We’ll miss globalisation certainly when it’s gone

At the dawn of the 20th century, Norman Angell famously (or infamously) predicted that the era of global commercial integration had made great power conflict so costly and destructive as to be unthinkable.
A few years later, the outbreak of World War I proved him right about the cost and destruction, but wrong about being unthinkable. The Great War ended the first era of globalisation, and it took generations to rebuild level of worldwide integration that pertained before the assassination of Franz Ferdinand.
Russia’s invasion of Ukraine is a much smaller conflict than World War I, and the trade disruptions associated with the US/European quasi-embargo on Russia are smaller than the British blockade of the Central Powers. But the clash is nonetheless a giant step away from globalisation — and, unlike World War I, it comes at a time when the world has already been moving away from economic integration: Trade’s share of global GDP peaked in 2008, and has been falling for the past decade. So the war in Ukraine doesn’t necessarily mark a sharp break in history. But it underlines and will perhaps cement the decline of globalisation.
That decline started with a populist backlash to the Great Recession and sluggish employment growth that made the politics of saving jobs more appealing than the politics of efficiency. Eventually, the logic of geopolitical conflict entered the equation. President Xi Jinping’s “Made in China 2025” initiative, for example, isn’t about creating jobs, it’s about securing economic space for China to operate with political autonomy.
In a similar fashion, when Vladimir Putin’s Russia got hit with sanctions in 2014 after taking over Crimea, it responded not by withdrawing from Crimea but by launching a crash effort to sanction-proof the economy by emphasizing domestic production. That’s been costly for Russia, which is a sparsely populated nation rich in natural resources and so really ought to be highly trade dependent economy. But it also hasn’t worked, with the current sanctions regime demonstrating that countries which seek to protect themselves from American bullying will need to reduce their dependence on international supply chains even further.
Of course, most countries don’t aspire to launch unprovoked invasions of their neighbours. Yet even actors more benign than Putin can see the value of autonomy.

—Bloomberg