greater threat to the world's commitment to open borders is megaterrorism, said Wolf. He called for global cooperation and improved security mea sures, rather than closing borders, as a means of controlling terrorists.
A second danger is economic instability. The decisive event, without doubt, in the collapse of the integrated economy of the late 19th and early 20th century was the Great Depression, and its related financial and exchange...
To continue reading
Request your trial