How Globalization Came to the Brink of Collapse
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Imagine pouring grains of sand from the beach onto a cone-shaped pile. The pile grows taller and taller but, as it does so, it gets closer and closer to a critical state—the state in which one additional grain of sand can lead to a cascade or even the pile’s collapse. Just as with the sand pile, economic globalization is a complex system made up of the interaction of many parts. The drive toward interdependence and efficiency took economic globalization to the point of criticality. The coronavirus is now setting off a cascade of health, economic and social effects that may lead to a collapse of economic globalization.
Many of the advantages of economic globalization, such as increased connectivity and interdependence, also give rise to risks, such as the transmission of viruses and lack of self-sufficiency in producing essential items. Once economic globalization is seen as a complex system that involves great benefits as well as systemic risks, it is possible to think more clearly about options for managing those risks to protect against collapse. These options can include reforms that, for instance, reduce concentrated reliance on particular nodes within the system or increase redundancy of essential supplies in order to foster greater resilience.