Will Putin Kill the Global Economy?

Mar 31, 2022 · 784 comments
Young.Jedi (La,In, Ks, Id.,Ca.)
Like E.F. Hutton, I listen when Krugman speaks. Yet globalization has left a bitter taste in many Americans' mouth as they saw their communities decimated with the off shoring of jobs so a few could be rich while the many became destitute. Democrats never found an answer for these communities and they now fall prey to phony populists like 45. Without a stronger safety net globalism is just another word for make the rich owners richer, the rest poorer. America already suffers from the ethical corrosion of extreme economic inequality.
hen3ry (Westchester, NY)
No, Putin merely started a war to grab land he isn't entitled to. However, he never made any secret about wanting to reconstitute the Soviet Union. The rest of us on the other hand, didn't bother to plan for this or to try to get away from using oil. So maybe the question is not if Putin will kill the global economy but this: will the rest of us, especially the United States, learn to see beyond profits?
Paul Wortman (Providence)
The irony is that while "Putin Kill[s] the Global Economy," he may be saving the globe by accelerating the switch away from climate killing fossil fuels to renewable, planet-saving green energy!
Yasser Taima (Dallas, Texas)
At the same time global trade is taking a hit, regional trade is growing: Arabs trading with Arabs, ASEAN countries amongst themselves, and USUKEU as a block with Africa and Latin America as potential partners. That isn’t as bad as 1914. The world is better off if products aren’t shipped across the world at considerable expense in carbon emissions. It makes sense from a lot of perspectives that your tv in Texas comes from Mexico instead of Indonesia, and that your tv in Shanghai comes from Malaysia instead of Hungary.
c harris (Candler, NC)
"Botched war of conquest"? The reality is that Russia was responding to many years of provocation with US interference in Ukraine and Nato expansion. The 2014 coup that brought anti-Russian hard-core nationalists to power with US support was a severe provocation Its now conjectured that this was the beginning the USs efforts to depose Putin from power. The US has for years have been training giving military Ukrainians. Encouraging them to attack Russians inside Ukraine in Donbas. Deglobalization is one outcome of the USs irresponsible sanctions over the Ukraine war. The US has basically tried to remove Russia from international commerce. The US has threatened countries to not help Russia which has caused the opposite effect. Countries are trying to scale back their exposure to the dollar and US financial interests. The US sanctions might end up being as damaging to the US and world as the Smoot/Hawley tariffs at the beginning the Depression.
sergie (las vegas)
@c harris . I completely agree. Sanctions are very stupid. They harm more those who introduce them .Especially the population of these coutries.
Blanche White (South Carolina)
@c harris Russia sounds like the place you would enjoy living in.
Jane Ember (Philly PA)
Apparently, newspeak is alive and well.
Chris (Berlin)
Biden and his band of incompetents are doing a great job all by themselves.
jim mcgurk (32952)
Global economy is based on how much do I want, not how much I need, any drives production an any product.
Chuck (Yacolt, WA)
@jim mcgurk Please proofread dictated submissions.
Ted A (Massachusetts)
Sadly Dr. Krugman’s analysis that the current moment is more analogous to 1914 than the 1970’s is correct. It’s troubling and sad because the economic depression and Second World War were much worse than what followed the 1970’s. While it seems the West will prevail over authoritarianism in the years to come, it begs the question of what worse may come after that if we are not careful. Let’s hope we learn from this history.
DK (New York, NY)
The big difference today is that the world today can react much more quickly. Technology is already having an impact on offshoring and making transport a bigger share of production costs. This even without taking into account the true costs of carbon positive transportation.
Bill White (Ithaca)
I'm pro-free trade and pro-globalization, but we should organize our own world trade around principles of democracy, respect for human rights, and respect for the environment. Essentially, we should restrict "most favored nation" status to countries that share these values - granting such status status to Russia seems like an oxymoron. Revoking it was a start.
Thomas M. (Tampa)
@Bill White…How can we only deal with nations who respect democracy when we are living in an oligopoly? Does anyone doubt that the ultra wealthy control the government? When the needs of the working class are actually addressed in substance by politicians we can call ourselves a democracy. Not before. There are many issues that are shamefully ignored, such as no national healthcare, even during a pandemic, and we remain the world’s biggest polluters and our weapons industry kills more civilians than anyone else. One could go on, We are in no position to judge who is good or bad. If Putin was to be brought up before the world court, don’t you think George Bush should be in the adjoining cell?
Jeff Barge (New York)
This is perhaps crudely phrased, but I wonder if we have a problem of having had too much money created and put into the world, through cybercurrency and U.S. debt, and what are the implications of that? With so much money, where is it to go? No wonder corporations are now investing in individual houses and ending the American dream for many. There is just nowhere to put all that money!
Bruce (Hanover, PA)
@Jeff Barge I think that may be the most profound economic question of the moment. Where is all that money going and what are the implications?
Young.Jedi (La,In, Ks, Id.,Ca.)
@Jeff Barge giving less $ and power to fewer is almost alway a recipe for trouble.
Doug McLaren (Seattle)
It’s worth a bit of time to consider definitions of globalization, and there are many. For me, what globalization means is that borders between countries pose less of an obstacle to trade, travel, social interchange and such. In the globalized world governments of sovereign states permit a large degree of porosity at their borders, allowing exchange and diffusion of people, goods, intellectual property and various intangibles. With this definition, the retreat from globalization in the current era might be marked as when the major economic powers began to reinstitute barriers to immigration as political parties and various authoritarian megalomaniacs found capital in trading fear of immigrants against the economic benefits that immigration brings. The weaponization of immigration has contributed to America’s severe political polarization and also Brexit. For a while, corporations and elites seemed to be immune from de globalization, but now we’ve taken a step further, erecting new trade barriers, weaponizing capital controls and international currency exchanges, seizing property of transnational elites (Russians this time, but who’s next?). De globalization might bring some benefits, such as bringing international corporations back under control of sovereign state governments, but will make it more difficult to solve truly global problems, such as climate change.
Old Desi (Cali)
"Britain managed to keep growing despite the decline in world trade after 1913. " Yeah! by stealing from their colonies, mainly from resource rich India, which was raped and pillaged by these so called democratic and freedom loving Victorian "Gentlemen". I expected better from a Nobel prize winner.
Eddie (Davenport, IA)
@Old Desi Personally, I expect no better from an economist.
HAP (California)
I will gladly pay more for an iPhone or a car or a T-shirt if it's made in Indiana or Michigan or anywhere else that doesn't benefit authoritarian killers.
Richard Gordon (Toronto)
@HAP Are you sure you want to pay $4,000 for an iPhone?
Steve Heitmann (Portland, OR)
Bring back manufacturing to the U.S. Lose a dime for Wall Street and gain a dollar for America. If that's the consequence of isolating and impoverishing Russia, that might be good news for Americans (although sad for Russian citizens) Corporations might finally learn that maximizing profits regardless of consequences is not sustainable. Sustainability involves optimizing profits, good business, investing in the long-term, and helping sustain communities, small and large.
Steve Heitmann (Portland, OR)
I'm much more optimistic than Krugman. Today's economy is enhanced by automation, A.I., additive manufacturing, telepresence, computers and software tools (there's an app for that). The global economy (40%-60%?) is driven by information and knowledge workers. Any deleterious effect will be short-lived (6-12 months) and of small consequence. Krugman is essentially saying Russia is a wheat farm and gas station with nukes (borrowing from Senator Mitt Romney). And if Putin continues his megalomaniacal destruction of UA, he'll succeed in restoring the U.S.S.R., which in 1989 was impoverished and isolated. The global economy doesn't need Russian nukes. No loss there. There're options for wheat production. Perhaps U.S. and African farmers combined can replace Russia's export production. And gas? Buying Venezuelan oil exports is looking promising, and the U.S. has processing plants ready for Venezuelan oil. U.S. oil and natural gas production will likely increase, with Biden's incentives. Moreover, EV purchases also will increase (likely accelerate), so demand for gas will decrease. For heating and other electrical needs, as much as I'm opposed to uranium-based nuclear power (Thorium is good), EU countries could temporarily reactivate their nuclear power plants as a stop-gap. And I'm quite sure wire harness production will continue unabated. Any of the EU's or Japan's car manufacturers can do it, if UA can't, by reactivating production they once did themselves.
Stephen Merritt (Gainesville, Florida)
Thank you, Dr. Krugman. If only the people who need to do so would take this column seriously.
Errol (Medford OR)
No, Putin won't kill the global economy. Nor will he be the cause of the very high inflation that the US and Europe are and will continue suffering. I support most of Biden's sanctions....except for one, the ban on purchase of Russian oil & gas. That sanction is utterly foolish because it harms the US and Europe substantially but will not harm Russia at all. In fact, it will likely benefit Russia. The oil and gas that Europe and the US don't buy will simply be sold by Russia to China and India and probably at higher prices since prices will rise as a result of the inefficiency in the market created by the foolish sanction. (Biden insults our intelligence today by referring to the recent increase in oil prices as Putin's increase.....the increase is 100% due to Biden's foolish sanction on oil & gas).
analyst (Ireland)
Bangladesh refused to condemn the Russian invasion of Ukraine in the UN vote, they do not deserve any growth in trade with civilized countries.
Jose (lima, peru)
I want to understand Krugman. If the US, Europe and many countries in the world would not have let themselves depend "fecklessly" on Chinese exports, world trade would not have expanded. Remember David Ricardo..... When economists (even brilliant ones as Krugman) pretend to step into international polítics....I stop reading them. "Zapatero a tus zapatos"
Barbara (Rust Belt)
One class of product that was not traded as much in 1914 was fertilizer. Farms made do with crop rotation and manure for the most part, but not anymore. There are three main elements that plants need to grow:. Nitrogen, Phosphorus and Potassium (K). Russia is a major supplier of N, which is made of natural gas, and P, and Belarus of P. If Europe and North America cannot get sufficient supplies, there will be less food available come fall, and if fertilizer is in short supply then, the winter wheat crop will be short for 2022. A shortage of wiring harnesses is one thing, but a shortage of grain is quite another.
Auntie Mame (NYC)
@Barbara Chemical fertilizer was possible only when Fritz Haber, responsible for gas warfare in WWI and winner of a Nobel Prize for the following made ammonia -- fixed nitrogen - the chemical crops need to grow.. around 1910!! According to the PBS NOVA program two billion people eat today because of my distant cousin's invention.
Barbara (Rust Belt)
Correction:. Russia and Belarus are sources of Potassium, not generally of Phosphorus.
Don Stacy (Spokane, Washington)
Bangladesh will become another major importer from China, and the world economy may will split in two along the fault line between countries run by the rule of law, or run by another autocratic Russian after Putin either falls terminally ill or is assassinated, or by that strange mixture of capitalism, communism, and autocracy (Xin Jinping) you find in China.
Jeffrey Harris (La Jolla)
As Mr. Krugman points out this war may spark the end of globalization as we now know it. But perhaps there is a bright side of this, since it is a wake up call for the US to re-establish our manufacturing industries which would help revitalize our cities, save our independent farmers so they can continue to feed America, bring pharmaceutical production back home and lower our dependence on generics made in India, produce our own solar panels and wind turbines, improve our high speed rail and 5G technology, build modern airports with transportation that links them to their communities and on and on. Use this crisis to get our do-nothing Congress to enact some bills that help America. We don't need to fritter away our tax dollars building more naval destroyers that can be sunk with a single missile fired from someone's shoulder or other antiquated weapons of war. Start improving our self-reliance now. Pumping this money into the US economy will solve any financial difficulties we are facing are will in the future.
Dadof2 (NJ)
"The Economic Consequences Of The Peace" may well have been John Maynard Keynes's most controversial and biased work, and far less respected than his "General Theory". He might have been (mainly) right in his predictions, but, remember, he was a Conscientious Objector to the Great War in the first place. Still, while Germany clearly did foment the war, did bring terrorizing the civilians into modern warfare -- many non-military Belgians were murdered by the German Army, the Reparations "diktat" made little sense, and placing the blame on the civilian democratic government that replaced the Kaiser made even less sense. To a large extent, in Paris, Wilson forgot why we, the USA, got into the war in the first place--to not only defeat Germany, but to ensure than neither France nor the UK replaced Germany as the dominant power in Europe. He was hung up on his League and 14 Points and sacrificed pretty much everything we entered for in order to get the League. And the European Allies played him like a cheap violin. It, ironically, took the Republican administrations of Harding and Coolidge to move Europe and Germany back to a balanced peace, that, by the end of 1925 and early 1926, looked very, very promising. October 29, 1929, blew all that up. Looks like Putin's repeating that collapse.
Johnny Comelately (San Diego)
This raises good questions. How right was Keynes? Is the invasion of Ukraine creating a second historic example of de-globalization? Do we do better ostracizing dictatorial regimes or working with them? There's no good answers, but it's important to keep these questions in mind.
There is a reason companies work (or used to) very well with right-wing dictatorships: no labor unions and pesky organizers, no environmental or other regulations to observe (or that can't be paid off), efficient and stable government (same people to deal with), etc. Now the threat of war may be making them re-evaluate their partnerships but I doubt many will really choose anything different.
Concernicus (Hopeless, America)
The fact that most wire harnesses for cars are being made in Mexico should terrify Americans. No wire harness, no car. It's that simple---and you don't even want to think about trying to replace one. Globalization is okay for most people and great for the investor class. Building things in America would be great for most people and okay for the investor class.
Paul Plummer (Coon Rapids MN)
@Concernicus: That’s true with just about any part. Everything is interdependent these days. Personally I don’t care if a wiring harness is made in Mexico, Michigan or Ohio.
International Herb (California)
Yeah so many questions and none of them well put either. The first age of globalization that Keynes mourns was such unmitigated disaster for labor that it sparked the creation of Socialist Parties in every country in Europe that were in ascendance at the beginning of the WWI and would have soon taken over the continent if not for the war. And then there's now, where globalization has run its course anyway and in the process buried American—and British— industry, indirectly financializing the economies of both countries. An unmitigated disaster? No, this time a mitigated disaster. So will Putin destroy the World economy. There's two answers. No, and no.
seattle expat (seattle)
Not clear how cutting off Russia would have any effect on garment exporting nations like Vietnam and Bangladesh. Unlikely that any wealthy country could produce the garments as cheaply, unless massive AI automation were subsidized by q government (very unlikely). Bangladesh will be underwater long before other countries stop buying its garments, so not to worry.
Auntie Mame (NYC)
@seattle expat My oldest jeans in service are 30 plus years old and had I not tried to age them with chlorine bleach would be more intact than they are.. How much clothing does one need. When I travel unless it's cross seasons I have three max four changes. No one's problem these days is clothing.. The problem is the disposal of said clothing.
Patrice Ayme (Berkeley)
Recent Globalization Meant Plutocratization, So It has Got To Go There have been many globalizations before: unable to feed itself in small and desiccated Athica, Athens imported its wheat from the Black Sea and paid for it with high tech wares made in her factories. The city of Rome became huge. Unable to feed itself, it imported its food from overseas. Its metals, including for making currency, came from Spain, its swords and helmets were made by Gauls. However, Roman globalization soon took a sinister turn: wealthy Romans learned to escape the Roman absolute limit on wealth by fiscal optimization, overseas. When they became wealthy enough, just like Russian oligarchs, they bought back all they needed in Rome, and not just votes, but also all the arable land. Rome became an evil-power: pluto-kratia. Democrats (under this name) and Populares (Marius and his nephew Caesar) fought the plutocrats to death. In the end, after generations of massacres, the population was greatly diminished, the army took power, and gigantic immigration from the Eastern Mediterranean replaced the ancient dead Romans. The present globalization has much to do with the globalization which killed the Roman Republic and its direct democracy. Immense powers were made by the wealthiest, whose definition is that they pay little or no tax, and buy themselves politicians, laws, media, and plots all over the planet. Putin and his olgarchs are part of this evil. One must tax the plutocrats hard, worldwide!
Auntie Mame (NYC)
@Patrice Ayme One has a palazzo in the city and a villa in the country.. Wealthy Romans had farms, estates far from Rome.. Try looking up Nero and Subiacco. Italy had wonderful produce to this day.. altho it doesn't seem to travel N of Florence. Seafood in Venice and in Rome. The Roman empire expanded to Great Britain - Hadrian's Wall, Spain, France, Germany..N. AFrica, then along came the Gothic tribes but after Constantine had moved the capitol to Constantinople and made Christianity a state religion. BTW a variety of languages, different cultures in a region controlled by Roman force did not bode well for continuity. Lots of diversity.
Norm (US)
Dictatorship is not a reasonable answer to democracy's problems. Dictatorship just shoves all outside opinions under the rug. Democracy is the only way to allow people to thrive. Why did China attack our companies? Because our system allowed the to feel comfortable. Trump was an attempt to overturn Democracy in the US. It was encouraged by Putin. Sorry to say, dude (you don't deserve anything but a dude comment) your time is over. Consider yourself lucky that we don't believe in killing foreign leaders.
John (Barron)
This is only the start of the unintended consequences of this proxy war. Biden and the geniuses in the State Department and the editors and columnists of this newspaper never even thought about this. Just like the calamitous consequences of the Iraq war. And that war ultimately left hundreds of thousands dead
DaveB (Boston, MA)
@John Sure, there aren't any consequences to just letting Putin take over Ukraine. Everything would be fine, just ask John.
Bob Adolph (NJ)
A simple correction: Wire harnesses are the “wiring” for cars and many other products. These harnesses include the wire, cables, connectors, tubing, and fasteners that will be installed directly into final products like cars, computers, appliances, etc. A well managed company will have sources in both inexpensive and safe countries. Unfortunately, a single cost-cutting exercise by wrong-headed management will easily eliminate the backup (safe) sources…
McFly (NYC)
You're right, we need to make the world safer. Get your buddies in Congress to build back the military after 12 years of Obama and Trump nonsense.
h king (mke)
@McFly Righto! More money for the military that couldn't defeat the Taliban after 20 years of trying. NO money for social programs of course. Do people EVER tire of our over fed, losing war machine? Apparently not...
DaveB (Boston, MA)
@McFly We get it, McFly, after all those years of cutting the budget for the military, we should build it back. Wait, the budget has increased every year since forever, so what do have to "build it back" for?
S. A. Samad (USA)
Sir! With all humility I think Willy-nilly you have raised many more questions than answered! To begin with we must put trust in the concept of globalization and its size of potentialities as the most and only effective tools of driving away want, insufficiency, woe of war, disease and destruction from the earth surface! I confidently vouch for world will never see an end of the hunger, homelessness, illiteracy, disease despair, fight and feud unless we harness infinite human and natural resources through globalization. And genuine trust in it, particularly for the political leadership. "World has enough for human need but not enough for human greed."-Mahatma (noble soul) Gandhi. Global finance officials back in 2017 defended their efforts to promote free trade and closer international links against a rising ride of populism. The world bank president, Jim Yong Kim said "it often feels like our increasingly interconnected world is in fact falling apart and it should be understood that the IMF and world bank both represented a "part of the post-1945 world order that was predicted on the notion that what affects one city, one country and one region can have immediate and lasting impacts on us all. Putin or no Putin "political leaders are all the same world over; they promise to build a bridge even where there is no river."-Nikita Khrushchev. And W. L. George said, "war teaches us not to love our enemies, but to hate our allies."
When reading these circular arguments for what makes all politics simply economics with a healthy dose of stupid, I can't help myself from thinking the end strategy for all life is the correct one. No, I'm not looking for the exit, yet.
Rob Wilson (Norcal)
We ruined our working class by allowing China into the WTO. Now they are mad and propping up people like Trump. Meanwhile, they need jobs and they are gone.
Oracle at Delphi (Seattle)
I am confused by the headline about Putin ending the global economy. Isn't it the West which is imposing economic sanctions against Russia and disrupting the global economy?
John (Singapore)
Need to stop parading around licentious anarchy and self entitled vitriol against others as democracy and freedom respectively. It does not serve the country or humanity.
SgS (SC)
Being a proud member of the International Society of Murderous Sociopaths Putin is impervious to the universal human tethers of emotion & attachment. Of course he will trash the global economy; before breakfast and burn it at lunch. Putin is growing Russian territory while holding us all in suspended animation. I’d call that a win for the party boy. He’s probably pleased as punch with our quivering reserve being spent saving the lives of ordinary citizens to whom he assigns no value. Only Russians may determine their leadership. Unfortunately their cultural history and leaders bred nearly all democratic DNA out of existence in the general population. Keep your head and eyes down, show up for work, and don’t speak freely to anyone. Authoritarians thrive on mediocrity.
LB (Minneapolis)
Good Lord, Mr. Krugman... You need to work on detecting causal relationships. Somebody ought to give you a domino set to play with and practice on — because you’ve interpreted this backwards.
Sendero Caribe (Playa Hermosa, CR)
"Unfortunately, we’re relearning the lessons of World War I: The benefits of globalization are always at risk from the threat of war and the whims of dictators." Professor Krugman is correct to point to World War I.
Phyliss Dalmatian (Wichita, Kansas)
Or, will the Russian economy kill Putin??? Just saying.
Concernicus (Hopeless, America)
@Phyliss Dalmatian As you are aware, Putin is former KGB. He has forgotten more about coups and killings than most people ever knew. You have seen the distance he keeps from his own advisors. No one is going to get close to killing Putin. Certainly not economic conditions for the typical Russian on the street. No matter how (badly) things turn out for Ukraine, the world will be dealing with Putin for the foreseeable future. It's not just the US Secret Service that knows how to protect a President. Why do you think our 'friends' in China, India and even Mexico are sitting this one out?
XZK (San Jose, CA)
No. This is 2022 not 1914. The world will survive the shock to the system at get stronger. How this plays out for various countries, regions and economic classes will be different, and some changes will difficult for the established economic hegemony of US dollar dominated trade, but as supply chains and financial infrastructure diversify, the global economy will be for the better. Personally, I think the winners are likely to be developing countries, those poised to gain from currency diversification in trade, and those who are already adopting new and emerging technology. In broad strokes, good for China, India, SE Asia and Africa, bad for the US, Europe and their vassal clients over-invested in the current global system. US needs to prepare for an inevitable decline in US dollar dominance; the days of SWIFT are numbered, the over-reliance on economic sanctions was a tactical error that was a shot heard 'round the world.
Koala (Sydney)
"A Chinese confrontation with the West, economic or military, would be wildly irrational — but so was Russia’s invasion of Ukraine. Tellingly, the Ukraine war appears to have led to large-scale capital flight from … China" The pandemic really highlighted the global economy's reliance on China and the war in Ukraine turned up the volume. Putin was banking on Western countries with guilty consciences believing that the atrocities of WW1 & WW2 would never be repeated and the naive assumption that money making and trade would prevent violent conflict for the rest of eternity.......isn't it about time that all nations on the entire planet stopped with the Empire building. But what do you do with a mad man? Bury your head in the sand and pretend it isn't happening and hope that the orange faced narcissistic clown in the US isn't reelected in 2024. Putin will be thrilled if he is. https://www.politico.eu/article/putin-merkel-germany-scholz-foreign-policy-ukraine-war-invasion-nord-stream-2/
Tammy (Erie, PA)
@Koala "The pandemic really highlighted the global economy's reliance on China..." was an argument which Robin Wells made back during the Great Recession.
Stand4 (West Coast)
Surely we can continue to purchase clothing from Bangladesh without fear of them holding us hostage and starting a world war. But there is wisdom in knowing when we are unreasonably relying on another country to provide us with mission-critical material. Must we veer from global-supply to "made in America" wholesale? Let's protect our vulnerabilities with an available but maybe more costly backup supply -- say a more widespread mix of solar, wind, hydro and even nuclear power to avoid our need for oil and natural gas from a despotic country, but work to a balance that allows the world's economy and myriad markets to find synergy. We have to beware the potential actions of a bully, and to anticipate his/her power over us when/if we do not plan well.
reality check (ca and nyc)
Aren't sanction a form of weapon system meant to hurt our enemy? Putin's income from energy is up big time while our energy costs are going through the roof and feed inflation (cost of food production by the way is 1/3 energy costs) Food prices are projected to go up on account of fertilizer shortages and declined wheat exports from Russia and inability to export by Ukrainians and on account of rising energy costs. Cost of wheat is expected to reach 6x of previous year. Again good for Putin's exports which certainly did not decline by 6x. And a debacle for Middle East and North Africa with more instability and refugees probably not heading for Russia. So what kind of weapon system is this? Bombing campaign commenced please expect heavy casualties from friendly fire strategy?
Eddie B. (Toronto)
While reading Prof. Krugman's insightful column is always a joy, and his cautions regarding "the whims of dictators" is prudent, I have the feeling that he would write this column very differently, if he could write it a century from now. At that time, when historians write about invasion of Ukraine by Russia, they may not view that as "the whims" of a Russian dictator. They may rather see it as Russia's feral response to a series of maneuvers by powerful countries to obtain access to, and control of, those resources identified to be critical to their next industrial transition. From that perspective, one can see Iraq's invasion, followed by Syria's civil war, as the West's attempt to push Russia out of the oil/gas rich Middle East. Similarly, replacement of the pro-Russian government by a pro-US government in Ukraine, which has extremely rich mineral resources and huge gas reserves, follows the same course. And let's not forget the latest attempt to cut off Russia's control over a critical resource in Kazakhstan. As the world's largest producer of radioactive material, Kazakhstan sits on the top of the world's largest uranium deposits. To quell deadly protests posing serious challenge to the country's pro-Russian government, Putin reacted by sending its military into the streets of Nur-Sultan. The fact is, in 2022, we are too close to these events to appreciate their common treads. No doubt the events' linkage, as suggested here, could be equally off the mark.
JGSD (San Diego)
It's frightening to think that a country as advanced as Russia can't find a leader with more common sense than Putin, who, ignoring the examples of Napoleon & Hitler, starts a war IN MIDWINTER!
camper (Virginia Beach, VA)
Will Putin Kill the Global Economy? Probably not, but doomsday prophets of Krugman's ilk might.
Richard Gordon (Toronto)
@camper Actually if you read more columns by Krugman's you'd realize he is decidedly not one of the doomsday hucksters. (Plenty of those on the Internet continually promising the next great crash). He's a very levelheaded economist and has proven his detractors wrong more often than not. Keep in mind this is a morose topic, it's you cannot help but compare today's events with those of 1914 or the 1930s there are many useful lessons to be learned from history. A good economist will not pretend to predict the future but will play out various plausible scenarios. I found his column very enlightening as usual.
randomxyz (Syrinx)
Excellent article
jwgibbs (Cleveland, Ohio)
In his 1919 book “The Economic Consequences of the Peace,” John Maynard Keynes — Now look what you've done. Just mention the above economist and all the right-wing supply-side wackos will come out, after a quick attack of apoplexy, in droves.
Abraham quisling (Norwegia)
“But while China hasn’t invaded anyone (yet?)” Except Tibet.
CIP (Las Cruces, NM)
Wow! Very illuminating.
db (nyc)
In summary, globalization is great unless you ("flecklessly") globalize with the wrong people who happen to be roughly half the people on the planet.
JRO (Pgh)
The global economy and capitalism are killing EVERYTHING ON THE PLANET!
Vikram Phatak (Austin, TX)
@JRO as opposed to…?
Davey (Boston)
The war in Ukraine suggests to me what Franco's Spanish Civil War might look like if it were displayed by modern news media. The similarities are abundant.
Francisco Garriga (Saint Louis)
@Davey First: it was not Franco's civil war. There were numerous parties to the conflict. Second: Franco was not the one who got the idea to encourage the military to rebel. He was hesitant to join and was a relative underling at first. Third: Germany, Russia, and Italy became involved after the conflict started, unlike Russia has done now. The only similarity between these two deplorable events is that war leads to death, hunger, and devastation. No matter where it starts and who starts it.
There for the grace of A.I. goes I (san diego)
Will Putin Make Capitalism Work Even Harder=YES / Thank God We are not a Socialist Nation are we would be going UNDER!
Hammerin Hank (New Jersey)
Why are we coddling China as they support Putin's horrific invasion of Ukraine??? The friend of our enemy is our enemy. We all need to stop suckling at the teat of easy profits and cheap stuff from China at the expense of principle and human life. Everyone from elites to those just addicted to cheap junk, Nikes, and iPhones are complicit. But, no articles about that. Why.
Practical Realities (North of LA)
I see two things destroying our economy and those of countries around the world. One problem is the absolute lack of concern by the majority of companies for personal responsibility, ethical practices, and high standards for the work that they do. Because companies don't care, workers don't care or can't impact the decisions made and the goods produced. The results are shoddy goods that cost a great deal of money and do not last. The second problem is the looming disaster that is climate change. Food will become scarce. Water will become scarce (it is already disappearing here in the west). Temperatures will rise. Floods or wildfires will occur more and more frequently. Any income will be used to try to survive. The consumers will become the consumed. Socrates is right-- I, too, picked the wrong year to stop drinking.
Ordinary people might be better off in real terms if our economies returned to the idea that real wealth is based upon the successful utilization of real resources within local communities, in particular human energy, which is the most renewable of all energy forms. Instead, what we have seen is the arbitraging of human labor for the benefit of increasingly monopolistic capital accumulations that actually hinder entrepreneurialism, local growth and creativity. The monetary expansions required to stave off the ill effects of unbridled financial markets, and then Covid, have merely put off the day of reckoning. The US has lost much of its economic luster in the transition to a post-industrial world. Rather than take care of its people, for which it has most everything it needs - the skills, the personnel, the resources are all here in abundance - our political elites have instead consistently pandered to the crony capitalists, the ones that pay the piper. We are the architects of our own demise. We have been playing shell games with money farther than building real social wealth. We have been privatizing gains while socializing losses. Ukraine is but a piece in a bigger strategy to weaken the economic grip of the USA. Russia has a relatively small economy based on raw materials. The rise is prices must be of benefit to it. The larger energy consuming economies of the West pay a price far higher than any sanctions might impose on Russians. Do we deserve any better?
Jack Robinson (Colorado)
Globalization always has had downside risks and they used to be taken into account. But since the 80's when American business decided that "greed is good" all those concerns have given way in the pursuit of short term profits and hefty executive bonuses based on them. Societal interests have been totally abandoned in the pursuit of profits even including national security.
K.A. ER Physician (Queens NY)
Dependence on Global Supply lines killed Americans health care workers. In my clinic and elsewhere The Guardian UK: "Fauci Thanks US Health Workers for Sacrifices but Admits PPE Shortages Drove Up Death Toll" .. PPE shortages had contributed to the deaths of more than 3,600 of them”...  “Yet, like so many others, he was working without proper personal protective equipment, known as PPE. “Don’t have any PPE that has not been used,” he texted a friend. “No N95 masks – my own goggles – my own face shield.” Gabrin’s untimely death was the first fatality entered into the Lost on the Frontline database” The Guardian UK April 8 2021 The biggest advocate to outsource “labor-intensive products" Paul Krugman called opposition to it an outrage "Such moral outrage is common among the opponents of globalization--of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports" has yet to apologize for his contribution
Vikram Phatak (Austin, TX)
@K.A. ER Physician You are mixing metaphors. The PPE shortage had nothing to do with global supply chains. It was caused by the sudden (unexpected) demand. Companies in places like Texas made most of the PPE. If the government had ordered and stockpiled sufficient quantity, we would have had them when we needed them (regardless of where they were made). Or if Trump had been proactive and used the Defense Production Act to get more made…. Instead he claimed Covid was just going to disappear magically and then pushed the anti-mask nonsense so that he wouldn’t be blamed for the shortage.
ARL (Texas)
Putin did it. Whom would we blame if we did not have Putin to blame???
Bill George (Germany)
The USA and Europe share a basic understanding of capitalist reality. Except that greed has led to us inviting unstable partners to take a seat on a ship which wasn't conceived for people who know nothing about economic navigation - "sit down, you're rocking the boat!" is a cry which falls on deaf ears. Not that it's all their fault: while many capitalists have made their fortunes and given others employment and fair incomes at the same time, others have followed the maxim "Take the money and run!" - destroying the environment which had made their wealth possible (modern palm-oil production is one example). Others have made huge fortunes without producing anything at all - quite a few Russian oligarchs fall into that category. In previous centuries, English landowners discovered they could exploit the colonies by using slave labour, as did the Americans. Later the British brought the descendants of their Empire's former slaves to their home country to replace the generation of young men who had been killed in WW2 - and now the white elite bemoans the presence of "too many blacks". In fact, many of the world's socio-economic difficulties have arisen for similar reasons - out of blind greed, we interfere with complex socio-economic relationships and generate seemingly insoluble problems. Dictators (who are rarely particularly intelligent) go to war to cover their failings, making it a matter of faith to follow the Master's line (Hitler, Mussolini, Bolsonaro, Putin, Franco).
Midfleclassmanifesto (Italy Trieste)
A cohomprensive 5 year plan still lacking though. It.could be multilateralism moment. But you need intelligent and committed multilateralists. Mmmm
Ajax (Santa Fe, NM)
And war is more often than not the consequence of the whims of dictators. The Kaiser (an operetta autocrat) and the Czar (a true albeit dimwitted autocrat) shared responsibility for the outbreak of WWI. We all know who is guilty for the outbreak of WWII, but let us not forget that the invasion of Poland in 1939 was an agreed-upon two-front affair, and that Stalin's atrocities were second only to those of Hitler. And now yet another Russian autocrat is behind atrocities that bear resemblance to, for instance, the ethnic cleansing of East Prussia. I'm afraid that world security is impossible without a truly democratic Russia, and I don't know how that can be achieved.
That's What She Said (The West)
Really insightful column. Once again, a lesson is history. How can one man be so hellbent on destruction? Magnitude of suffering so horrific with monumental environmental destruction. Putin must not succeed.
Kinsale (Domme, France)
I remember back in the day when prominent writers for this very newspaper called globalization "totally irreversible" and "inevitable." And if you opposed it, you were just a fool. The earlier episode of globalization, to which the professor refers, is suggestive. There always seem to be ingenious idiots who come along to destroy the latest version of the Enlightenment's dream of a universal civilization based on human reason. It's sad because those presently living in poverty around the world, of whom there are still many, will have to wait a long time for another chance at prosperity. It also seems likely to me that those who recently escaped from poverty because of globalization may very well sink back into it. Economic autarky and global supply chains don't mix well.
Norm (US)
Yes, I talked to him.
Luk Brown (Vancouver)
Actually democracy does not guarantee absence of human rights abuses and genocide. Please consider US participation in the Atlantic slave trade and decimation of indigenous population and culture in strong democracies such as US, Canada, Australia as well as in most of the British and European colonies.
Steve Bolger (New York City)
@Luk Brown: The sun still doesn't set on Britania. The Magna Carta was an early corporate charter.
StopTheMadness (Manhattan)
Biden already did.
Paul (California)
It is the tyranny of the few. During times of prosperity tyrants emerge and they can never have enough. People like Putin and Trump. People like Putin who think they need a 476' $700 million yacht to be happy will never be happy. They need more and the whole world suffers for it. During prosperity we let our guard down, get soft and forget the next cold, calculating, narcissist with an insatiable ego and appetite will emerge to disrupt, corrupt and manipulate whatever they can for personal gain. The world will once again suffer at the hands of the few - Putin, Trump, MBS, Oligarchs, Bolsinaro, etc.
Tom Hayden (Minneapolis Mn)
And what happens to the world economy when the US turns into a one party state with a “charismatic” nationalistic leader?
Girish Kotwal (Louisville, KY)
@It's me West. You are so far west that you are falling into the Pacific ocean in criticizing India. If you have not been following the news, New Delhi has become the center of global diplomacy not NY and not DC. Just earlier today, high level officials from the USA and UK visited India on the same day that the Russian foreign minister Lavrov is visiting India. Just a couple of days ago the Chinese foreign minister visited India and so did the Japanese and Australian high level officials. Ask your self why? India's pro-peace neutrality of trying to be friends with everyone and enemies to none is even being praised by the prime minister of arch rival of India, Pakistan. Ukraine could have avoided Russian paranoia, invasion and bombardment if it had direct peace talks with Putin. After 35 days of horror, Zelenski wants to meet Putin mano to mano face to face. Ukraine did not have to endure such cruelty to its people to understand that a neutrality model similar to India's could have deterred violent Russian wrath. India has metered its response to position itself as a credible neutral mediator to achieve cease fire and comprehensive peace. The Indian foreign minister Jai Shankar has said that the European nations are only paying lip service to the US sanctions but in reality they have increased their supply of Russian oil by 15%. in a month since the invasion. So what right does US and UK have to pick on India's neutral stand and business as usual in interests of its people?
Ethan Allen (Vermont)
A country still fully committed to the maintenance of a caste system, well into the 21st century, does not warrant further comment, here or in any other context.
Steve Bolger (New York City)
@Girish Kotwal: There is no rational excuse for this war to last a minute longer. How would you like to live where Putin decrees dyslexia?
Girish Kotwal (Louisville, KY)
@Ethan Allen Vermont. India is still a largest democracy in the world and Indian constitution protects equal rights of all its citizens. 75 years since its independence, India has come a long way to greatly eliminating caste system. India is fully committed to the equality and welfare of its citizens. That said in a country of 1.3 billion people, there still are sporadic incidences of ugly violence against minorities and persons formerly considered as lower caste. Just like I disagree vehemently with those who consider USA as systemically racist, I will say with equal confidence that India is no longer systemically casteist. I don't expect anyone who has not visited India to pontificate without bias on Indian situation. I have been to every continent and I never believe everything I read in western media or follow on social media. When I worked in the tip of Africa in Cape Town, S. Africa in the early part of the 21st century, an American doctoral student and an Indian doctoral student came to work in my lab and both were told by their older members of their families to watch their backs for Zulu tribes. Not a single hair of either was harmed when I was their mentor in Cape Town. Both students are now highly successful in their careers and I get so much joy from their astounding accomplishments. Point is traveling erases prejudices and preconceived beliefs and myths. There is a universal humanity in every human being and it can only be felt by seeing it with ones own eyes.
Matt (Oakland CA)
Paul Krugman premises the question of the breakup of the present capitalist world system into competing neo-mercantilist blocs upon the notion that authoritarian states are the *only* active agents that cause this breakup. This is to toss a very flimsy veil over what can only be the actual primary cause of that breakup: The actions of Mr. Krugman's very own United States of America. That veil is easily tossed aside. For one cannot claim to be the most powerful state in the world system, with the most generally utilized currency, with the most countries allied to it, and with the world's most powerful military, and at the same time act as if this state - the USA - has absolutely nothing to do as cause of the breakup. Far be it from this ruse, the USA will have everything to do with its breakup, and will act and is acting right now as its *main cause*. Why? Summarily, because the USA, while still the premier, but no longer *leading* - "hegemonic" - world power, is nevertheless a relatively *declining* power in the present world system. China, on the other hand, has been the *rising* power within that same world system. This means that to halt China from overtaking the USA, the USA must act to *break up* a world system that benefits China. This explains why China will not favor disruptions of the present world order, including by Russia or the USA. Why should China bring an end to a good thing? Easily deduced from behind Krugman's manipulative veil!
D Creamer (Mountain West)
The hypocrisy of war is ubiquitous and indulged by all sides and observers. War is the ultimate failure of our humanity. It is a regression and a retreat from our potential into barbarism. It always creates more problems than solutions, more death than life, more suffering than peace, and more depravity than honor. The media in the current conflict du jour keep harping on Russia’s indiscriminate attacks on civilians and the use of weapons like white phosphorus. The United States used both Willy Pete (white phosphorus) and napalm indiscriminately and extensively throughout the Viet Nam war. We use them at will and have no right to complain if others follow our example. The US has never pursued peaceful solutions where it was determined that the use of force was both more profitable and against a far more inferior military capability. We have waged war against civilians and their infrastructure while claiming some higher moral purpose and justification that meant less than nothing to the dead, wounded, and homeless we left behind. Russia’s aggression against Ukraine is evil and unconscionable. So was ours against the Vietnamese, the Iraqis, and the Afghanis. War is always an evil solution to conflict. It is a failure of imagination, humanity, morality, and common sense. There are no winners and all participants and observers are left diminished and the worse for it. There is no moral high ground in war.
Tom R. (Florida)
I think it’s pretty clear that the world didn’t learn any lessons from WW1, since it allowed Hindenburg and Ludendorff to spawn the Hitlerites and continue the war as WW2. We did learn some lessons from WW2, but unfortunately nothing is permanent, and greed always leads to bad outcomes on a collective scale.
Robert, (Out West)
1. I recommend Keynes’ book very highly; I read it because of a Krugman column, and it’s a scary a book as “Dracula.” Because it pretty much tells you exactly where Germany and Austria are going, after a “peace treaty,” that included war reparations that might as well have been designed to be unpayable. 2. Before you crank up, no, it was NOT the same as what happened after the Soviet Union went boom. Yeltsin, Putin et al had everything they needed to make something grand out of Russia, and instead they chose…this. 3. And before you get all happy about the disappearance of globalization, go back and look at the first few paras of this excellent op-ed. The very first consequence will be that you will NOT have the access to everything that you have now. The second will be that things will be more pricey, and a lot of folks are going to lose the jobs that depend on imports and exports. Krugman’s starts with 1913 for a reason, you know. I thought Fukuyama was kidding himself, and yes, Virginia, trading partners in democracies do go to war. But if you REALLY want to see wars, push isolationism. Balkanize everything, get every little country arguing over resources and ethnicity. Globalism has to be regulated, sure. But these agrarian democracy fantasies—well, too late. There’s got to be some version of what Tennyson called, “the Parliament of Man/The Federation of the World,” or we are all going to get a first-hand look at our very own Kiev.
StopTheMadness (Manhattan)
Not buying from authoritarian regimes of course would include Saudi Arabia and the rest of the gulf nations, Egypt, much of Africa, and I'm sure many many more. Once you go that far, it would be awfully difficult to do business with an apartheid state as well. Is Mr. Krugman advocating isolationism?
stan continople (brooklyn)
One thing we can be sure of is that Emperor Xi has learned nothing from Putin's debacle, and the reason is that he is just so much smarter than Vladimir Putin, as his inner circle must keep telling him; an invasion of Taiwan is just as likely now as it was before. Putin learned nothing from our own "Shock and Awe" fiasco because hubris knows no bounds. If anyone learned anything, it's the Taiwanese, who'll have gained some insight on fighting an asymmetric war with a large, centrally directed foe. Bret Stephens speculated that what Putin really desires is the oil and mineral wealth of Ukraine's east, which is why he's content to kill and ravage indiscriminately. Xi wants Taiwan's microchip factories. It's a lot easier to sabotage some sophisticated machinery than whole swaths of land and mining facilities, but I'm sure the Emperor has thought this all out, ha, ha, ha.
John E. Mangan (Michigan)
Does Mr. Krugman think there actually is a CEO in the US who would trade short term profit for long term stability? Cheap labor is to corporate greed what heroin is to an addict.
James Johns (Long Island City NJ)
THE DEVIL YOU KNOW. Putin is bad enough, but there could be worse. Getting rid of any individual will be insufficient to effectuate a restructuring of the global economy. While politics may well be the art of the possible, there are always confounding factors that prevent achieving even close to what is realistically possible. Withal, there are many areas of creative ferment globally. New discoveries. New inventions. New achievements. And while it's not all good, it's also not all bad. I'm horrified by the idea that Susan Collins and her ilk are so nitwitted as to believe that Putin is capable of learning his lesson.
Arthur (Seattle)
Globalization and international trade was supposed to make for a freer, more democratic world. Guess not so much.
Barb Casino (Northshore IL)
I’m finally old enough to see the flip side of GLOBAL IS THE ONLY WAY TO GO! You know, how we only stress the positive? Uh huh. Things are more complex. Especially when you get human beings of the political persuasion involved. What could possibly go wrong?
Christopher Rossetti (Avon, CT)
Mr. Krugman, the Russian Federation took NO steps to interfere with the world economy....that was all done by your fellow travelers in Kiev, Washington, London and under pressure in Brussels. Stop disinforming the public.
Jonathan Katz (St. Louis)
Keynes was a notorious appeaser. He refused to recognize Germany's responsibility for the first war, and intent to start the second one.
RJ Bono (York. PA)
The Russian GDP is 1/10 the EU’s, 1/10 of China”s, and 1/15 of the U.S. Russia is not a big enough player to have large impacts, with the exception of gas. For gas there are some expected disruptions for sure, but any future slack will be taken up by China and India in a few years. But the war’s the thing. How long will it last? How will its outcome be affect politics, affecting economics? We just don’t know.
Stephan (N.M.)
A day late and a dollar short folks. You can't put the genie back in the bottle. The damage globalization has done to this country (The US) and the other developed nations is pretty much irreversible. The working class saw their jobs shipped overseas to benefit the rich and well connected while the politician's mealy mouthed about how there was no alternative. But the Politician's did very well out of the deal between Campaign Donations and speaking "honorariums" of 5 and 6 digits for twenty-minute speeches. Yes, we noticed. The professional Class has done well out of this arrangement and things were wonderful. The rest of us not so much. And the result of Globalization has been people turning their backs the system. Government in general, democracy in specific. Bluntly, I turned on voting there is NO point in voting it changes nothing, it means nothing. The Politicians blatantly (If legally) corrupt as they are aware who their masters are. (Hint: It's not the voters). For all the talk by both parties nothing ever gets done nothing changes for the better. Others put their faith in Trump, Brexit, the extreme right, the extreme left. Basically, anything but what we've got under the theory something anything must be better. Trump isn't an aberration he's a harbinger. And what follows? Will likely be worse. Democracy is dead folks it died on a hill called Globalization. And the Professional and Donor classes pounded the stake in its heart. And proved Democracy was & is a joke!
Norm (US)
China, you don't want to mess with me. I'll take this on. I'm not afraid.
Norm (US)
I'm not sure what is happening, but I afford you the idea that I caused it. I like the Fed's actions in announcing a percentage point rise. It's the right thing to do regardless of politics.
kirk (montana)
As usual, the professor's read is enlightening, on point, and portends a dire future with the greedy, violent Republican cult on the cusp of gaining power again. A power that they have proven will be the last time that they give a democratic election a chance to upset them in the US. Get ready for more lies that take us to war, more taxes for the middle class and more wealth for the elite as well as open racism and religious fiats. Putin was correct about the greed and corruption in the party of trump.
TR Connolly (Old Greenwich)
Excellent and timely article. Russia's recklessness, China waiting in the wings to take Taiwan, Iran and North Korea testing their missiles for the day they have the bomb, other despots leading democracies in Hungary, Turkey and the Philippines, America's manufacturing might abroad, Covid 1, 2, 3, 4, Trump still waiting in the wings to seize the Capitol with his 120 or so seditious senators and congressmen; a congress incapable of compromise or of working for the American people versus their ridiculous party loyalty, not to mention some very real problems here on the domestic front like climate change which every responsible authority is ignoring, serious drought and bigger wild fires every year in the west, the Civil War being fought again by the right supported by the likes of Graham, Hawley, Cotton, Cruz and other racists, and of course the usual suspects like homelessness and drug addiction, income inequality, tax inequality, so yes, there is a chance for globalization to fail, it is teetering on the back of a weak bond market and an overpriced stock market, and an inability of the country's leadership to get things done. My hope is that real leadership emerges in Washington. There are glimmers of hope, but DC needs a big overhaul. That would be a good place to start in the fall - a vote for doers, not talkers, doers!!!
RMS (near Los Angeles)
@TR Connolly When you complain about "Congress" you should be complaining about Congressional Republicans (and Manchsinema).
Jonathan (USA)
Expelling Russia from the world economic community would go a long way to eliminating the barbarism and savagery that have characterized Russia's behavior for the past century. Why? Because no nation will feel that it needs to express approval of Russia's atrocities in order to do business with Russia.
Ted (Ohio)
No, the Democratic administration has that covered.
Bruce Boyd (California)
Interesting. If you look at the aerial photos of Ukraine much of the wheat growing areas are ploughed and growing wheat. I don’t think we can right off Ukrainian wheat just yet.
Alan Mass (Brooklyn)
Thank you Mr. Krugman and commenters for explaining why globalization is under great threat now. I thought that the culprits were hunter Biden, George Soros and Hilary Clinton!
conesnail (east lansing)
I don't get why you think trade with countries besides China and Russia will also tank. Why would we stop trading with Bangladesh, Vietnam, South Korea, Japan, Taiwan etc.? The last four are substantially more concerned about China than we are, and have strong motivation to continue doing what they are doing. As a bonus, labor costs are lower there than in China. I still think that bailing on the TPP was one of the dumber things we've done, at least since the Iraq war. Nothing dumber than that.
Daniel Skillings (Minnesota)
If we only value OUR democracy but are not willing to help all those who wish to have a democracy too then OUR democracy is just a sham. Putin says that those purchasing Russia’s energy resources must Pay in Rubles through Russian banks and in doing so the Democracies of Europe are selling out the Ucranian people. As we have done in Latin America time and time again. We are selling our freedom for cheap destructive fossil fuels.
jwillmann (Tucson, AZ)
The world can make do without Russia (Albeit difficult, with sacrifices & adjustments...but, do-able) Russia can't make do without the world. If Putin thinks he'll acquire more 'power' by forcing his people back to the stone age, he'll be deposed.
M (NY)
No, Putin will kill Russia's economy. Every western country is going to think twice before doing business as long as he's in charge, and have or are looking for alternative solutions to any Russian deals currently in place.
AKJersey (New Jersey)
No, Putin will not kill the global economy. In actual fact, the US economy is doing extremely well under President Biden.
DG (Idaho)
What really happened in the fall of 1914 was the end of the "Gentile times" and the beginning of the "time of the end" we are now in the last of the last days and its all going to be wiped away before the Kingdom of God takes over.
Steve Bolger (New York City)
@DG: WW I was a squabble between members of a royal family. There is no such thing as a "Kingdom of God". Sentience, awareness of self, is the foam on the beer of evolution. The same millenarianism evident in your posting brought the Christian world to a grinding halt around 1000 AD. Now the 2000th anniversary of the crucifixion of Jesus looms, so many expect the Biblical Apocalypse. But it is all comic book material with no roots in science.
Impartial (Away fro D.C.)
Catastrophes come and go. Humans learn no lessons. Lessons of World wars I & I I. Unlearnt. Hiroshima. Nagasaki. Unlearnt. Pandemic. Covid ravaged globe. No global response. Wars in the Age of Globalization. Mass human displacement. UNHCR exhausted. Wheat from Ukraine and Russia. Poof. Gone. Food shortages, famine. Starvation. Disruption global supply chain. Price rise. Mass unrests globally. Global instability. Globalized. Global response. Let’s contemplate World War III.
Fred (Baltimore)
A very wonky piece on absolute advantage, comparative advantage, and the usefulness of some degree of autarky in essential goods would be in order. We need some Econ 101.
Not a word about the so-called pledge to go to carbon neutral by whatever year it was pushed it forward to. Soon enough economists will no longer be able to leave such references out of their articles covering globalization and specifically, oil consumption. It would be better if the subject could be routinely included before the stock market collapses for good.
David J (NJ)
Here’s a wonderful perspective of our reality. All the wars. All the hate. The all and everything we see, on this “mote of dust.” https://www.bbc.co.uk/news/science-environment-51491471
Kirk C (Delmar, NY)
No. The resolution of the current situation will change the global economy now, and modify the approach to globalization within a variety of industries. Watch closely natural gas, rare earth, container shipping, and, yes, semiconductors.
I think we may see "globalization" in two spheres: The liberal democratic sphere and the authoritarian sphere. My guess is that the former will be much more economically sound than the latter.
S Lawrence (Nirvana)
This is not the real era of globalization. It is the era of globalization of tax evasion. If a company manufactures AND sells a product in the US, they will be subject to taxation on all their profits. If instead, they engineer a reason to close down in the US, sell their plant and equipment at 1 cent on the dollar, they are creating a profitable tax loss. Then a "partner" is then found to run the equipment in China. The goods are then sold at a low price as they leave China and a high price as they enter the US. All the profits are "recognized" in a tax haven where the Chinese and American "partners" share the take. This explains a lot of things: 1) The very wealthy pay little or no tax. We are correctly told that they cannot be easily taxed. 2) We are told it is "impossible" to produce things here. 3) The world is awash in cash looking for things to "invest" in. 4) Pieces of fine art sell for over $100 million. All other such assets are rising much faster than "official" inflation. 5) Corporate investors are buying up most of the good housing that comes on the market. Many would rather leave it unoccupied than rent it. Until the mass of voters understand how the banking secrecy, tax havens and hidden ownership of corporations and other financial vehicles is impoverishing them, they will continue to vote for gawd, gun toys and hate rather than for their interests. The US and the UK are the main obstruction in closing down this international criminal apparatus.
Denis Montenier (Hudson, Iowa)
@S Lawrence ... To your list of "gawd, gun toys, and hate," abortion needs to be included. That said, the minority of voters driven to vote by these cultural issues are oblivious to the financial realities affecting their lives because the voices they listen to...Fox News, Newsmax, Breitbart, and most of all... the former disgraced president.. successfully brainwash them into believing liberals who oppose ownership of AR-15's, teaching sanitized American history that omits any mention of slavery, or (gawd forbid) RELIGION in the classroom, are pawns of the devil and must be defeated at the ballot box. But oligarchy, outsourcing jobs, discrimination against minorities, and corporate malfeasance? To them that is capitalism at its finest.
@S Lawrence, you are correct, but in The Global Trap by two der Spiegel journalists written a quarter of a century ago, I discovered western European countries--specifically German businessmen--were complicit, too, after the collapse of the Soviet Union.
R. Self (Pahala, Hawaii)
The world has a new powerful weapon, and the world's people must improve its use, and control its excesses. Cancel Culture, a broad form of peer and social pressure, may be the key to safety, both economically and politically. How ironic that Putin has turbo-charged this new weapon for the world to use. Take heed China, you are an important part of the world, but even China or the United States, may be subject to Cancel Culture's power, if they shock the conscience of the world's people by misdeeds. We now have the start of the world's new Governor.
Eric (Rochester, Minnesota)
As economists go, Paul K. Is one of my favorites to follow. He helps me understand the world better. But economists in general, including Dr K. I’m afraid, seem generally blind to and incapable of dealing with the environmental cliff we are all right now falling off of. I think for every word published on the subject of globalization and corporations keeping the party and the growth going, there should be another word published about unsustainable economic practices. Or maybe we should have Kevin Nealon reciting Dr. Krugman’s pieces with the word “unsustainable” inserted in a revival of subliminal man’s SNL skit where he’s talking to his boss and slipping the word “vacation” or a sexy colleague and saying “hot sex” every ten words.
RMS (near Los Angeles)
@Eric Krugman has frequently discussed climate change, both in general and vis a vis economic implications.
jimerson (Seattle)
"... countries run by strongmen who surround themselves with yes-men aren’t reliable business partners ..." Yes, isolationist dictatorships and imperial pseudo-"democracies" have always been very bad for business everywhere in the world -- especially when the "strongmen" are weak, unstable, impulsive kleptocrats whose only ambition is to seize all power and wealth for themselves, surreptitiously stealing from taxpayers while feeding them bogus "patriotic" propaganda in the name of nationalist pride. In Russia, they call it "Communism" (though it's really dictatorship). In America, they call it MAGA.
Nima (Toronto)
“But while China hasn’t invaded anyone (yet?)”. The people of Taiwan might have a different view on that one.
David (Portland, OR)
Yes, but wouldn't higher wheat prices benefit the American farmer? We're always reading how the American farmer is struggling despite being the most productive in the world. Maybe there is a silver lining in this for them. Though I do feel for the Ukrainian people and hope life can return to normal soon. As for Russia, it can remain "cancelled" until Putin is gone from power.
Kevin Cahill (87106 USA)
Krugman is right that 1913 is the relevant year, but: 1) We may stagger into a war, possibly into a nuclear war. 2) Just as the harsh treatment of Germany, which Keynes deplored, led to Hitler and WWII, so too our harsh treatment of Russia since 1991 (in particular NATO's 2008 invitation to Ukraine and Georgia) has led to the war in Ukraine. The unexamined, undebated uniformity of American political opinion on foreign policy has led to the Vietnam war, the Iraq wars, the Afghanistan war and to countless interventions in the domestic affairs of dozens of countries. We think we are right, as Madeleine Albright said, "If we have to use force, it is because we are America. We are the indispensable nation. We stand tall. We see further into the future." False, dangerous, evil, frightening.
Bryce (Atlanta)
@Kevin Cahill A few big difference between the post WWI Germany and Russia. 1. Russia hasn't had a catastrophic defeat comparable to Germany in 1918. 2. Russia has materials global demand (oil, natural gas, minerals, and wheat being noteworthy). Germany had far less in 1918. 3. Russia has not had reparations placed on it. In otherwords, if peace is reached then all that remains is to remove sanctions at the appropriate point in time. So no large payments to other governments. (While reparations to repair the damage in Ukraine would be nice, that may be something dropped in the interest of getting to an agreement).
Positively (4th Street)
@Bryce: And, 4. The dissolution of the USSR was "relatively" bloodless. Side-note; I never understood the use of the military against a school. Nor, Chechneya, for that matter.
David J. Krupp (Queens, NY)
"Putin's Russia is a gas station run by the mafia masquerading as a country." John McCain Putin's Russia is now a third rate country. If we are smart enough to temporarily get gas and oil from other sources and have crash programs to build renewable energy sources, Russia will be completly meaningless.
Ellis6 (Sequim, WA)
"The Chinese government still insists on using homegrown vaccines that don’t work very well... " I don't know, would adding the demand of China's 1.4 billion people to the supply of better vaccines be good for the rest of the world?
Earl (Madison Wisconsin)
Reglobilization, between stable countries, would reward democracy, and the rule of law.
Jimmy Singh (Singapore)
And the world needs to be made safer by the West breaking its 1990 promises not to expand NATO one inch eastwards?
larkspur (dubuque)
The key to understanding the future is acceptance that people are not 'widely rational', but deeply flawed by cultural influence, personality, and inaccurate information. Look at how many US citizens are seemingly dumb, duped, or degenerate. There is no point in sticking to models based on perfectly rational folk working in a well informed and open marketplace of millions of consumer choices from all over the world. We are all caught in the web of coping with the problems at hand with what we have in reach. We are bound by so many limitations that the system can hardly be balanced by or sustained by profit motive of business or consumer optimizations. We are beyond homeostasis of an organic model of many urges and limited allotropic control. The Fed will succeed in fixing inflation but cause unforeseen consequence as the world turns faster. Putin will fail to acquire Ukraine but leave rubble. The EU will bend to accommodate the rebuild but with the knowledge it could all be blown up again so they will isolate Russia to the point it starves, too. Some stars wink out in a massive explosion, some just cool off. Let's hope Russia's star just goes dark.
Norm (US)
I should add that I'm not joking around here. Under a Biden administration, there is a serious chance that the things I talk about might come to be. I realize I'm a big player in that despite never talking to any of them in person. Up until now, I'm just a brain in support of their ideas.
Positively (4th Street)
@Norm: "...the things I talk about might come to be." What ARE you talking about? Maybe I'd welcome the chance to agree or disagree.
Cristina (Woodside)
It’s always a give and take . There is real positive possibility here , enhanced by the pandemic , which alone , didn’t create the reaction we expected of a more cohesive and reciprocal system . All cards at the table , we are playing as many did in the past .And yet, just recycling history .
WalterZ (Ames, IA)
Mr. Krugman always seems to be straightening us out on our latest catastrophic fiscal predicament. This is merely an intellectual exercise. Let me, economic illiterate that I am, point out that the grotesque wealth gap throughout the entire world is the existential destabilizing factor for our present economic dilemma. Oligarchs and the people who prop them up (bankers, lawyers, accountants, politicians) are in control. And while oligarchs enjoy all the perks of their excess the rest of us suffer the down sides (social unrest, political disfunction, and environmental disaster). Anyone with a brain can see where this ends. Is this 2008? 1979? 1914? No, it's 2022. We've been heading to this place all along.
Aimless blade. (Seattle)
Putin didn’t start the sanctions regime. But, it looks like he found a way to reflect the damages back towards the instigators.
KM (Hanover, N.H.)
Putin has reminded us of a simple truth that every economist, policy maker, politician and talking head should know and should have always known- the world market is by definition composed of nation-states and capital and when you exclusively focus on serving the interests of mobile capital, it inevitably compromises national security. Surely, it’s the tragedy of neoliberalism that we need to be reminded today by Mr. Krugman of something that even Adam Smith well understood- “to make the world durably richer, we need to make it safer”.
John-Manuel Andriote (Atlanta, Georgia)
Beyond its oil and gas, what exactly does the world need from Russia that can't be obtained elsewhere? I'm surprised that the COVID-19 pandemic's impact on--and reassessment of--global supply chains wasn't mentioned here, as it would seem to have a far bigger impact on the global economy than the Russian assault on Ukraine.
sumyounguy (austin,tx)
Somehow we have to get to a point where one man can bring the whole world down or worse destroy the world through nuclear war.How can billions of people let this happen?Are we this powerless and stupid?
William Trainor (Rock Hall, MD)
The concept of globalization and the concept of war seem to be the poles of human behavior. We cooperate to the extent that we can send a man to the moon or develop vaccines and cure cancer. On the other hand we fight, seemingly like Chimpanzees. Is it part of out genetics? It seems that after WWII we seemed to aim for cooperation and globalization and world cooperation seemed the answer to bitter nationalism etc. Geez EU. But the Putins of the world, like Genghis Khan or Alexander, couldn't join the other kids and decided to break the game up. We seem to have a lot of Putins floating around now just like Hitler and Napoleon. Is history repeating itself? because some kind of toxic human trait exacerbated with Testosterone poisoning has let them devolve humanity toward tribal warfare again?
M. Speer (NYC)
Yes and yes.
Lance Brofman (New York)
"..It is not just a coincidence that tax cuts for the rich have preceded both the 1929 and 2007 depressions. The Revenue acts of 1926 and 1928 worked exactly as the Republican Congresses that pushed them through promised. The dramatic reductions in taxes on the upper income brackets and estates of the wealthy did indeed result in increased savings and investment. However, overinvestment (by 1929 there were over 600 automobile manufacturing companies in the USA) caused the depression that made the rich, and most everyone else, ultimately much poorer. Since 1969 there has been a tremendous shift in the tax burdens away from the rich and onto the middle class. Corporate income tax receipts, whose incidence falls entirely on the owners of corporations, were 4% of GDP then and are now less than 1%. During that same period, payroll tax rates as percent of GDP have increased dramatically. The overinvestment problem caused by the reduction in taxes on the wealthy is exacerbated by the increased tax burden on the middle class. While overinvestment creates more factories, housing and shopping centers; higher payroll taxes reduces the purchasing power of middle-class consumers.." http://seekingalpha.com/article/1543642
Pam (Alaska)
Everything that is really necessary should be manufactured in the U.S. It's fine to buy cheap clothes from China or Bangladesh. But, if we need it for safety or defense, make it here.
V N Rajan (Ridgefield, CT)
Well, it is pertinent to point out that the supply of gas through the just completed Nord Stream 2 pipeline under the Baltic sea between Russia and Germany is only suspended. The fact that the pipeline has not been torpedoed, broken up and scrapped confirms that both Germany and Russia have not totally abandoned the possibility of it's being commissioned and brought into use sooner or later and speaks volumes about Germany's readiness or, more significantly, lack of it to wean itself away from its overt reliance on gas supply from Russia for years to come!
Rufus (SF)
Unfortunately, it is a lot easier to *talk* about deglobalizing than it is to do it. And the reason is the unbridled focus on short-term self-interest which is the hallmark of American capitalism. Since analogies are in fashion today, I choose the isolationism which was rampant in the US in 1940-1941 as my analogy. France had fallen, England was on the ropes, the Soviet Union was collapsing like a row of dominos, yet the vast majority of Americans were *still* in favor of staying out of it. Similarly, today it is obvious what needs to be done, but there will be a *cost*, and most people, but especially capitalists, are adroit at rationalizing why and how the cost should be borne by someone else, anyone else. It is easy to talk in high-minded principles, but when the bill comes do, it is another matter. If Germany follows through on decoupling from Russian natural gas, I fully expect the fall of the German government, replaced by a "Germany First" flavor. Indeed, let's pull semiconductor manufacturing back onshore. When the chips are more expensive, let's see what happens. Of course, the talk comes first, so talk away. The principle is correct. But as Churchill remarked, Americans will do the right thing... after exhausting every possible alternative.
John (Upstate NY)
@Rufus Your 1940 analogy falls apart completely in the face of the most glaring difference between then and now: the presence of thousands of nuclear weapons capable of literally setting civilization back many centuries. I think that's a pretty good argument for "staying out of it" while there is any possibility of nuclear weapons coming into use. And who has the certainty about that to take the risk? BTW I don't disagree with your points regarding American capitalism.
Rufus (SF)
@John - perhaps I wasn't clear with my analogy. I wasn't advocating war in 2022. Rather that "deglobalizing" will face opposition in 2022 for the same reason that (correctly) going to war in 1941 did - people want somebody else to do the dirty work.
Jonathan (USA)
It's eighty years, and Hitler's Third Reich is still remembered as the benchmark of barbarity, inhumanity, cruelty and savagery in the modern era. Putin may not realize it now, but that's exactly how Russia will be remembered in history, with good cause. It's not just Russia's barbarous attacks on civilians in Ukraine and , it's also what Russia did in Chechnya and Syria. Russia's inhumane and barbaric destruction of Ukraine isn't a one-off, it's what Russia does.
faivel1 (NYC)
Have you read this: "Koch Industries’ valentine to Vladimir Putin" Criminal family!
Bill (New York)
I'm afraid it's too late for Valdimir Putin to kill the global economy. Joe Biden already has done that.
Tammy A (Arizona)
@Bill How has Biden done this? I’m genuinely curious.
Bill (New York)
@Tammy A, Biden's policies of hostility to US domestic energy production and overspending have kick-started inflation worldwide. The reduction in US energy production has left Europe and other countries more dependent on Russian oil, reducing leverage to end the war in Ukraine which has compounded the problem. The Biden administration is now scrambling to increase energy supply including to Europe but it's probably too late to avoid a recession in the US and worldwide.
LW (Herndon,VA)
@Bill could you elaborate
MJXS (Springfield, VA)
If the global economy takes a hit, might we be better off? If we become energy independent by going aggressively green (solar, wind, geothermal, even tidal) wouldn't that also make us more secure? Just saying, Arlington Cemetery would be a good deal smaller if we didn't need other people's oil.
Silence Dogood (Texas)
Unfortunately we will never be rid of strongmen because human nature is...well, human nature. Any society can produce them, some more than others. Democracy is the work around, but sometimes it is slow to respond because of...human nature. The Trump and Putins will always be close by hiding in the bushes of a promise of a better way and the condemnation of whatever boogeyman is in favor. And we will always let them in or at least get close enough even to disrupt or sometimes damage the body politic. Let me suggest that if businesses - and larger economies - would just say no, the strongmen would be less strong and disappear from public view much quicker. Stop sucking up to them you Fortune 500 leaders and you'll be much happier in the short and long run.
Alan (New Mexico)
Paul Krugman is worried that Vladimir Putin will "kill the global economy." Excuse me, but which side first imposed a "sanctions from hell" regime designed to strangle Russia's economy? That would be the US and its vassal nations. And which side is responding to those sanctions with whatever economic weapons it has? That would be Russia. Economic sanctions are a form of war, and there can be no doubt that the first shots in this war were fired by the "good guys." If the world economy tanks, place the blame where it belongs, squarely on the heads of the fools running US foreign policy.
Robert (Out West)
Pro tip—if you’re gonna try and play the poor, poor Vlad card, avoid words like “weapons,” and “tanks,” and “kill,” and, “shots.” They tend to remind folks of other words, like, “dead,” and, “children,” and, “war crimes.” Oh, and “kleptocratic KGB colonel with delusions of fascist grandeur.”
Buzzman69 (San Diego, CA)
@Robert - Hilarious take...
Hammerin Hank (New Jersey)
@Alan Good morning Vladimir!!
toom (somewhere)
National security demands that 10% to 20% of the manufacture of critical supplies of medication, basic materials such as screws (!) need to made in the home country. Otherwise the country cannot defend itself. But why should the country worry? The immediate cause is Putin, but in the background are the Siloviki. If Putin is gone tomorrow, Russia will try to drive the US out of Europe and eventually China will try to take over the critical electronics industries in Taiwan, S Korea and Japan. As Dean Acheson said in the 1950s, "if the US holds onto Germany and Japan, we aunbeatable." Taht is still true to day, at a minimum. This is turning into an economic fight to the finish, at a minimum.
Kalidan (NY)
Thank you for a great article. You note: "Britain managed to keep growing despite the decline in world trade after 1913." Yeah. You could have also added that this was because Britain colonized three quarters of the world, dumped goods there, sucked up all resources. An advantage it currently does not enjoy. I.e., it is likely more vulnerable now to Putin's war, and its glorious decision to exit EU, than it was to similar forces in 1913. Then you note: "To make the world durably richer, we need to make it safer." Sure. Who is this 'we'? I have infinite faith in our ability to promote peace, we have built a coalition in Europe only when Europe is literally attacked and devastated by another European nation, and that too is shaky (they are still buying Russian oil and gas). Hence your notion (make it safer) is about as meaningful to the one someone made explicit to my 22 year old self at that time: "you need to be taller, better looking, more athletic, and richer. Don't be poor, short, fat, or ugly." Very astute observations but altogether unhelpful and unlikely to be actualized.
brian martin (sun valley idaho)
@Kalidan Essentially--yet a point you've missed--is that there is a very strong correlation between security, trade and trust. Get it?
Andy (San Francisco)
Think of how vulnerable we made ourselves and how strong we made China by letting them manufacture 95% of what we consume. We should at least have struck a balance but capitalism doesn’t know balance — capitalism today is the greediest thing I’ve ever seen. We have squeezed every penny there is to squeeze, mostly at the expense of workers (shifting retirement and health care to workers, limiting their pay while Exec pay skyrocketed) and manufacturing. When we needed masks, we went to China. When we need frigging dental floss, for Pete’s sake, we go to China — regardless of their standards (remember the tainted baby formula?). We reduced inventory (supply chain crisis!) to save yet more money, and we shipped manufacturing abroad. By doing all this we fostered a two-tiered society (haves and have nots), we weakened ourselves and we strengthened countries that proved they’re not our friends. If we reverse even half of that, I think deglobilization will be a net positive; if we also trade more within our more democratic sphere, even better. We have to acknowledge, we went too far. Very few things in life work at the extreme.
Murray (NY State)
@Andy Doesn't anyone consider the effects of transporting goods on Global warming?
Andy (San Francisco)
@Murray Capitalism is short-sighted. Look at our profit reporting — every quarter. And results better be good or else. How did Amazon get to take over the world? They were privately held for a long time and got to run with no profits for an extended time, while they built everything - cloud services, the store, warehouses, etc. Capitalism’s myopia can’t see the end of the world as we know it.
Trader (Houston)
If you follow the money, you will learn who is killing America's economy. In April 2021, West Texas Intermediate (WTI crude) sold for $61 per barrel. On Mar 8, 2022, WTI sold for $123. Did the cost of pumping oil out of the ground in West Texas suddenly double? No, it did not. The oil refineries at Cushing OK hold millions of gallons of oil. When Russia attacked Ukraine, why did the oil stored in Cushing double in price? Prior to the Ukraine invasion, the largest oil and gas company share price was $61. On March 8th, that same share price skyrocketed to $91. What caused the 50% rise? Simple. Investors know that when the cost of crude rises so do oil company profits. Every existing barrel in the system creates huge profits. Basically, for that oil extracted and refined inside America, nothing changed to the input costs and that oil supplies 90% of American consumption. If we had a functional congress versus one owned and operated by big oil, big tech & pharma, we’d have price controls during wartime which is what Roosevelt did during WWII. A functional congress would ask the oil companies to serve the nation rather than plunder Americans, but we don’t have a functional congress. We have Citizen’s United that permits corporations to buy congress and do whatever they damn well choose to the American economy.
Researcher (Biloxi)
@Trader In 8 months, when republicans get control of congress, the chances of enjoying a functional congress that acts on the behalf of the public drops to zero. It will be "drill baby drill", pipelines to the tar sands in Canada so we can burn some of the filthiest crude on this planet. Based on the actions of republicans Ginni Thomas, the senators who harassed candidate Jackson, DeSantis who banned mask mandates in Florida and worst of all Trump, life as we've known it in America is about to change forever.
ZAW (Near the Gulf of Mexico in Texas)
I’m not sure it’s right to claim that Vladimir Putin is to blame for the end of Globalization. If it weren’t for his war in Ukraine, it might easily be something else to throw a wrench in global markets. . I would sooner say that Globalization has become its own worst enemy. In an endless search for profits, globalization and the globalizers behind it have done away with resilience. Manufacturers used to store materials near their factories. Then someone figured out they could make more profits if they didn’t spend money to store materials; so they went to just in time deliveries. In turn this caused their manufacturing, and sales, to come to a grinding halt with any disruptions to the global supply chain. . Not only that, but by moving manufacturing to different continents from where goods are sold, they’ve limited their options for shipping. Without an ocean to cross one can send goods by train; or ship down the coast, or barges on rivers. But if you have big, heavy things to send across the sea, your only option is an ocean going ship. And if those ships have problems, it’s difficult to reroute. . And yet still worse: countries have over-specialized their manufacturing and created monopolies - like the Ukrainian monopoly on automotive wiring harnesses for European markets. All fine and good until a dictator declares war - or there’s a natural disaster or a pandemic. Then they’re up a proverbial creek.
Steve Bolger (New York City)
@ZAW: Shipping everything back and forth around to world to assemble does not undercut the costs of manufacturing in Chinese cities where most suppliers are hand in glove with assemblers.
Kodali (VA)
I asked a friend of mine, why Singapore needs defense forces. He replied it is to ensure that investors feel safe to invest in Singapore. When China is ruled by a strong men, what made American companies rushed to invest in China. It is because of cheap labor and labor laws. China simply used mouse trap to trap American companies. It is time to reduce dependence for supply chains on strongmen ruling countries.
Rom (Virginia)
Mr. Krugman may worry about Putin killing globalization or causing stagnation. I worry that Putin may kill me. We have a president, when the threat of invasion became imminent, felt that diplomacy is to threaten the person with 6,000 nuclear tipped missiles and our address on them. Shortly after their talk, Putin invaded the Ukraine. Once there Putin reminded everyone that he had nuclear weapons. Biden then turned to name calling saying Putin is a war criminal and making a declarations that sounds to many like a call for a regime change. Then he declared that Putin's Russia will starve. It was an unusual statement for him to say, even though Putin bombed civilians, it would be Biden's sanctions that would starve millions of Russian citizens, including children and innocent babies. I find Mr. Stephens article yesterday, a possibility. when he said Putin's real goal may be the Ukrainian shores that exist close to huge quantities of oil. Maybe then Putin will seek a peace where he keeps the shores and the Ukrainians keep the rest. If that happens' there will be plenty of time to argue over stagnation or globalization.
Mitch4949 (New York)
@Rom So, if only we do what Putin says, all would be well with YOUR world?
Rom (Virginia)
@Mitch4949 No. Not even close. But I don't think threatening, name calling, soundening like Biden is calling for regime change, and threatening starvation for the Russian people will get us away from further destruction, deaths and use of nuclear weapons, is going to bring peace . It is not up to you or me. Its up to the Ukrainians to say enough is enough or saying to Putin, "forget it, were not giving up."
Steve Bolger (New York City)
@Rom: Who besides Russians sees anything to like about Putin?
Philip S. Wenz (Corvallis, Oregon)
I wish people would remember global heating in their commentaries. All aspects of globalization (or anti-globalization), trade, food shortages, poverty in the planet’s south or whatever are in the context of climate change. If we don’t “globalize” our response to that, none of the rest of this chatter will matter.
Norm (US)
To some degree I can accept an apology from economists on the virtue of it all. But mostly I want to inform the Biden administration on how to fix the system. We know how to fix it, and I suspect Biden knows as well.
Ron (out west)
Putin and the Middle east need to prepare for the world market loss in oil demand. The Saudi's have sizable money in electrification of automobiles but as usual the Russians are much slower to adopt and change because they have in Country battles with the Chechins and the Ukraine and trying to feed propaganda to their people-- they need to simplify and tell the truth and get out of being a second rate world power.
Lance Brofman (New York)
@Ron As discussed in OILK: An Energy Crunch In The Making – Needlessly, https://seekingalpha.com/article/4491182 the Biden Administration could very significantly reduce retail gasoline prices by suspending the requirement that: in order to sell a gallon of gasoline in the USA, one must purchase a renewable identification number (RIN). The obvious move would be to suspend the requirement through to November 2022. Consumers do not buy crude oil, they buy gasoline.." https://seekingalpha.com/article/4498042
Ethan Allen (Vermont)
A rather inconsistent opinion from PK here I'm afraid. While (correctly, in my opinion) classifying certain European nations as "feckless" for becoming dependent on Russian gas, he then laments the negative consequences of other nations trying to untangle their trade dependencies on authoritarian, unpredictable, geopolitical competitor states. We can't have it both ways. Say what you like about the critics of globalization (usually classified as Trumpist neanderthals), but I fail to see how allowing your own country's strategic interests in vital industrial or commercial inputs to be at the mercy of such 'unaligned' nations has ever been a smart move. Arguing that trading with them is a means of civilizing or democratizing them is a fig leaf of the most flimsy and disingenuous kind. Framing the argument in terms of unions, 'good' domestic manufacturing jobs, and the usual tropes there is also not the crux of the issue. So it's not so much a choice between democracy and money that has taken place in the past, but a choice between money and long term strategic interests. And since we know that capital(ism) doesn't ever operate in the long term, then we're talking about a consistent failure of government. Throwing around the word Treachery has become less impactful since 6 January 2021, but I think it's a valid criticism of our leaders of the last 40 years or so. There isn't just "globalization"; just like any other kind of relationship, it matters who you pick as friends.
Mitch (NYC)
@Ethan Allen You some eager to put the blame for the current state of affairs on the public sector, but I would argue that it's the private sector, always and for ever in search of lower input costs and higher profits, national strategic interests be damned, that have put us in this situation.
Ethan Allen (Vermont)
Funny, but my understanding of the US constitution is that it is our elected representatives and leaders who make our laws and government policies (including trade regulations and treaties) - what you seem to be calling the “public sector” - rather than the private sector. I can’t imagine that anyone ever voted for someone who said they would place our country at the mercy of our competitors and enemies, and yet that is what they have done.
Norm (US)
@Ethan Allen Related? This is a high-end store in Edina. MN.
Steve Hunter (seattle,wa)
This was fascinating. Maybe what the world needs is better economic balance where no region or country holds all of the cards for example Russia with its oil and Europe or the US addiction to cheap Chinese manufactured consumer goods.
Alex (Budapest)
@Steve Hunter Russian exports are oly 11% of global exports. They do not hold all the cards. The mistake is Europe's laziness and belief that Russia will play by the rules and be rational. If EU dependence was not so huge on Russia's fossil fuel it would be a lot easier to control Russian dictator/s. From the perspective of Russians what is happening is an absolute tragedy. You have a man with all the weapons in the world telling (mostly lying to convince) you what to think, feel and do. I honestly wish Washington would re-instate its dictator assassination program. Allowing dictators to get comfortable is in no one's interest.
pat (oregon)
In the least, It seems clear that we should not rely on the global economy to provide us with essential materials. We should manufacture, grow, or create those materials ourselves. And this has been made abundantly clear not only in light of Putin's war, but also as a result of supply-line failures of the COVID pandemic.
Robert Steiner (Pleasant Hill, CA)
@pat There are many upsides to eating locally-grown food and buying products made in America (or, still better, in our own communities). Saving transportation costs--and avoiding the damage transportation does to the environment--is just one example. I would like to think that, over time, localism will supplant globalism. Economists like Mr. Krugman should rethink these issues, and help us head in the right direction.
John (Iowa)
@Robert Steiner buying local actually increases the carbon footprint in many cases. Every garden you grow in the middle of a city pushes people to live farther away from city centers. Cities are best for buildings. Farms are best for farming. Farming bananas where they are cheapest to produce and shipping them to where they are not has a lower carbon footprint than growing them in hothouses in Jersey.
geister (AG, CA)
@John I'd like to hear the name of the city that has lost living space due to the planting of food in its center. We live in a suburb in a 3 bedroom house on a quarter acre lot. Of course we don't grow bananas or chocolate or coffee because even our mild coastal California climate is not suitable for those things. (Your bananas in New Jersey argument sounds like quite a rhetorical stretch to me.) But we are self-sufficient when it comes to avocados, oranges, lemons, squash; we also have cucumbers and tomatoes (for most of the year) and apples (for some of the year.) We get the rest of our vegetables from a small truck farm about a quarter mile away. No living space was lost to effect this arrangement. Look up "victory gardens" in WWII. Much more can be done to bring consumers closer to the source of their food without turning the cities into farmland.
Tara (MI)
The theory of monopoly capitalism, overproduction, and the antagonisms and internal contradictions of each national ruling class, was set out, if obliquely, by a little pamphlet published in 1848, The Communist Manifesto. The pamphlet virtually predicts WW I. The only thing it doesn't foresee is the manufacture of fraudulent capital, a feature of late 20th-century monopoly. Go talk to Bernie Madoff and he'll explain.
Robert (Out West)
The “Manifesto,” as its first sentence says, is about class struggle and its implications.
Tara (MI)
@Robert Actually, the manifesto asserts that ALL historic, organized wealth production is "class struggle." That's the philosophical breakthrough. But the manifesto is specific to capitalism and its progressions, breakdowns, and contradictions.
Cynthia Adams (Illinois)
Americans shop for entertainment, endlessly resupplying ourselves with unneeded extra tennis shoes, kitchen gadgets, and redundant clothing to stay fashionable. Inflation could be managed in a month if we all would just stop buying unnecessary extra stuff. Declare a moratorium on shopping. Reduce demand and leave the products for those who really need them. How many things can one person use?
@Cynthia Adams People do stop buying those things when their budgets are tight, the problem is the price increase for the items we can't stop buying like utilities, food, and gas for our cars. My energy bill tripled this month in part due to the situation in the Ukraine (even though I pay for "green energy" that's supposed to come from local wind and solar). How would curbing my online clothes shopping help that?
Observer 47 (Cleveland, OH)
@Cynthia Adams BRAVO!
Ted Weesner (Portland Oregon)
While I don’t always agree with Mr. Krugman, I usually enjoy reading him. This is one of those times. I think this overestimates Russia’s importance in the world economy. Even removing it totally will at worst reduce global availability of petroleum products and eliminate a moderately important market for manufactured products. The global economy might have some instability but could heal from this wound. When you consider the benefits: This could drive more use of renewable energy, especially in Europe It could increase local, and decrease greenhouse gas producing global, trade Decrease the influence of Russian (and non-Russian) oligarchs, as well as Putin himself This could be relatively low economic pain for long term gain. I don’t believe Russia could send us into a global tailspin.
J c (Ma)
@Ted Weesner Long term, I agree, but short/medium term the impact would be basically incalculable in eg Germany. How will their economy not utterly crash if they cannot get russian gas? An economic crash of Germany would precipitate all sorts of economic issues globally, and would create immense political upheaval. Germany shut down their nuclear plants before they had secured reliable non-Russian gas. That was an epic mistake.
Observer 47 (Cleveland, OH)
@Ted Weesner Agree about the drive for renewables. But wheat exports are crucial; if lack of these exports causes widespread hunger, everything else is moot.
She (Miami,FL)
@Ted Weesner:"I think this overestimates Russia's importance in the world economy." I agree. Further, I believe Russia is being used as a convenient scapegoat for out of control inflation that was heralded during the global pandemic, but has become worse in our country for reasons other than Putin.Granted, the declining U.S. share of worldwide GDP has been boosted somewhat lately, based on America's recent emergence as a reliable military partner (NATO) as well as trading partner.
Abraham quisling (Norwegia)
The benefits of globalization? What benefits exactly. I would like to see those those spelled out and backed up with numbers. I see the rootless global elites benefiting, I see large multinationals and their wealthy shareholders benefiting (the vast majority of shares are held by rich people). I don’t see the middle class benefiting and certainly blue collar workers whose jobs have gone to China and Mexico have not benefitted. And what exactly is the result of the alienation of blue collar workers? I’ll give you one guess. Sure, I can pay a couple thousand bucks less for a new car, but at what cost to society? Not a good deal in my view.
Hieronymous Bosch (Antarctica)
@Abraham quisling It wasn't just price. Remember the made-in-USA clunkers of the 70s? Globalization may have a negative side, but so do protected home markets.
TomG (DC)
@Abraham quisling: Many emerging market economies have benefited, and have strengthened (or created) their own middle classes.
Bob (Portland)
One big question is, how long will this last? The next question is, will we live through a period like the one between WWI & WWII? So, things could get worse with furthur isolation of both the East & West & phobic, isolationist governments breaking out on both sides. Trumpism? America First? There you go.
asg21 (Denver)
"For example, those who had studied past banking crises had a much better grasp of what was happening in 2008 than those who hadn’t. But there’s always the question of which analogy to choose." Hard to argue with this, but a somewhat different point of view is the basis of the excellent "In the Light of What we Know" by Zia Haider Rahman.
George (Hungary)
@asg21 I am not familiar with Rahman's book, but I do know that historical analogies have proven very durable and comforting for armchair pundits. (Among whom I do not casually include Krugman, as he himself advances 1914 cautiously here.) The Korean and Vietnam wars were fought based on the Munich analogy, followed by a generation of thinking that any military intervention was a potential Vietnam; the Iraq War was predicated on a kind of flimsy Munich 2.0. Analogies are useful, but not as a way of avoiding the messy facts of the moment. Worth noting, though, is that compared with the war analogies listed, Krugman's is over 100 years old, which seems to me a little more appropriate for reconsideration. Historical cycles seldom follow convenient20-30 year cycles; centennial measurements seem a little more credible (if harder to relate to).
Boston Barry (Framingham, MA)
We should also be careful in assigning causality to a nation (Russia) that has the GDP of Italy or Texas. An inspection of historic inflation rates shows rates in the teens after both world wars. The wars disrupted personal consumption, just as the COVID epidemic. The event that is driving our economy is COVID and our recovery from its effects, not a small war in Ukraine. The US has the lowest unemployment rate in decades. The economy is growing at a faster rate than in the recent past, too. Yet the focus has been on the resultant inflation. Why is that? An effective Republican attack on Democrats. The issue of globalization has also been politicized. We had a President who had no concept of economics, much less international economics. He blamed other countries, particularly China, for America's loss of "men's jobs". The Democrats were helpless as working Americans took up the belief that foreigners were stealing our jobs, rather than CEO's searching for the low cost provider. American management also embraced first "just in time" purchasing and then single source providers in an attempt to lower costs and raise profits. Both tactics increased the fragility of our economic system. Now that supplies are no longer plentiful nor guaranteed, both tactics are under review. We should be careful in assigning blame for inflation. A gasoline price rise of 25% is not unusual and is certainly not the 4X rise seen in the mid-70's after the oil embargo on the US.
She (Miami,FL)
@Boston Barry:" We should be careful in assigning blame for inflation." I agree. We're scapegoating Russia to deflect from the real reasons behind the inflation in our country which is comparatively greater than others, for reasons that go beyond the global pandemic and Putin. Re: "Yet the focus has been on the resultant inflation. Why is that? An effective Republican attack on Democrats." Disagree. Ordinary people are struggling to pay grocery bills and medical bills. Raising wages will not help but only make inflation worse, especially for those on social security and fixed pensions.
Boston Barry (Framingham, MA)
@She This is how the effective Republican narrative works. When prices rise, it is always easy find someone complaining about it. No one likes higher prices. The truth is that many more people are working now than only a few months ago. We know that because hiring and economic activity is way up. It's much harder to find a sound byte of "I just got my job back" from someone filling their tank. More people have more money, but factories take time to ramp up production. It takes time to hire people for service jobs. Eco 101 tells us that rising demand and low supply leads to higher prices. We still have not reached inflation rates that occurred after both world wars. Ordinary people are always struggling to pay expenses when when workers are at a persistent bargaining disadvantage to large corporations. Inflation hurts bond and annuity (pensions) owners. Social Security is indexed for inflation annually. PS Rising wages are a symptom, not a cause of inflation, or more accurately, inflation is defined as a rise in prices and wages.
kyle (pa)
It will seriously damage Ukraine Economics. Then, it will damage Euro economics. Then, it will mess up the world supply chain. USA is benefitting from the war now. While USA leading the world to MY COUNTRY FIRST, the world is hard to control the damage in the long term. Today's world is a selfish world. Global economy is a global field. There will no multri-trust among counties. All countries will try to protect their own interest including financial and economic. The world will be segmented.
Imagine (Scarsdale, NY)
The US is hurting less from the war, not benefiting from it.
Jackson (Virginia)
@kyle How are we benefiting from the war?
Guillermo (Buenos Aires)
Economists of all ideologies tend to simplify history by reducing it to economic problems. A situation as complex as the current one is very different from all the previous ones, including the one before the First World War. I do not agree with Marx and Hegel that history repeats itself twice, once as tragedy and once as parody. The current situation is very complex. There is a military power, with great natural resources that wants to recover its old empire and that wants to impose a new course on the Russian people with new Feudal Lords, its oligarchs, with businesses very different from the old tsarist nobles. Puttin, his generals and his oligarchs want to reach 4.0 by taking over the technology by militarily conquering the countries of Eastern Europe, just as Stalin did in 1945 when he captured a large number of German scientists and engineers and transferred entire plants to the Soviet Union and a large amount of natural resources.
She (Miami,FL)
@Guillermo Disagree with this Manichean perspective of an evil, imperialistic Russia trying to reclaim its empire, lost in the 90s, or comparison to a Darth Vader like Stalin. Putin not part of the newly minted billionaire class; rather, he is at odds with the new capitalists who accrued their money during the time Russia just tried capitalism, but without the safeguards in place, the business world in Russia devolving into a kleptocracy. Subscribe more to the perspective of world politics based on Thucidides' History of the Peloponnesian War, or Martin Wight's perspective (L.S.E. "Power Politics") or Mearsheimer in more recent times.
John Williams (Petrolia, CA)
Economists, even economists like Krugman, seem not to be able to integrate global warming into their thinking. Trade is not necessarily bad in that light, but there is a penalty to moving things around that needs more attention.
J c (Ma)
@John Williams It's only a problem because those benefitting from the moving things around do not pay the costs of the moving things around. A carbon tax would nicely put a market-price on goods made locally vs "globally." I believe I ought to pay for what I get. That's why I'm for a carbon tax. Those that are against one think they ought to get something for nothing. That used to be called stealing, I guess we now call that "externalizing costs."
Anam Cara (Beyond the Pale)
How long before the EU stops investing in the U.S. given we are now classified as an anocracy - a backsliding democracy with only a one and four chance of reversing the trend.
Uzi (SC)
" Unfortunately, we’re relearning the lessons of World War I: The benefits of globalization are always at risk from the threat of war and the whims of dictators. To make the world durably richer, we need to make it safer." An interesting article by professor Krugman with insights on the global economy post Ukraine's conflict. Three comments. First, commodity-exporting countries will do fine as China increases the demand for foodstuff, strategic minerals, and energy. In South America, the balance of payments of both Argentina and Brazil continue in surplus. Second, regardless of whether or not globalization is fractured, advanced economies will be competing in the knowledge-based economy. Technology dictates military strength. Third, the definition of a safer world is relative. As long as military nations wage war against weak ones, the world cannot be safer.
Hanniel (Manila)
Just switch to renewable and buy local. I say let the pendulum swing away from globalisation until Russia and China learn to play by the rules and the West learns a little bit of contentment. Maybe then we can rebuild a fairer and less ravenous global economy.
lalucky (Seattle)
@Hanniel YES! How can we possibly continue to have hundreds or thousands of container ships spewing diesel out into our oceans? And how can we continue the millions of flights using highly polluting jet fuel? For those who've already experienced the terrors of extreme climate change, what we currently think of as 'globalization' must change in order to save our environment.
FJAD (Cumberland, Ohio)
Cheap Oil made Globalization possible. How else could one use cheap labor on the other side of the planet to replace locally made goods? It was also, going to melt Iron Curtains and liberalize Asia. It may have succeeded, if oil was priced from the beginning to include carbon's costs. Maybe, the scale of Globalization would have been a smaller more sustainable footprint, with fewer World scale despots.
cmd (us)
@FJAD Less cheap oil than shipping containers and the economies of scale for *huge* transport ships. This lowered the barrier to access cheap labor anywhere in the world. China was ready at the right time, but its growing middle class is about to price it out of the market.
Krugman gives no data on how much capital has been withdrawn out of China. In fact, the link provided by Krugman staes that it is too early to say if it is a trend (moving capital from China). Besides, China has a 3.1 Trillion sovereign capital fund that no other country can match. And Krugman's worry about Bangladesh slipping back into disastrous poverty is not only misplaced but also an imaginary story with no basis. his assertion that Wealthy advanced nations (I guess US, Canada, Australia, Western Europe), will only become slightly poorer is based on what kind of economic data? Has Krugman been unaware that the economic growth has already shifted to Asia? Asia has two of the world's largest economies (number one and number three) not to mention Japan and South Korea, Indonesia, et al, and has the population size so large that it doesn't even have to deal with Europe or US. The so called wealthy developed countries of the West and North America have unbearable levels of external debt (2-4 times larger than their GDPs) and their currencies are not backed by Gold or any such real assets. We, living in these wealthy developed countries have to worry much about losing our standard of living especially if Dollar and Euro lose their status as global reserve currencies. Our own well known investor class has been shouting loud about this potentially impending calamity.
Mostly (Henderson, NV)
The important distinction between 1913 and today is climate change. Also the ship owners are tasting lavish profits they will not be eager to give up, erasing much of the price advantage low income countries and China enjoyed.
Norm (US)
While we're at it, why don't we talk again about what Harris has talked about regarding Mexico. The only way to solve the immigration problem is to help Mexico become a reasonable place to live again. We trade food for drugs with Mexico. NAFTA was horribly designed, and Trump didn't make it any better. The biggest mistake? Allowing food supplies to be corrupted. If food and/or water supplies are corrupt, everyone will be corrupt. We need to gradually shift NAFTA from providing food to Mexico to providing things like fertilizer and desalination equipment. It's pretty simple once we realize the problem.
joel bergsman (st leonard md)
@Norm Norm, I think that you don't understand NAFTA. The goal of the US in that effort was to create a more stable and profitable Mexican economy, to provide more investment, and good jobs, in Mexico for Mexicans, and thus to reduce incentives for Mexicans to migrate to the US. And in general to make its southern neighbor more prosperous. Nothing to do with trade in foods, which is mostly in the direction from Mexico to the US, not the other way around. The World Bank, in which the US is not without influence, provided lots of funds for irrigation in Mexico for many decades, and as far as I know may still be doing it. Desalination remains much, much too expensive to provide water for irrigation unless it is hightly subsidized. Please check on where you are getting your information.
Norm (US)
@joel bergsman This is the the administrative propaganda surrounding NAFTA. The fact that you include a statement of the 'goal' is proof. You can have a goal, anyone can have a goal, but if the means to that goal are counterproductive, it's nothing but propaganda. The goal is irrelevant. It didn't work, and in fact it worked the opposite of what was intended.
lalucky (Seattle)
@joel bergsman Wow, what arepetition of the official line. What NAFTA did at the beginning was to swamp Mexico with cheap American agricultural imports and wipe out small, sustainable operations of local farmers. Then, as we "outsourced" jobs, hundreds of businesses sprung up along the Southern border, but most of them pay poorly and keep workers in a kind of wage slavery. There are two ways Mexico benefits from its the U.S. - the amount of American tourism, and the amount of 'remittances' sent home from those working in the U.S., which are estimated to be up to 1/3 of Mexico's budget. Those two activities have little to do with NAFTA, except for the number of people who want to leave Mexico.
trblmkr (NYC)
I love you, Paul but you seem to have a blind spot on globalization. Europe should never have allowed itself to become so dependent on Russian energy. The world should never put so many production eggs in the China basket. Being a member of the “free” trade club should have been an earned privilege, not an end in itself. The US should have not betrayed Mexico and NAFTA in favor of China when it came to FDI. Why did we favor an authoritarian country across an ocean over a nascent democracy on our border? Cross border supply chains? Fine. But not with antithetical regimes.
DonB (Massachusetts)
@trblmkr Following the laissez-faire approach of Republicans, FDI was the individual choice of various corporations to do business in China with its strict limits on FDI, where they could not own more than 49% of any company operating on Chinese soil and almost always had to disclose a lot of the technology the investing company was using in China. Many U.S. corporations chose to agree , believing that new technology developed from basic science funded by U.S. taxpayers would keep them ahead of the Chinese. They went for the immediate profits over the long-term stability. The only times the government intervened was the few times Chinese companies tried to buy technology with military/security ramifications, which was seldom. It is likely that the costs of training workers may have been lower in China versus Mexico, or maybe the drug trafficking? Certainly from a U.S. government point of view having a stronger middle class in Mexico would/should be of a higher priority, but Republicans would not use the government to achieve that choice.
Joe Runciter (Santa Fe, NM)
@trblmkr Nixon's much celebrated "opening to China" was a mistake then, as I thought then. It sounded reasonable that tying the world's nations together with trade agreements would tend to erase some of the political differences between nations. It did, but in the wrong direction. Instead of China becoming more democratic, the US has become even more of an oligarchy, and more authoritarian. And the same trend is clearly true for China. Could it be that so-called "free trade" has an inevitable negative impact on democracy?
solitaire (earth)
@trblmkr ... did you read the article? "Europe should never have allowed itself to become so dependent on Russian energy. The world should never put so many production eggs in the China basket." He addressed that. Look for the word "feckless" in the text.
Norm (US)
Many of us have possible solutions to our problems. One person that made a notable impact that needs to be considered was David Graeber. He understood the negative sociological impact of globalization as it was implemented over the last century. We need to consider these ideas as we try to move forward.
Luk Brown (Vancouver)
Strive for self-sufficiency in most of the essentials and vigorous trade in the non-essential area after the basics of food, shelter, and medical is achieved. First step would be to move toward the 100 mile diet, at least for life's staples.
Keith (Merced)
I worry for a son-in-law who works for a profitable Chinese company along with millions of others who may lose their careers, but what I fear most with dismantling global trade is the international strife that will probably follow like 1914.
Aubrey (Alabama)
I have been tremendously disappointed by many in corporate American and people who should know better who support the republican right wing. Donald and some of the right-wingers are Putin-want-to-bes who want what they want when they want it in disregard of facts, law, etc. As the Good Professor mentions, the very basis of the American and many western economies is the rule of law, independent courts, regard for contracts, facts, science, etc. Biden does somethings that I disagree with, but he does support law, honest elections, facts, etc. On the future of globalization. People forget that the economy and trade (like other markets) have minds of their own. The way people live and work and trade is determined largely by technology and economics. Communication, travel, shipping, is cheaper and easier than ever and we are in a global economy. At the moment, the world's central banker is the United States Federal Reserve System. So, globalization might hit a few speed bumps and will change over time, but globalization is here to stay. Ukraine wants to join the world economy and would welcome the changes which that brings -- less corruption, rule of law, individual freedom, etc. But Putin does want to join because he and the oligarchs would lose control of the Russian court system, the Russian economy, etc. Russia would become much richer but Putin would lose control. Best wishes.
Stephan (N.M.)
@Aubrey Law in this country & in trade agreements for that matter. Is written by and benefits ONLY the rich. Law in the US or International Law, (Which NO nation obeys) is sick sorry joke.
Aubrey (Alabama)
@Aubrey Correction: In last paragraph, it should say "But Putin does not want to join. . . " Thanks,
Jorge (Texas)
You describe the world as if the US is just sitting here minding its own business. It is not. It actively participates in all conflicts since WW2. The US sanction regime is causing a great deal of todays economic problems.
James (Dallas)
Granted that sanctions regimes can be blunt instruments, what do you propose we do instead to effect change in situations such as the Russo-Ukraine war? Nothing? Use of force? More targeted sanctions somehow?
larkspur (dubuque)
@Jorge We have to work with the tools at hand for reasonable goals. It is not reasonable to just let Putin take Ukraine with zero consequence. He was emboldened by the lack of consequence in Syria and other zones of destruction. As for participation in all conflicts, I can think of genocide in Rwanda and Myonmar with no US intervention as millions were burned out or whacked with machetes. At some point you have to draw a line no matter what it costs because the world without lines is worse.
solitaire (earth)
@Jorge ... how, exactly? Please provide sources so we can understand what you mean. We impose sanctions on Iran for good reasons, and unless you've been living in a cave for the past 8 years, the sanctions on Russia need no explanation. Most of the countries against whom we impose sanctions are pariah states. You might find some benefit in reviewing the info at this link: https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information
M. Garrett (California)
Think of economic globalization and economic localization as two ends of an economic balance beam. If we don't shore up our local economies (city/county/region) and make them strong through import substitution (grow food locally for example), the global economy becomes too large and it's imbalanced, which causes much of the harm we see now in over reliance on it working to fill the void of local economies failing. The economy serves humans, all humans, to live a life free from relentless striving and is intended to produce a life that creates some measure of joy and pleasure with the time to experience it. We know the imbalance exists because of income inequality—tiny percents of the population holding the majority of wealth and freedom while increasing numbers of middle and lower income populations experience incremental loss over time. This trend is worsening every day. This period is very much like the pre-WWI conditions following a 35-year explosion of industrial revolution activity. For chrissakes, over half the population didn't brush their teeth daily at the turn of the 20th century. We were suddenly wealthy and learning to brush our teeth. That was because we didn't understand the connection between dental hygiene and health. What are we not seeing clearly now that is the equivalent of something that simple?
C (New York, N.Y.)
For globalization on a massive scale, that robs the US worker of wage leverage, I say good riddance. Instead of lamenting cheap textiles, perhaps Krugman could investigate how poor nations could grow their economy without foreign exploitation, exports, which promotes a race to the bottom of wage scales everywhere. Krugman writes: "And while there were important downsides to globalization as we knew it," Good to know that Paul Krugman, who won a Nobel Prize for studying global trade, considers the destruction of American manufacturing jobs, destruction of organized labor's economic and political power, the ripple effects that lowered or suppressed wages of the majority of the workforce for decades, the lasting effects on income distribution, income inequality, not to mention the devastation to Mexican farmers caused by NAFTA, are considered important downsides. Previous to China and Mexico, Japanese imports made mincemeat out of the domestic car market, since reliability and economy were never the priority of US auto executives. So global economy, good for car consumers, but only because big auto in the US is insulated from market forces, and still true today, with the exception of some pressure from Tesla at the very high end.
DonB (Massachusetts)
@C There were at least some Democrats who recognized the problems with NAFTA, which was written by the George H.W. Bush administration and agreed to by other countries and presented to the Clinton administration for signature or veto. Clinton did decide to sign, but I believe he recognized at least some of the problems, but with getting a tax raise and then trying for health care insurance, the midterm elections put the House in the control of Republicans and then he had all he could handle trying to keep their worst ideas on "welfare reform" from being implemented. The eventual welfare bill that he finally agreed to sign, with a statement about fixing some problems with it, appeared to work, but only because of the strong job growth associated with the economic recovery from the Reagan-Bush recession of 1990. But once Republicans had control of Congress there was not a scintilla of a chance to fix any of those problems. Certainly, many workers who lost manufacturing jobs were not exactly happy to consider training for new jobs, like controlling or maintaining the robots which were replacing them in the repetitive jobs that were the cause of the most job loss. Remember, this country still manufactures more goods than it did before NAFTA, just with fewer workers. The movement of assembly jobs to Mexico or elsewhere does get most or all of the publicity, but it is a small part of the total manufacturing job loss. Note that many workers were unhappy about retraining.
canyon lark (San Francisco)
Globalization without labor power has been a disaster for many American workers. Becoming shoppers of the world has not compensated for a drop in opportunity and stagnant wages. Economists have done a real disservice to America by being globalization advocates. In the long run it will reduce the credibility of the profession.
DonB (Massachusetts)
@canyon lark It is not so much that economists advocated globalization as that politicians, particularly Republicans (without a strong opposition from Democrats) refused to ensure the gains from that globalization were distributed equitably among all those affected by that globalization. In particular, the top levels of management were allowed to take huge "golden parachutes" after taking companies private by issuing bonds that the companies had little likelihood of paying interest on, etc., leaving the workers without the pensions that they had been entitled to. The wealthy basically stripped good companies of their ability to continue in business when there was no need, but unrelated things like NAFTA could be blamed.
rangraj (india)
"On the eve of World War I, he wrote, an inhabitant of London could easily order “the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep.” I'd venture to say that that was not the narrative of a global economy, Dr Krugman, but that of a colonising country. I'm fairly sure that all the people who were colonised would not take much satisfaction from what Dr Keynes was celebrating.
Bruce Williams (Chicago)
@rangraj Read the trilogy on the British Empier by Morris. It's not that simple.
solitaire (earth)
@rangraj ... globalization made possible by colonization. Is today any different? Ask the slaves who mine gold and other metals in the DRC, or the virtual slave labor making our clothes in Bangladesh. Or how about the worldwide human trafficking industry?
@solitaire On the contrary, "Globalization" is a misnomer. This word is coined to misrepresent colonization and enslavement. Since "Colonization" has negative connotation, it is replaced by "Globalization".
USS Johnston (New Jersey)
I have to believe that having lost his attempt at taking over the Ukraine, Putin is now trying to salvage a "win" by trying to take down the prosperity of the West by undermining its globalization. His misery loves company. And by driving up worldwide inflation, Putin will be helping authoritarian Republicans in the U.S. to take complete control of our government. There is nothing Putin would like better than to have friendly allies in America. But will Americans, tired of the high price of gas and other products, surrender to authoritarian rule? What price a person's soul? We will find out.
@USS Johnston Sanctions, imposed by the West, are the root cause of the impending economic downturn of the kind we have not faced before. It is not Russia that has weaponized currency and trade but it is us. The Ruble has already regained its pre-war value. Our celebration of having dealt a death blow to Ruble is short lived. We have already succeeded in alerting much of the world that its assets in the west are risky and they are fast preparing to have their own reserve currencies and their own SWIFT system. Who loses and who gains by our shooting ourselves in the foot? Europe is in a precarious state if Russian oil and gas supplies are cut short. And that is impending! Let us focus on protecting or
It's me (West)
@SR The natural gas price has been increasing for months. We didn't start the economic war either.
@It's me In the least we have escalated the already bad situation with our "Sanctions" which is really the Economic War. We started it.
A guy afraid to make religious comments. (Charleston SC)
You use a term I think is misused for a society based on just laws, saying a nation is a nation of laws ignores the question of who's laws and are they reasonable and just. You could lead the way to finding better ways of describing this issue.
DonB (Massachusetts)
@A guy afraid to make religious comments. I think the term, "a world living under law," is good for business and economic growth versus the term, "rule of an arbitrary tyrant," irrespective of how just that law may be because of its predictability. When that law is unjust to a level that growing unhappiness spreads across the populace, then there is the problem of polarization when the populace is not educated enough to be able to recognize the charlatans tearing at the fabric of the country and polarization sets in where the whole country can spiral down into economic failure and chaos. So first comes the need to agree to obey a legal structure and then comes the need to make that structure fair and just for all, so that everyone feels able to do their best to earn a decent living and be respected for their contributions. Clearly to get a legal structure accepted, it must appear to be fair to enough people, or at least as fair as possible in the circumstances, with the possibility that it can be made fairer over time. That is why I think Professor Krugman is on good grounds to use that term. He has often pointed out what he feels are important improvements that would make the system fairer and more just.
Jim Kinateder (Roseburg, Oregon)
I have not understood why the US did not promote more manufacturing in South America as opposed to China. I suppose it was just easier to let the Chinese take care of all of the problems that were involved in China's becoming the world's manufacturer.
solitaire (earth)
@Jim Kinateder ... because most South American countries were politcally unstable? And why? Because we were busy overthrowing their communist-leaning governments instead of finding ways to help them build their economies. Meanwhile, China, which had a several-thousand-year history of economic success (prior to a recent period of stagnation and domination by Japan) just decided to become an economic powerhouse and bring millions out of poverty through massive industrialization. These days no one says to children who won't eat their spinach, "there are millions of starving children in China who would love to have your food!"
Don (Honolulu)
@Jim Kinateder China has a population of 1B, 300K. Big enough to be it's own market & for the most part speaking 1 language. All unified under one government that brooks no opposition. The rest of the world needs to accommodate them, not vice versa. Comparisons of Taiwan with Ukraine are off the mark. Taiwan was historically Chinese as was Hong Kong.
Bruce Williams (Chicago)
@Jim Kinateder China developed itself. That attracted financing.
leo (connecticut)
The first wave of "globalization" circa 1914 collapsed after the European nations, which had waged relentless, merciless wars on the indigenous peoples of their colonies, turned their weaponry upon each other - with disastrous results for themselves and much of the world. That earlier European economic "progress" was made possible by the financial exploitation of those overseas colonies as Marx had correctly predicted. That mercantile system enabled the Londoner mentioned by Mr. Krugman to "easily order" consumer products wrought from the labor and raw materials of victimized countries - in an early, more primitive 20th century version of Amazon. Agree with Mr. Krugman that we need to learn to make the world safer - not just for global trade - but for our very survival. As Russia and the West threaten with nuclear weapons, we must not "sleepwalk" to this particular Armageddon.
Carine (Brussels)
There is also another solution as degrowth is the future.
John Morton (Florida)
To me it sounds like more of a return to the Cold War than to 1914. Not that that is anything to celebrate
Bruce Niven (Saudi Arabia)
So yes some of the globalization of manufacturing, in particular outsourcing of manufacturing to low cost countries is coming under threat. But I believe we have a snowballing trend in the opposite direction post-COVID in the form of remote work and Zoom etc. It is now pretty much accepted that most forms of knowledge work can be done remotely. So far this has meant people staying out of city center offices and moving to the suburbs, with a few pioneering the 'digital nomad' lifestyle. But it won't be long before businesses start realizing that if they can have a programmer working remotely from their San Francisco office, that someone well qualified in Mexico or Belize can do the same job, or in Budapest for that matter. We are about to enter a counterveiling wave of globalization of knowledge work, while physical supply chains may be being brought closer to home.
Barbara (Kennewick, WA)
@Bruce Niven I agree with you; when it comes to computer programmers that specific outsourcing already began years ago
It's me (West)
@Bruce Niven That is what needs to be regulated. When they dismiss to hire somewhere or outsource, it should be prevented. Those money are going away and not coming back. Instead, they should be looking at the money they can already save by reducing the size of premises and the huge running costs linked to the keep the buildings up and running. Especially now that the energy prices are surging. It will also help residential housing offers if some of those buildings are converted.
M Martínez (Miami)
West Germany showed us how to recover an economy devastated by World War 2. Volkswagen Beetle, Mercedes-Benz, BMW and other brands were the engines of the German recovery. Americans are anxious to buy electric cars. Both the high price of gasoline and the negative consequences of fossil fuels have a dramatic impact in the minds of consumers. On the other hand, the solar energy industry also has a huge market potential. Just for starters. Fast and furious consumers are speaking loud! The economy is roaring despite high inflation levels. We are optimistic.
John Morton (Florida)
@M Martínez Electric cars have been available for about a decade and still only represent 1% of cars. Where to you see signs of demand?
Don (Honolulu)
@John Morton See how long the wait lists are for electric cars. I live in a 60 year old Condo that just authorized researching cost of installing electric chargers in each parking stall.
solitaire (earth)
@M Martínez ... the VW came out of the Nazi era, FYI. It was Hitler's brainchild. https://encyclopedia.ushmm.org/content/en/article/volkswagen-1 "Like many other industries, automobile manufacturing in Germany was strongly influenced by the Nazi regime. Mirroring the regime’s antisemitic policies, the German General Automobile Club ADAC (Allgemeiner Deutscher Automobil-Club e.V., or ADAC) expelled Jewish members in 1933. Jews were deprived of the right to drive automobiles after Kristallnacht in 1938. Car ownership and travel were intended to be another part of the Nazi vision of the Volksgemeinschaft (People’s Community). In 1942, propaganda minister Joseph Goebbels described the future of Germany as that of "a happy people in a country full of blossoming beauty, traversed by the silver ribbons of wide roads, which are open to the modest car for the small man." Mirroring this aim, the Nazi “Strength through Joy” (Kraft durch Freude, or KdF) organization, which sought to highlight the advantages of National Socialism through leisure and travel, chose as one of its major efforts to promote a “People’s Car” (Volkswagen) for the German public. In a country where car production still focused primarily on luxury models and where only one German in fifty owned an automobile, the car would cost just 999 German Reichsmark, while the program offered a savings plan to make such a vehicle affordable."
Mask Of Comedy/Tragedy (Northeast)
Any serious reader of history knows that global trade has been with humans since ancient times (Ancient Greece, Egypt etc all traded with other groups-political entities; the Silk Road dates to the pre-Christian era; Europeans ran into North America trying to find a shorter trading route to India just to name a few examples). I think the issue is not so much globalization (going back would require really going back a long way in human history), but making more thoughtful decisions about what, exactly is grown or made at home vs grown or made elsewhere. So people should understand global trade is part of human history. It is the details that need to be worked out in a way that does not leave us vulnerable. That is necessarily going to be a complicated analysis. For example we should not import all food or medical supplies. But some of those things will need to be imported. The question is which ones, exactly. Answering this adequately is going to be important going forward
ChicagoMaroon (Chicago, IL)
@Mask Of Comedy/Tragedy I like your thesis. To it, I would also add that manufacturing and supply chains, where global or local, must be designed in to be more fluid so that any one entity is not at the complete mercy of another.
@Mask Of Comedy/Tragedy What Krugman is really referring to trade by colonization which the ancient global trade was not involved. Globalization by Colonizers by occupying and looting the wealth and resources of their enslaved colonies is referred to as globalization. Modern colonization does not need occupying distant countries!
JOHN (San Francisco, CA)
The ruminations of Mr. Keynes aside, the real recipients of benefits of globalization are the companies that globalize, and they are the ones who foist this idea constantly on the government, its officials, and the body politic. The truth is, by trading to any extent with a country that does not share your values, you become dependent upon it. The idea that all this trade promotes peace has been shown time and time again to be true. True in WWI, true now - witness Europe dependent upon its enemy for its energy. Trade will not prevent someone like Putin from acting out his agenda. It's time to pull back from this idea in a big way. A real big way. Sadness at the lack of all this contact and cooperation? Think of how that financed Russia's war against Ukraine and you'll feel better soon. And as to you sadness about small countries that will be effected by this, they too have a choice to make, and with whom they want to deal. The US should seek to disengage itself from China in any area it has a critical dependence. Rare earths can be found only in China? Increase the price and watch. All of this trade with Russia and China only whets the appetites of their rulers and makes them despise us even more when we act like they have no agenda.
Gene (MIdwest)
@JOHN The "values" of the US are the same as those of Putin in Russia or Xi in China or Hitler in Germany - promote corporate greed.
@JOHN Why is Russia an enemy and why is China an adversary? Have you ever wondered? Trading only with countries that share your values - what values? Then US, Canada, Australia (colonizers) and the Western Europe (previous generation Colonizers) should trade with each others and leave 90% of the world? There is not enough wealth among these countries that will make each other more wealthy! Besides, what will they trade? Certainly not the huge amounts of fossil fuels or wide variety of cheap goods or large quantities of food grains (wheat?). When we become ideologues (culture, religion, race) then we lose out.
MFW (Tampa)
"globalization" has led to a stunning and harmful reliance on autocrats, a willingness to overlook genocide, the pillaging of our intellectual capital, and shifted billions from American consumers to Chinese warships. Good riddance globalization. We'll pay for the lower prices we've enjoyed when we are involved in world war 3.
WFXW (Springfield, VT)
Superb analysis. One thing not considered in this piece is a global reliance on rare earths that power our technologies. As I understand it, most absolutely essential rare earth elements are mined in Russia and China as well as central Africa. Critically, rare earth foundries are primarily located in China serving the global economy. Processing and refining rare earth is an expensive and highly sophisticated process. I recall reading an article in FT a few years back that pointed out that the only one US rare earth processor was on the verge of shuttering because it could not compete with China. Electric harnesses for cars made in the Ukraine, grain shipments from Odessa and Mauriopul, natural gas from Russia to heat homes and cook meals are critical. But it seems to me that without ready access to rare earths our communication systems and cyber/technologically advanced warfare capabilities (including lethal weapons such as Javelins, Stingers, and NALWs) are at risk.
Blaise Descartes (Seattle)
It is likely that February 24, 2022 will be a date remembered forever by historians as the date Putin invaded Ukraine. Like June 28, 1914, the date of Archduke Franz Ferdinand's assassination. This earlier date seems quaint now. Why was the assassination of an archduke a pretext for war? By the end of World War I, monarchy was gone in Central Europe. Franz Joseph of Austria had died, Wilhelm II abdicated after giving lots of patriotic pro-war speeches during the war, and Nicholas II and his family were murdered in Ekaterinburg. Vienna had been the center of European culture before the war, but had been transformed into an unimportant provincial city. The problem with wars is that the outcomes cannot be predicted in advance. Science can predict exactly where the planets will be 100 years from now. But macroeconomics is not a genuine science. That's because individuals in power can change the laws by which economics operates. Yet some economic trends might come back to haunt us. We laughed at the Bowles-Simpson report that argued we should balance our budget. A decade of deficit spending has sent our national debt into the stratosphere. Econ 101 suggests that too much debt should lead to inflation. And that is what we see. The Ukraine war will have unintended consequences, impossible to foresee. Perhaps famine in the third world which causes new sources of instability. In our fight for survival we will need oil and may abandon our fight against global warming.
@Blaise Descartes More than a famine in the third world, the danger is us slipping into third world. The West has unsustainable levels of external debt (2-4 times our GDP) and lack of manufacturing capacity for products we need. So far, we have benefited immensely from the status of currencies as reserve currencies (like printing money without consequences) and that is slipping away. If Dollar and Euro lose their reserve currency status, imagine the misery!
Janet (Nashville)
Back in the early 1900s there wasn't an internet. Today there is. Because of it, we'll always have globalization. What we have to decide is, do we still eat to buy from the tyrants? As a business woman, I only buy from companies that are ethical and have good business practices. I only hire ethical people. I have zero tolerance for anything less. Shouldn't global leaders and companies do the same? If not, then trouble will always be just around the corner.
@Janet Global leaders (I guess, the West) and Companies (Corporations) are ethical? by what standards? Only others are tyrants? Ask the world who they think are the real tyrants and you might be shocked.
common sense (LA)
thank you. I have also thought of WWI as an even scarier possible analogy - an archduke's assassination in Sarajevo led Austria to go to war against Serbia; Russia come to Serbia's aid, Germany backs Austria, France and England back their ally Russia and....World War I. Entangling alliances indeed. Whatever happens now, Russia's "lightning war" to take over Ukraine was that same kind of unpredictable spark
Michael Kubara (Alberta)
"authoritarian regimes....rule of law...stability" The usual contrast is Rule of law vs Rule of man. Rule of man is autocracy; more often than not it's the rule of whim, caprice, folly and vain glory. The core precepts of Rule of law (RoL) are commitments to (a) Treat like cases alike; sometimes called "formal justice" since relevant similarity and treatment must be spelled out. (b) This is the basis of precedent law or "stare decisis" (it stands decided). Precedent is a default, overridden only by good reason. This does make RoL inherently conservative, and vulnerable to regressives and future shock phobia. Which makes wise updated judges essential to the system. Otherwise courts become inquisitions--the GOP dream. (c) Procedural justice (juridical and legislative) is like scientific method for determining liability (civil law) guilt (criminal law) or public policy based on logic and evidence. (d) Justice "before the law" is its administration--by civil servants and enforcement by police. (e) Justice "in the law itself"--rules out all the forms of bad discrimination dues to ignorance, prejudice, bias, conflict of interest, personality clash--on and on. Adam Smith's famous "Invisible Hand" promoting the local economy works only because foreign investment is too risky. It is even more risky when foreign suppliers are autocrats.
@Michael Kubara the real problem is weaponizing currency and trade and unilaterally rewriting the international laws. Who is confiscating private property and sovereign wealth? Have you any awareness? It is not the autocrats! When our own governments are wholly owned subsidiaries of the multinational corporations how can we complain about autocrats of distant lands?
Stephan (N.M.)
@Michael Kubara Problem is we have the finest "Law" money can buy. And the more money you have? The more likely that law is to work for you. For those who don't have money? Not so much.
NowCHare (USA)
Globalization was great a century ago, and it is still great now although slightly less so. But technology may make it much less important very soon. Imagine being able to produce practically any product a short distance from your home with the right materials. That's the promise of 3D printing and it will change everything. Couple that with clean local energy production and you have a recipe for success the world over.
@NowCHare Really? 3D printing is going to replace mass manufacturing? Have you seen any proof of that? 3D printing is not even a cottage industry yet. building in single quantity is always much more expensive than mass production!And you are sure of replacing large scale manufacturing with 3d printing.
Doug Fairbanks (Santa Ana, CA)
The problem is where one gets the materials.
wes evans (oviedo fl)
The reason for the Russian failure at wheat exports was the rule of communist socialism. Russia actually became a net food importer under the communist.
Leon (Atlanta)
Biggest mistake US ever made was moving most US manufacturing to China . Biggest mistake Europe made is relying on cheap Russian fuel. An abundance of cheap labor and reliable transportation is available in Mexico using all those Central American refugees. Incentives for American companies to onshore in US , Mexico and Canada should be US trade policy. Europe and US can solve the Russian fuel dillemma and Germany has taken a huge step forward.
John Morton (Florida)
@Leon Why do you think most US manufacturing moved to China? I do not see any data to support that claim.
Leon (Atlanta)
@John Morton Romney bragged to donors in 2012 of using Chineseslave labor with workers in plamts surrounded by fences and with 12 to a room. Remeber Bain Capital?
Scott (Talent, OR)
Globalization may have setbacks, but it is inevitable and unstoppable, like the force of hydraulics. People will forget the war in Ukraine eventually, follow low cost production, and make the same mistakes.
magicisnotreal (earth)
Most of the price increases we are seeing today, are down to greed not supply or delivery issues. All of our problems today were dealt with by the regulations that have been repealed and the new laws created to ensure those regs could not come back since 1980. The most destructive law that prevents any business from being a good citizen that plans for the future & stability if they want to is the law that mandates profits be maximized for the shareholders. Another is how fast money can be moved now. Speed like that encourages people to not think ahead or plan and bad behavior. The world is still the world and that is why the New Deal and the governments 1932-1980 set up regulations that made sure business worked for the benefit of this nation and its people. That they created jobs and managed the company to be stable and grow responsibly. It actually encouraged and supported good people who were not driven by avarice to go into business. It protected consumers from the sorts of ripoffs that are common today. Economic stability and economic security was the purpose and successfully met goal of those regs. The ideals of Colonialism is what was used to destroyed them and brought us low. Do you think government by and for the people should have an economic system that maximizes the exploitation of its people or one that is meant to make their lives better and more stable? The second choice gave us the best decades this nation has ever known.
Birdygirl (CA)
If we end up in the mid-term elections or 2024 with the GOP at the helm, you can say goodbye to the middle-class life. Their tax cuts and restructuring of the tax code during Trump already put the squeeze on middle-class Americans and gave tax breaks to the 1%. I just can't imagine how much more damaging their policies could be on top of the current global state of affairs. The Times article this morning on taxation under each party shows the stark reality of the GOP fiscal priorities, and it ain't pretty.
Steve (Charlotte NC)
@Birdygirl Globalization is nothing compared to the Fascist movement headed by the Republican party in America. It's already too late to stop the Fascist contamination
Cassandra (Arizona)
Europe dismantled much of its nuclear energy capacity rather than making it safer. It is now paying the price.
Paul from Long Island (New Yrok)
@Cassandra In 2020 the world added 0.4 gigawatts more nuclear capacity than it retired, whilst the world added 278 gigawatts of renewables – that’s a 782-fold greater capacity. Renewables swelled supply and displaced carbon as much every 38 hours as nuclear did all year. Where nuclear is cheap, renewables are cheaper still and efficiency is cheaper than that. There is no new type or size or fuel cycle of reactor that will change this. Do the math. It is game over.
Norm (US)
@Cassandra Yes, a bow to dumb left-wing propaganda. Bring back safe nuclear power.
Meg (AZ)
You can't have a thriving "stable" capitalistic system without laws protecting personal rights and this also includes personal property rights. These rights are most stable and found in democracies. Then, of course, this capitalistic economy needs: local and national security, a judicial system to protect rights, infrastructure, and a healthy educated workforce - who make enough to spend and participate in that economy to keep it going and thriving. In addition, capitalism is not like some imaginary perpetual motion machine, it can derail if not given good laws or rules for the road to run on in order to protect against abuses and monopolies and to ensure corporations act as good "corporate citizens," etc. Otherwise, you will end up with something that looks akin to the game of monopoly, with a wealthy few and a lot of very poor folks like what was happening in the early days of the Industrial Revolution - and if it goes too far - "game over" for many and a wealthy few controlling everything - even government (Robber Barons). We may now run this risk with corporations buying up housing if the government does not act to provide disincentives (risk becoming too feudal in nature). The point or object of the game or capitalism is to keep the game or economy going - not ending - and to keep as many people as possible thriving. happy and healthy.
Kashe (Alexandria, VA)
@Meg Personal property rights under capitalism? In SW Virginia a private company, with the blessing of FERC, used eminent domain to seize private property. Supposedly for the greater good, but the laws and regulations about that, as administered by FERC, are extremely vague. Property that was held by families for generations was forcibly taken from them. So much for private property rights.
Smallwood (Germany)
@Meg Yes. And globalization has brought staggering income inequality that conscripts much of the world’s population into wage-slavery while corporations assume increasing control over governments. Take, for example, the dominant agricultural model that has alienated farmers from the land and placed it in the hands of agricultural MegaCorps that plow chemicals into the earth (what’s left of it) and strip communities worldwide of their ability to support their populations. We, citizens like you and me, have traded our purported deeply-held values for a cheap plastic bucket at the big box store.
Meg (AZ)
@Kashe That is terrible - but at least we have the right to fight here and communicate abuses - but the fight is never seems to be over and can be an uphill battle against giants. I am also concerned about what seems to be abuses by lawyers, as well. It seems like some criminals have cut out the middle man and taken up the profession themselves - need more policing and oversight of the profession.
Chris (Boston, MA)
Globalization in its current form was self-sabotaging from the beginning. It's led to great wealth and prosperity for the top 0.1% - but it's resulted in stagnant wages and deteriorating living standards for everyone else. More of us live paycheck to paycheck. Struggling to pay rising rents, health care, save for retirement, and send our kids to college. Granted things are worse in the corruption and bribery fueled US system where any efforts to provide a Europe style social safety net is sabotaged by billionaire donors and their lackeys in Congress. But we're not the only nation that's lost good paying manufacturing jobs to cheap overseas labor while executive compensation has gone stratospheric. The inequity and unfairness of globalized capitalism is the main force behind the rise of populism that's threatening the system itself. I think it's oversimplified to say globalization will completely unwind. But taking a few steps back from the global capitalist free-for-all would not be a bad thing. Bring some of those lost jobs home and reinvigorate the middle class. Insulate us to some degree from global supply chain disruptions and the whims of autocrats.
Monterey (Seaside)
"Bringing production back to nations that believe in the rule of law may raise your costs by a few percent, but the price may be worth it for the stability it buys . . . The benefits of globalization are always at risk from the threat of war and the whims of dictators. Another brilliant analysis Paul...thank you ever so much. I do wish you had a bigger megaphone so that real common sense could start creeping into our leaders here and abroad.
Dory (London)
If I believe Krugman, the only part of the west is only a victim of "authoritarian" regimes in all of this. He has turned into a propagandist but I'm still trying to understand whose water he's carrying. When a Nobel prize winner starts purging all basic facts from his analysis whether they are geopolitical, economic or political, yes the world is in fact changing. Even if you solely blame Putin for the war in Ukraine and choose to believe that it started in February of this year and not in 2014 because CNN is telling you so, I don't think there is any doubt that the unilateral sanctions of the west are backfiring and threatening the stability of the world economy. Putin didn't have the power to do that all by himself. It also took illegally confiscating the reserves of a sovereign country because we don't agree of its behaviour towards its neighbour and banning energy imports that are currently impossible to replace. The west is taking nonsensical, emotionally rooted measures and then tasks its technocratic elite to go and rationalise it for the masses , so they peacefully carry the cost of those decisions.
@Dory Well said. The West is taking nonsensical measures, not emotional, because it thinks its Hubris will win. The West is shooting itself in its foot. EU is a lackey of US and is going to pay a high price for following us.
Jack Lee (Santa Fe)
I'm afraid that globalization is a house of cards, and we're watching it collapse in front of our eyes. Just one element going out, and everything else is impacted. The damage to the wheat harvests in Ukraine and Russia alone will upset a lot of things, which in turn will impact everything else, and those failures will impact everything else again. The repercussions of Putin's actions will reverberate for a long time. This is one major butterfly causing a serious hurricane.
Lyle Ross (Houston)
There is a huge difference. In 1914 folks were ordering, to be trite, pate' from France, meat pies from England, and schnitzel from Germany. That is, items that were unique to those countries. Today, we order items that can well be made in our own country, from China. This isn't about ordering items that countries specialize in, it's about cheap labor. Let's get over the notion that this is like anything that has ever happened. In pursuit of profits, rich corporations built a supply chain that was going to be susceptible to war, pandemic, or any disruption that might come along. It was unnecessary, for the most part, but would have meant less money in the pockets of rich folks. Shame on their greed.
Barry Schiller (North Providence RI)
@Lyle Ross another difference is world population has grown to such an enormous amount, almost 8 billion, and that is straining resources (fish, water, lumber, soil...) and likely to get worse
Paul from Long Island (New Yrok)
@Lyle Ross Isn't cheap labor unique to certain countries?
Matt (NJ)
Globalization as a concept works great on paper as long as everyone on the globe plays nice. When there are cultures and leaders of cultures that weaponize their country's economic contribution(s) to globalization, it will have a tendency to fall short of its intended goals and benefits. Ignoring human rights is one of those issues. Ignoring and or changing a country's shape or size is another. War is the method of choice to resolve unresolvable issues, that's an issue. The differences of cultural and economic development cause issues. Changing political systems from elected representatives to life time appointments is an issue. Corporate greed contributes to all these issues by ignoring blatant violations of the cultural trust required to make globalization work. Political corruption and the rise of the political class around the world causes more problems than most would admit. The reason why the concept of globalism falls short is that some have a tendency to live off others. Push people far and hard, they will push back. That includes any time or place, whether its 1914 or 2022.
HLW (Phoenix)
@Matt On paper the rules based trading system that the US put in place post WW2 has taken more people out of poverty and starvation diets to middle class in the shortest recorded time in world history. More countries have thrown off Colonial powers and become independent soveriegns in the history of the World. It's not perfect, it's better than havng the large powers of the world colonize people throughout the world. Exactly what Russia is doing right now in Eastern Europe.
@HLW US put ruled based system post WW2? And whatever that rules based system is, it is the reason more people have moved from poverty to middle class? This is the same argument slave traders and slave owners have made in support of their enslaving people and growing rich on the backs of the slaves (free labor). I guess you will also claim that the plight of the native Americans has been vastly improved by our colonizing America. Please don't insult the exhausted, over worked, and exploited poor people of distant lands with your argument. Exploitation of indigenous people and their resources today does not require going there and conquering those countries any more (like in the 19th century). It can be done very cheaply in the name of globalized trade and as a bonus even claim that we have reduced poverty in the world while vastly increasing poverty in our backyard.
Matt (NJ)
@SR Totally agree. I did not identify some of the specific issues you did but totally agree with your assessment. I am not and do not believe in globalization.
Orchard (NH)
We are still paying the price of World War I (World War II was simply the second half) in many, many ways. But most obviously right now is Putin trying to regain Russia's lost stature. Does he see it as the the Soviet's high watermark or 1913? And I hope we see the pendulum of globalism swing back enough to take the edge of the negative consequences without losing the incredible economic dynamism of free trade across borders. I hope policies are in place to do this. Knowing Biden, the answer is most likely yes. But knowing Republicans (and progressives who dislike and distrust globalism) they are prepared to sabotage these plans.
Scott (Talent, OR)
Republicans don’t necessarily dislike globalism. Their top leaders and backers like the Koch brothers (who are determined to keep doing business in Russia) profit mightily from globalism. Trump himself has hotels and golf courses everywhere. That doesn’t stop them from using it as a divisive issue, just like CRT, abortion, and guns. I’ll bet the most powerful in the GOP could care less about these issues.
HLW (Phoenix)
Companies that make and sell goods and services seek customers. Customers seek value. That's true in Iowa and Shanghai. There are 100's of millions of middle class consumers outside of the US and EU. US population growth is slowing and aging as is China's. We have also reduced immigration both legal and "illegal" to a trickle. We don't have enough workers to produce more goods let alone take care of our ageing population. The end of globalization would probably trigger a new era of colonization. We are seeing it right now in Ukraine. The alternative to a rules based trading system would be a disaster for the world. We would be poorer, there would be more wars and authoritarians would rise and prosper. We saw it here with the rise of Trump who was backed by Putin, Kim and Xi.
@HLW Rules based system as long as we are making the rules and breaking our own rules whenever it suits our ends?
Brian (Chicago)
Its funny, but what's happening now is almost biblical in proportion. I think of the story of the Tower of Babel that I learned as a child. Maybe the lesson is the world cannot work together.
Posey (Maine)
@Brian Another lesson is that nations, internally, can't work together. At least one I know pretty well.
McK (VT)
Is it possible for US government to make regulatory laws that set an adjustable percentage of raw materials and manufacturing of products must be made in USA? So we will not be at the mercy of every increasingly frequent upheaval, including climate, pandemics, and crazy authoritarian leaders.
E. Henry Schoenberger (Shaker Hts. Ohio)
No dealings with unprincipled individuals, oligarch crime family members or authoritarian dictators can be considered reliable or better than tenuous. And the risks are historically self-evident, as well as merely common sense.
@E. Henry Schoenberger And who are those unprincipled? Could be ourselves too? Have you ever thought of asking people of the rest of the world?
Joseph Huben (Western NY)
China depends on globalization more than any other economy. It’s relationship with Russia is a fossil fuel relationship which China is choking to death from. China makes solar panels and windmills and has reserves of nickel, lithium, and cobalt(in Africa). China has long term goals that have traditionally embraced short term pain in exchange for long term gain. They may be inclined to align with democracies. The most dangerous nations may be the Saudis and Arab countries as their future is sand while their influence is greased by cash reserves. They are the iconic cave men of this era. Once the Russians collapse Saudi Arabia will be panicked. Danger danger! Like heroin dealers, OPEC will be pariahs.
Ken H (Bergen County NJ)
Live and learn. Is China as stupid as Russia? Probably not. People in China have prospered greatly in the last 50 years. Will they make the correct decisions going forward? We'll find out. But still, the behavior of both Russia and China, by its implicit and outright compliance will have legit business hedging its bets.
Mike (Ohio)
At first agree with you. Then upon further thinking....JUST TO NAME A FEW ISSUES. Why is China forcing companies to share their data with the government, why does china own significant amounts of stock in every large corporation, why are they building islands in the sea claiming ownership of areas traditionally part of other countries, why is china actively disputing the territorial integrity of every single country that surround it. It appears china is a more significant violator of international law than Russia.
Judy Kohn (Santa Fe)
@Mike - it is true that both China and Russia are looking towards domination, perhaps at slightly different scales. Russia wants to restore the glory days of the USSR, China is looking at world domination. The biggest difference is that Russia is using 20th technologies (tanks, infantry, air power), whereby China is using 21st technology (economic, cyber, etc) to accomplish their goals. Whch is the the greater violator? Does it matter when they are both doing so?
@Judy Kohn Didn't we use the same 20th century technologies in our wars in Afghanistan, Iraq, Libya, Syria? China and Russia are looking for domination. OK. We are looking to make our domination permanent, right?
Ruuku I (New York)
Everything comes at a risk. I wont say that deglobalization is the answer to this but this is completely in the reality of globalization. When one of the major players drop out, there's always going to be mayhem in the team for a while until that gap gets filled up or that player is back. That's just what is happening with Russia. The world is not going to die or anything. Its just going to be a hectic for a while and it will eventually calm down and that will be the new "normal."
Norm (US)
This will strengthen the US and its democracy, not erode it. It will erode the Chinese and Russian autocracies. There will be good effects from this, but none worth what is happening to Ukraine. My heart is sick for these people. May god be with each and every Ukrainian during this hard time.
@Norm What is happening to Ukrainians is bad, very bad indeed. But is it worse than what happened to the 500,000 Iraqi children and millions of civilians? Why didn't our hearts go sick then? Because they are not like us?
Alex (MA)
OMG, how are you going to protect the world against the possibility that a significant country will fall in love with a megalomaniac? Put an American MP on every crossroad in the world? The only thing the long XXI century proved is that foreign trade is a negative proposition in the long run (say losses from 9/11 far outweigh profits from Sudi Arabia tourism). It is true for the US and it is true for every country. The world would be a far safer place without universal access to technology and materials available to all players.
Posey (Maine)
@Alex are we "a significant country ...in love with a megalomaniac?"
Alex (MA)
@Posey Not even close. Megalomaniacs do not accept 2 terms and it is not going to change hell or high water.
Russell (Nashville)
“Beyond that, what Putin has taught us is that countries run by strongmen who surround themselves with yes-men aren’t reliable business partners”. I remember reading almost verbatim the same thing about three years ago when Europe was retreating from the US economy, except the name Putin was replaced with the name Trump. Almost verbatim! The difference is back in 2020 we still had the ability to vote our strongman out. Since then the USA’s version of an oligarchy has been greatly strengthened. I sure as heck our democracy can triumph despite the acidic attacks upon it from within…
Jackson (Virginia)
@Russell Europe was retreating because of Covid and lockdowns, not Trump.
Tom Q (Minneapolis, MN)
What I will never fully understand about leaders such as Xi and Putin is that when their solutions don't seem to work very well, they simply continue on. The Chinese vaccines don't work well but they are still used. The Russian economy has never performed well but Putin never changes course. And now he is seeing the massive flight of young talent from his nation. And in his nation, especially, foreign nations won't pay him in rubles for oil and gas. Maintaining power at the expense of improving the lives of your "subjects" has yet to be proven as a winning strategy.
ARL (Texas)
@Tom Q Our government is maintaining power at the expense of the American people. The war is about neoliberal economics and power, not about democracy or freedom. The expesense of preserving the empire goes hand in hand with the deterioration of at home, infrastructure, health and education are only a part of it.
Cavalier57 (Mathews Virginia)
@Tom Q For Xi and Putin it’s about reshaping the world order. In other words the destruction and discrediting of western civilization which in the last 80 years has been lead by the US. This is about re-writing history and regaining the former glories of empire lost. China has never forgiven the west for the Opium Wars and Russia blames the US for collapse of the USSR. Body counts and quality of life for the masses are of little concern to the “bigger” picture of history. In this context I am talking about the Chinese & Russian GOVERNMENTS, not individual citizens. But unfortunately the will of the people has never been a significant factor in determining government policy in these two nations.
Abubakar Naida (Colliervile TN)
@ Tom Q ‘Maintaining power at the expense of the well being of the citizens’! Are you talking about the current state of US politics? Aren’t our politicians just interested in maintaining their power at all costs?
Jerry (Pennsylvania)
Paul, seriously? POLITICIANS have killed the global economy. From Prime Ministers to Senators and Representatives to Governors, there's been a concerted effort to destroy the world economy. Come on, man. Get serious. Be real.
Bob (Evanston, IL)
I'm afraid that we will NEVER be independent of dictators like Putin -- because the Republican Party wants to keep us, as well as the rest of the world, dependent on fossil fuels.
Posey (Maine)
@Bob And on a dictator.....
The dilemmas of globalisation and capitalism existed a long time before WW1 . If you read the articles of Karl Marx and Friedrich Engels, journalists covering politics in London for the German press just before the US Civil War, the question of the cotton from India was up, because, the blockade from the USA had stalled the British textile industry by depriving it from its investments in the American plantations, but they could not replace it with the cotton from India either, having humiliated that industry in their self interest of domination .
Robert (Minnesota)
I went to buy a new Volkswagen EV the other day. The wait was 8 months or more. "Why" I asked. "Germany has shut down production". Again, "Why". "They get many of their parts from Ukraine". "I see, and there is no telling when that resumes, or who else could tool up". They replied, "Thats right". We are very connected globally, and in my opinion we should be. We are, after all, one humanity. We rise or sink together. We need to boost and support each other, and where there is darkness, heal it. These dark regimes such as we see in Russia, N. Korea, Iran, Brazil, Hungary, and many other autocracies need healing. That may come in the form of confrontation, or tough love. And there is healing needed here at home, especially when some 40% follow an ex president who loses an election only to deny it and cook up a treasonous plan to overturn the election which culminates in a violent Inserection at our nations capitol. Yes, that needs healing, but first it needs justice.
Clearwater (Oregon)
@Robert Why didn't/don't you shop for an American EV? The Chevy Bolt is a terrific car. The new Ford EV pick ups are great. Why do many of us progressives not even consider American vehicles? I live in an area swamped with Subarus and the ones mostly driven aren't from the US plants. Clearwater - Progressive and US made vehicle owner!
Robert (Minnesota)
@Clearwater I own a Chev Bolt, but due to battery fires and a massive recall, I participated in a buy back. I did receive almost what I paid for the car 4 years ago. I do not want another Bolt. The US market has nothing else like it. I own a tesla also, but my wife does not like it. Too complex to drive. Ford only makes a pickup and a sports car. I bought a nice Hyundai Ioniq5 EV yesterday. US auto makers need to get on the ball.
@Clearwater Perhaps, you are not aware that GM halted sales of its Bolt EV because of battery fires.
Leon (Florida)
The only economy Putin has the power to kill is Russia’s. Putin is a lightweight making noise in the heavyweight division because nobody had taken a swing at him but the sanctions and the gas boycott will put him in his place.
@Leon That is our wishful thinking. The Ruble sprang back to its previous value after a hit for a month. EU's economies will collapse without Russia's oil and gas. Germany refused to impose ban on Russia's oil and gas imports. Our echo chamber will make us believe that Russia has already lost the war and its economy has collapsed.
Leon (Florida)
@SR Europe can not turn him off overnight, but it will do it and Russia will be back in the Middle Ages.
PATRICK (Pennsylvania)
Am I worried Putin will trash our economy? Not really. His friends the Party of Red Republicans will just as they always have in the economic cycle when Democrats built up prosperity the Republicans took their turn in power and pillaged it. I mean really, Big Oil has been ransacking the economy for most6 of the past decades and Republicans helped them. So do I think Putin will trash our economy? Maybe. He likely learned from Republicans whom he adores and who adore him. Cue Trump!
Expat (Zurich)
So are we about to see a second deglobalization? It would be good for many Americans - and US Democracy To cite Foreign Policy : “Economists on the Run” "Paul Krugman and other mainstream trade experts are now admitting that they were wrong about globalization: It hurt American workers far more than they thought it would. Did America’s free market economists help put a protectionist demagogue in the White House? Now Krugman has come out and admitted, offhandedly, that his own understanding of economics has been seriously deficient as well. It was quite a “whoops” moment, considering all the ruined American communities and displaced millions of workers we’ve seen in the interim. And a newly humbled Krugman must consider an even more disturbing idea: Did he and other mainstream economists help put a protectionist populist, Donald Trump, in the White House with a lot of bad advice about free markets?" https://foreignpolicy.com/2019/10/22/economists-globalization-trade-paul-krugman-china/
Sophia (chicago)
Well, people who study history recall that after WWI, a horror in itself, we experienced revolution, depression, WWII and the Holocaust. The Iron Curtain fell. I am praying we don't repeat this dreadful scenario but the world seems to want to destroy itself. Some of my young friends seem bored with peace. They see nothing wrong with Will Smith attacking a comedian. Nobody wants to work to save the environment.
Robbie Heidinger (Westhampton)
What Krugman is referring to here is the English Empire: **an economic replay of 1914 — the year that ended what some economists call the first wave of globalization, a vast expansion of world trade made possible by railroads, steamships and telegraph cables.** The global economy will not end bc of the Ukraine bloodbath. The US Empire is ending. That's what he's writing about.
Mike (Ohio)
This fact is true. The immediate issue is not whether or the extent to which US global influence is diminishing. Once again the US is bailing out Europe in an existential crisis. The US is going to keep EU factories humming and autos running and homes warm in the next few years. This time shipping massive amounts of hydrocarbons because the EU is over reliant on autocrats. The US made the necessary sacrifice to create the weapon systems currently causing havoc on Russian military.
@Mike US itself had been importing oil from Russia (10% of its total oil imports). And where will US find extra oil to keep Europe humming? US just signed an agreement to supply EU 15 billion cubic meters of LNG which is less than 10% of what Europe imports from Russia. And even this amount will take years to happen because we need to build LNG terminals on bot sides of the Atlantic which takes years and huge amounts of capital. So, how should Europe sustain its economies meanwhile?
mjbarr (Burdett, NY)
In the true spirit and logic of autocrats and two year olds throwing hissy fits, if Putin can’t get what he wants, he will do his best to ruin things for everyone else.
Sandra Garratt (Derby Line, Vermont)
China has already invaded Tibet and they have been brutal trying to crush Tibetan culture. Ask His Holiness the Dalai Lama and ALL Tibetans how that worked out for them.
Jackson (Virginia)
@Sandra Garratt And the world did nothing about it.
Norm (US)
That sounds right.
CA (Key West)
The world is confronted by massive stupidity and ignorance driven by male tribal rule. We are facing our planet's destruction by acts of mankind and we lack the intellect to organize, discuss, debate, and compromise on a path forward to save our planet.
Marcoxa (Milan, Italy)
Yep. Not to speak of our (our: both sides of the pond) feckless dependency on another autocrats who have invaded (and are invading) other countries (Y). I think there was a journalist who wrote about them. Unfortunately he got killed (K).
Kahisha (NY)
RE "Vladimir Putin’s botched war of conquest has, of course, meant an end to wheat exports from Ukraine American sanction did , not Putin If they work is doubtful The Economist , 23 hrs ago “There’s been a resilience that was hard to predict”—Russia’s economy https://www.economist.com/podcasts/2022/03/31/theres-been-a-resilience-that-was-hard-to-predict-russias-economy
Auntie Mame (NYC)
Oh NO. YOu mean the wealth gap just might get smaller/ prob. not. You mean the government will again tax the rich and mitigate the laws that have allowed for rampant monopoly capitalism killed local economies in favor of Amazon and Walmart? Other countries in Euope can't tool up and make wire harnasses. Living in Princeton as an academic, Krugman really doesn't understand how the other half lives. He hasn't experienced say Appalachia here the few factories and mines are now closed and the local stores. Towns where the Greyhound bus to the big city stopped four times a day and now is by-passed on the Interstate-- needed to save ten minutes of time- if that. The highway once ran thru town. Fewer trains hauling coal. Whims of CEOs.. who for the sake of what- return to whom exactly decided it was OK to decimate local economies.. and turn the US into a service economy (tourism a major source of income ere?? yikes) hedge funds to dictate rents- supported by government stimulus.. This is a new kind of socialism which helps those at the top of the food chain. Only the little people -- well demonstrated. Betting on the wrong horse?? In any case lots of bad decisions including useless very expensive wars - # why we can't afford single payer universal health, education and affordable housing?? !!!
rls (Oregon)
"But while China hasn’t invaded anyone (yet?)" Tell that to Tibet.
Antoine (Taos, NM)
Tell me again, what followed 1914?
Clearwater (Oregon)
No offense to the opinion of Mr. Krugman and I don't want to sound too jingoistic but I think America has lost too much of its manufacturing capability and I for one would like to see that reversed. We have almost no textile manufacturing and the last time I checked almost everyone wears and needs clothing. I buy American made jeans and shoes/boots and the ones I buy are of really good quality (plug for All American Clothing Co. here!) but I doubt the capacity for a broad demand would be fillable. Obviously there is a vast amount of the world that will do business with us if we just ignore their anti-human policies. I for one am not comfortable with that. Also the US has a stronger environmental law structure in tact so when we make goods, they don't, in general, saddle the planet with the same harmful waste as other nations we can't control. And, US goods get shipped less far. Better for the planet. We need to make more of our own goods here. It is also a matter of national defense. I just wish Hawaiian Coffee was more affordable. It's ridiculously priced. For the good stuff.
Patricia Chargot (Ann Arbor, MI)
It will be very good for the planet. It's bound to slow climate change -- much less fossil fuel used to transport goods and pollute the oceans.
It's me (West)
It's the opportunity for the rise of a new selective ethical economy among countries which genuinely share the same core values.
Hammerin Hank (New Jersey)
@It's me It should be. But, we are not holding China to account for refusing to condemn, or withdraw support from, Putin's invasion of Ukraine. I wish you were right.
It's me (West)
@Hammerin Hank Yes. It'll take time. But I've already started myself with those principles. China is not an option for me. If everyone does the same, it'll be easier. It must start from the aware citizens.
Hammerin Hank (New Jersey)
@It's me Agreed. I'm doing the same. It's frustrating that there is so little said about it anywhere. Not in media, not by our leaders,
dbd (Tulsa)
Russia is such a small part of the world economy that Putin attempt to influence greater world affairs is even less effective than his conquer of Ukraine. China could do damage to everyone elses economies, but with exports of manufactured goods and investments like belts and roads seems more interested in profit than world politics. What countries actually do can affect the rest of the world, but what they say is mostly for domestic effect.
Hammerin Hank (New Jersey)
@dbd This, exactly this. And, we could stake a stand against China, on principle, but our elites are addicted to profits and our masses are addicted to iPhones and Nikes.
dbd (Tulsa)
@Hammerin Hank RIP Henry Aaron 44. Go Braves. Why we want to be the county disrupting the world?
@dbd Yes, Russia is small part of the world economy but it is a very large part of the EU economy which imports almost half of its oil and gas needs. Also, EU depends on the Wheat imports from Russia and not to mention many raw materials needed for its industries. And that is the crux of the problem In truth we never cared for the rest of the world anyway.
Paul Wortman (Providence)
Correction: China invaded and took control over Tibet forcing the Dalai Lama into exile. Recently, it took control of Hong Kong. Now it threatens Taiwan and is militarizing the South China Sea. It's the same aggressive Putin pattern of all authoritarian regimes. The Ukraine War has now become, as it did in the 1930's, a war of democracy v. autocracy. It's time to relearn the lesson of World War II: No democracy can survive if it trades and supports aggressive authoritarian regimes. The New Global Order must recognize that harsh reality if it's to survive. That means corporate capitalism which cherishes access to Chiba's market must be restrained and refocus on trade with democracies or non-aggressive regimes like Vietnam. It's time to revive the Trans-Pacific Partnership (TPP) trade agreement as a way of containing and combating China as a first step in the New Global Order.
@Paul Wortman To call Ukraine a Democracy is not just a stretch but a pur concoction. For a decade it banned its Russian speaking citizens from using Russian language. It prohibited them from practicing their culture. recently Ukraine has banned 11 of its most prominent political parties which actually hold the majority in its parliament. In fact, it has consolidated its TV media into just one channel to provide news as authorized by its government. Even more bizarre is Ukraine's demand to ban the letter Z across the world because Russia painted its tanks and vehicles with a symbol Z! You call this a Democracy? I guess, our standards for Democracy have hit a new low.
Ed (Austin, TX)
"So if you’re a business leader right now, surely you’re wondering whether it’s smart to stake your company’s future on the assumption that you’ll keep being able to buy what you need from authoritarian regimes." Exactly. This is a real thing and is surely being discussed very seriously in boardrooms from Apple to Walmart. I have felt the last few years that management and investors were TOO eager to send jobs overseas in order to enrich themselves.
Ager Publicus (Bigfoot County)
@Ed Try last few decades and you'd more accurate
Vesuviano (Altadena, California)
If a decrease in globalization forced the United States to manufacture more of what its consumer society needs, I think in the long run that will be a good thing. And I further hope that Putin's invasion of Ukraine will demonstrate conclusively that wars of conquest among nation-states is obsolete and counterproductive in the extreme.
Ed (Austin, TX)
@Vesuviano Unfortunately, I think your hope for a conclusive demonstration that wars of conquest are obsolete is likely to be dashed. Even just to convince Russia the war in Ukraine would have to be grinding, long, and deadly. And the U.S. example tells us that even a democracy can forget the lessons of war in just 30 years. Iraq should never have been occupied and never would have in the shadow of Vietnam. But 30 years later?
jerryg (Massachusetts)
Much of this comes down to a need for some kind of rational engagement with China. In theory that ought to be easy, because both countries have an enormous interest in doing it. Xi’s regime is certainly unsavory but a lot of recrimination on both sides is political rather than real. In particular there is the endlessly repeated refrain about how the Chinese stole millions of American jobs. That story is actually false. If you look any chart, 100% of that job loss occurred with the G W Bush administration, either directly or as a result of the 2008 crash. That’s not an accident. The Bush people were pushing anything business wanted—including the deregulation that led to the crash AND offshoring of jobs. The Chinese were in fact manipulating their currency, to keep it from rising due to the balance of payments deficit, but the Bush people had no interest in doing anything about it. Great for Walmart. We got offshoring because we wanted it. After the crash, when the job loss was clear, the Republicans in Congress blocked any help for the people who were hurt (remember the balanced budget amendment) to sow discontent for the 2016 election. The evil Chinese are convenient scapegoats for Republicans (to cover their tracks) and for the Democratic left (to attack the center). If we calm the rhetoric we can establish economic rules of behavior with the Chinese, cooperate on climate change (as actually did happen with Obama), and possibly help both prosperity and peace.
Greg S (Louisville, KY)
@jerryg It takes two to tango, so your assertion is exactly right that the US, business and government, colluded in moving jobs offshore. Think chip manufacture for a great recent example. Now 'benevolent' American businesses are investing in new domestic plants. Do you think the 2017 tax cuts had anything to do with that?
Hammerin Hank (New Jersey)
@jerry Great in theory. But we are not even talking about restraining China for humatarian principle, aka for their enabling and supporting Putin's horrible invasion of Ukraine. But we should be.
Placeholder (UK)
But wasn't the period between 1918 and the return to globalization in the 1980s also the age that saw the rise and consolidation of the welfare state and of record levels of equality in the west? Why should western workers lament the passing of a system of globalization in which they were losers, however many products from the ends of the earth it enabled their bosses to buy?
Steve (New York)
Mr. Krugman doesn't mention that it was World War 1 that really propelled the U.S. into the first rank of world powers. While we sat on the sidelines for essentially the first 4 years of the war (yes, I know we entered the war in 1917 but it wasn't until June 1918 that more than a handful of U.S. troops entered combat). While the European powers were knocking each other out, the U.S. had a booming economy supplying war material primarily to the allies (we were officially neutral but the British blockade of German and neutral country ports prevented our exporting much to the Germans. Unlike the more famous U-boat campaign against the British, the blockade of the Germans was almost 100% successful).
ARL (Texas)
@Steve Mr. Krugman should stick to economics only when he ventures into politics and history he is losing any objectivity he might have. He becomes part of the Putin did it crowd. Europeans can't depend on the only superpower for energy at all. Russia has been a dependable supplier of energy for decades. The US is using NS2 for American political gains only against Germany.
Kami Kata (Michigan)
If we were self-sufficient in the basic necessities of life, why would we need to concern ourselves with global trade disruptions. In fact, shipping commodities and products around the globe is turning out to be a real bad idea. We can grow sufficient food, we can harness sufficient green energy, we have land and water (some of which hasn't been defiled by extraction or dumping), and we have somewhat clean air (could be even cleaner as we saw when Covid first hit and industry shut down). It would help if we stopped being the military monster on the world stage.
Frank Saltaire (Tarrytown)
@Kami Kata i also would like us to stop being a military monster, and like mr. krugman i do NOT believe that "the free market" is the answer to all problems, but: the u.s. developed and grew and remains closely tied to the world economy. and it's impossible--for me, anyway--to imagine how our economy would decouple from the world economy without MASSSIVE government planning, rules & management....which would be highly problematic politically as well as practically. and would reduce the standard of living for most people in a punishing way for quite a while.
@Frank Saltaire Power of US is really its Dollar which secured its status as the world's reserve currency. This alone gives us hundreds of billions of dollars every year without doing anything. It also empowers us to print unlimited paper money (since we don't need to back it up with gold) without any adverse consequences. essentially, our economy is subsidized by other countries who hold most of their foreign reserves in the form of our Treasury bonds and deposits in US banks. US banks benefit immensely from this free wealth since all dollar transactions have to go through these banks and which earns them huge amounts of fees. If we do decouple our economy from the rest of the world, our dollar will lose its value which will result in unsustainable levels of inflation, expensive imports and unbearable level of external debt (30 Trllion and growing).
Rjammy (Minneapolis)
I believe we have gone to far with globalization in that it has destroyed US jobs and working class people have paid the price. Income inequality is a significant contributor to so many of our problems. Being so dependent on places including China has put us in a precarious position. Yes we have saved money but the collateral costs are enormous.
John (Pennsylvania)
Can’t resist pointing out the “other” list to the many commenters focused only upon money and political trends behind global trade. The easily extracted reserves of oil, high quality coal, and natural has in the US are largely depleted. Taking more from deep offshore reserves accelerates of climate catastrophe. Gold, copper, nickel, iron, lithium, uranium…same thing…and shall we really re-destroy the UP, northern WI, and the MN boundary waters with sulfide mining? The cheap and east resource extraction action is in the undeveloped world, a fact which China seems quite aware of.
WP (Colorado)
I would like at see another analysis by Dr. Krugman on the history of our most recent flurry of globalization and how it relates to wages and inflation. From my armchair it really seems like the rapid, neoliberal form of globalization resulted, here in the US, in stagnate wages but also allowed the prices of consumer goods to stay low. As a net, a lot of Americans seemed ok with stagnate wages as long as all the things we want to buy were cheaper (obviously this resulted in quite a bit of consumer debt but we can table that). But when our globalized supply chains were so severely disrupted by the pandemic we have seen this low wage, low price economy also be severely disrupted. So, I guess the question is, if we do pull back on a globalized economy, either forced to because of war or other global issues or based on politics at home, we are going to see the cost of goods go up, so if this is the path we choose to take or are forced to take then we as a public better be ready for higher prices. Are we ready to expect this? How many Americans are able to connect these larger political-economic forces to their individual pocket books? If we do become a more national and less global economy (as a lot of people want), are we ready for the consequences? Are we ready to adjust (i.e. reduce) our consumption habits? Or do we simply want stuff as cheap as possible no matter where it comes from?
bf (Lawrenceville, NJ)
Paul Krugman as usual is right on with his analysis today. However, when Krugman describes advanced economies as being only slightly poorer from the partial retreat from globalization, he omits the role of militarization and the rise of ultra nationalism. In the early 1930s it was militarization and war preparations that lifted countries such as the US and Germany out of the Great Depression, and turned these countries into the most advanced military regimes in the world. Militarization and hyper-nationalism led to World War II. We might see a similar development right now--stocks such as Lockheed Martin, Northrop & BAE Systems are up 20%. The combination of increased militarization and waning globalization may produce a net effect of slightly poorer advanced economies, but, in combination with hyper-nationalism, it results in a very different world: one which is more conflict-prone and less interested and effective in solving shared problems such as climate change.
S.Einstein asc (Jerusalem)
"To make the world durably richer, we need to make it safer." And to make it "safer," ACTUALLY, in the broadest of dimensions, and not just as a mantra, we need to sufficiently learn, know, and understand the human, as well as nonhuman, sources of existing diverse threats. Which prevent, interfere with, seeding, nurturing and harvesting achievable, maintainable, security. For individuals. For societal systems. And since the necessary resources for influencing targeted changes are likely to be limited we need to set viable priorities. Within...as well as between... One "generic" suggestion would be to foster the understanding of the dimensions, and necessary fostering conditions for diverse types , levels and qualities of failure to occur. We need to engage in, and welcome, quested- "failure," as opportunities to "fail better." Each "risked-fall,' if possible, becoming an opportunity to get up. Bettering what was. Questing defined, and delineated, "good enough." Not illusive perfection. "Failure" dimens to be ionalized as "fostered betterment" offered in schools as part of formal studies. Framed with, and by, never ending asking of "legitimate questions." Which challenge the created-calm of too early, sought after, closure. Closure is for zippers and buttons. Not for effectively living with ever-present uncertainties. Daily unpredictabilities. Random, and unexpected, outcomes. Awareness that "total control" is a myth; notwithstanding ones efforts. Influencing is viable.
Gordon (Chapel Hill)
I understand the importance of free markets and spreading wealth, but just can't get my mind away from the destructive amount of waste and pollution the global economy is producing. I fear climate change more than I fear a drawback of capital's reach.
Slurping Oysters In (Portland, ME)
As a millennial who, believe it or not, has never purchased anything on Amazon, I look around at my peers who have deliveries daily or weekly and who purchase trendy products directly from Instagram. I often wonder what percentage of American spending in the economy is propped up by unnecessary materialism. Absent said materialism at the scale of the entire US economy, what a thrill it would be to see the fantastic market correction on both Wall Street and Main Street.
Ager Publicus (Bigfoot County)
@Slurping Oysters In "I often wonder what percentage of American spending in the economy is propped up by unnecessary materialism." I'd say a whole lot. You wouldn't see ads for those trendy products on instagram if they weren't working.
Inspired by Frost (Madison, WI)
"Constructive engagement" brought quick profits and cheap radios to the U.S. and some liberalization in the former communist world. The hard diplomatic work and tradeoffs, especially on nuclear weapons, was left undone and has come back to haunt. I suspect that fixing Ukraine will require fixing (and implementing) lots of other institutions and understandings.
Leon (Florida)
Anne Applebaum said recently that when a democracy trades with an autocracy the autocracy becomes more autocratic and gets stronger. She is 100 % right, we know it but still do it making our enemies rich and powerful. Putin would have never invaded Ukraine or threatened the world with nuclear weapons without that war chest of 600 billion plus provided by Europe, mostly Germany. China would not have ICBMs pointed at American cities without that monstrous trade deficit that we have with them. Even India that benefits from a positive trade balance with the US uses that money to buy Russian weapons, thus becoming dependent, or so they claim on Putin's ambitions and day dreams. We know that trade is a weapon and we should not grant that weapon to those bent on destroying us. Why take our money and technology to China and not to countries that are friendly to us? To continue that path would only make a reality of Lenin's prediction of for the the rope that will be used to hang us.
@Leon Throwing numbers left and right don't make them facts. FYI, India's trade balance with the US for 2021 stands at a negative 33 billion. So, India is "giving" money to the US with which the US is hurting India? When you trade you are exchanging cash for goods. In fact, when countries sell goods to the US, they are getting worthless paper which is again lent back to the US. China holds 1.3 TRILLION dollars worth of Treasury Bonds which is like interest free loan to the US. If Russia earned 640 billion from its exports, that is their money, not yours. When you exchange cash for goods on Amazon, that cash is not yours anymore, it is Amazon's.
Juan Santos (Spain)
Is it over to print money from thin air and buy raw materials and energy products from less developped countries?
cjg (60148)
Authoritarian governments are efficient in that they get things done. Democracies are messy, with bickering and rivalries and elections. A dictator can dictate and who is going to tell him he hasn't thought of all the ramifications? Democracies battle it out in Senate chambers and over the public airwaves. So who has it better, the one who has all decisions handed to him by basically one person or the person who must feel guilty about ignoring politics because of all the mess? Most of us would rather make a reasonable living at work and then go home and watch TV. The Final Four is on this weekend.
Doug Terry (Maryland, Washington DC metro)
There is a very dramatic, hard lesson being taught to American corporations right now. It started with the pandemic and continues with the war in Ukraine. The first part is fairly simple: they have allowed themselves, and us, to become far too dependent on overseas suppliers. Why did they allow this to happen? Deep, abiding greed was involved. Lower costs meant easier profits, smiling shareholders and big bonuses for the bosses. The Asian tigers, along with Mexico, Ireland and onward, eagerly sought the business and proved repeatedly that they would do almost anything to keep it, including having workers do twelve hour, overnight shifts assembling early iPhones, with a biscuit for lunch, when a problem had caused delayed deliveries. The foreign producers, assemblers, and manufacturers were far more hungry for business than the domestic ones. The textile industry in the states appeared to throw up its hands and surrender. The same for furniture manufacturing. Flat screen televisions? Gone. Video recording cameras, professional and otherwise? Made elsewhere. The list goes on. In their defense, when competitors go offshore and can charge lower prices, one company feels forced to follow. It was a mad rush to higher profits. We have placed ourselves at the mercy of shipping, fiber optic networking communications and, as noted, the stability and goodwill of unstable nations that can turn on us overnight. Now, other countries hold the cards at the table where we sit.
Frank Saltaire (Tarrytown)
@Doug Terry you make good points. addendum: it's been well-established that the demands of Walmart for their suppliers to enable their "everyday low prices" began the mass exodus of manufacturers who, as you point out, needed to compete with each other inpart to meet Walmart's demands. and the four Walmart heirs have more wealth than the poorest 25% of the U.S. population combined.
cmd (us)
We have seen the enemy, it is us. The textile manufacturers ("manfs") did not "throw up its hands and surrender." Some quickly offshored, others fought long battles to bankruptcy. Who was smarter? Why are US manfs unable to compete with Bangladesh? Bang textiles are cheaper, even shipped round the globe. It's labor-intensive and Bang labor is far cheaper than any US. US's standard of living is higher, wages, manf cost, prices are higher. Leveling means lowering US or raising Bang wages. But capitalism chases cheap labor; when Bang wages rise, manf goes to Congo. Unemployed Bangi will lament same as US -- just as a solid middle class begins to develop, rug is pulled out. (ptp) Exactly as in China now. Xi knows: There is no more rapacious and uncaring force than *unfettered* capitalism. Third way, US pays more for US goods, knowing higher prices is the cost of building wealth in the labor class. Clearly lost on the US; Wal-Mart and Amazon are proof. Any Wal-Mart shopper loses all right to decry loss of US manf. A strong local economy means spend locally and pay more. Or use tariffs to inflate Bang prices. Long history of catastrophic unintended consequences. If capitalist manf, driven by consumers, has no loyalty to labor, is it worth lamenting? Do you rly want to rebuild by stamping out plastic bits? The golden age of manf is passed, now a relentless race to the bottom. Esp since automated manf will recreate only 1% of lost jobs. Future will not look like the past.
Sam (Columbus, Ohio)
Globalism and trade (goods, services and capital) between sovereign nations is a physical reality and it always has been. Differences over time are measured in degrees. For example, the financial panics in the US that occurred after the Civil War were echoes of financial failures in England. The extent to which a nation's economic and governance system respects this reality can change as a matter of law. But a law or governance system that seeks to resist physical reality will be costly to erect and maintain and give way -- it is just a question of when. If a wiring harness comes from the Ukraine or Mexico, international trade is required to get it to some other nation. There is no historical analogy to reach for when it comes to scope and duration of the international coordination and cooperation required to address the GLOBAL risks of "climate change". Putin's war has provoked a more aligned international response from NATO members and partners; a force for international unifiction. Deadly viruses don't know or care what nation they invade and occupy. If you are a business leader, I suspect you are more worried about the dysfunction and unpredictability of our governance systems. Any meaningful onshoring of manufacturing is going to require a massive amount of international trade, immigration and domestic energy production. Yes, war affects economies regardless of whether the war is waged by a authoritarian form of government or by a democracy.
Jim (Placitas)
I'm fully aware of the implications of the demise of a globalized economy, but when I read columns like this there is part of me --- admittedly small, perhaps irrational --- that says good riddance. I have never been able to come to terms with the perpetual, infinite growth imperative that underlies the global economy, in a world defined in every regard by limited resources. How does an entire planet grow 3% every year by consuming itself? Of course, the pain of unwinding such a paradigm is obvious given how dependent so many are on sustaining it. But the vulnerability of the paradigm to the vagaries of human behavior --- irrational wars, irrational accumulation of wealth, inscrutable political motivations --- begs the question of why we would want to put the safety and security of so many people at the hands of a system that has made its own survival first priority, with the safety of the world a distant second. That feels upside down. We consume at an unsustainable rate, which requires entire economies to be dependent on some kind of monoculture, whether wheat, or clothing, or wire harnesses. We burn fossil fuels at a rate that is destroying the planet, yet when disruptions to global markets send gas prices soaring we immediately look for ways to bolster the supply and drive down prices. It's hard not to secretly hope it all comes crashing down. It may be the only thing that drives us toward building a sustainable model.
Norm (US)
@Jim You an millions of others have despised the effect of globalization on our country and for very good reason. So good riddance? Absolutely. Next time we have to built up a system that respects democracy first.
ATS (Madison, WI)
Makes sense that we are headed for de-globalization of some form or another. But what will stop Bangladesh from exporting garments? (The link to the McKinsey report doesn't seem to answer this question either.)
Joe S. (Chicago)
Stealing a line from John Lennon, "Imagine there's no countries," and further imagine the motivation of the dictator is preserving national identity. In a globalized world, what distinguishes Russian from American or Chinese from German? Perhaps Russia's war of choice in Ukraine is about removing itself from the forces of globalization - i.e., homogenization, and preserving a sense of identity?
Frank Saltaire (Tarrytown)
@Joe S. " Perhaps Russia's war of choice in Ukraine is about removing itself from the forces of globalization - i.e., homogenization, and preserving a sense of identity?" Putin is an ultra-nationalists who believes that Ukrainians don't exist except as part of the greater Russian identity. that's the kind of homogenization he wants. i don't think he wanted out of the global economy--because that's a big part of how he & his cronies have achieved their wealth.
Joe S. (Chicago)
@Frank Saltaire -I agree with you that Ukraine represented to Putin a mere facet of "greater Russian identity." That to me only reinforces my overall contention that a "Russian identity" is in Putin's mindset under threat and conquering Ukraine was necessary to preserve that separate identity.
Typical Ohio Liberal (Columbus, Ohio)
Economists put economic efficiency above all else since the 1980’s. They seem to have forgotten that economics is a branch of social science. Economies are artificial creations of the societies that they serve. That was a long way of saying…cultural, societal and political realities matter when you are making economic decisions at the highest level. Using China as a source of cheap labor made sense in a purely economic analysis, but it was irresponsible in terms of the political realities of the Chinese government. We empowered a corrupt and repressive dictatorship. There were dreams that opening the Chinese economy would also open up its society. Anyone who has read history knows that was a pipe dream. Power does not work that way. The more power a ruling elite has the more tightly it will grasp it. The CCP has done just that. The question for us now is what to do next? Honestly, we have put ourselves in quite the pickle. With growing anti-Democratic currents at home and painful economic decisions on the horizon, it doesn’t bode well for our democracy. At best, it is going to be a bumpy ride for a few decades.
Ben (Canton,NC)
@Typical Ohio Liberal I seconded that! Globalization, if only it could be limited to just dollars and cents, would be great. It's not the economics, it's the politics.
David R. (France)
Since I am having trouble distinguishing 'their' oligarchs from 'our' oligarchs, I doubt that any of them will tolerate much disruption for very long. Once Putin can be removed it will quickly be business as usual. The lesson here, though, and one that will keep coming at us in one form or another until we get it, is that globalization requires peace. It's a pity that disarmament wasn't pushed through to the limit in the 90s when there might have been a chance, because MAD turned out to be nothing more than a formula for nuclear blackmail. Of course, if we don't tackle inequality around the world, and within our own countries, all this will be academic. Reduced globalization was certainly one of the outcomes of WWI, but revolutions, social breakdown, economic collapse and WWII were perhaps more significant ones.
Frank Saltaire (Tarrytown)
@David R. "Since I am having trouble distinguishing 'their' oligarchs from 'our' oligarchs" :) :)
David Kesler (San Francisco)
In order to make the world safer, we need to definitely rid ourselves of the "will to autocracy". Tragically, I believe, this cultural meme is interwoven, perhaps at the genetic level, to humankind. As hunter gatherers we were compelled to follow the tribal strongman. Its in our archeology as well as our holy books. Indeed, Jesus, was almost an anti-strongman, lest we forget. Our religious books are filled with tales of singularly beautiful souls fighting against authoritarians. It would appear that the beloved religious books of humanity are tomes of how to fight against the autocratic impulse. So is the devil an autocrat. I think so. As Carl Jung pointed out, "God" is failure. We are given insight to our holier selves through the cracks in our illusory egos. I believe we will be fighting our dark energy (our autocratic Id) to eternity. It may mean that there is some fragment of human progress that benefits from the will to power. See Nietzsche. Yet it is within human capacity to limit and regulate the Lion. We simply must. Putin, once again, reminds us of the dangers.
Ben (Canton,NC)
@David Kesler This really brings to mind Desmond Morris' "The Naked Ape". Hunter-gathers could spare a leader after a bad hunt by blaming someone not present: God.
wvcpoguy (new orleans)
For me the price of gas in the US is still a bargain. I lived through the gas rationing of the early 70's and I don't remember huge disruptions, just hassles. It taught me that gas is a bargain at any price, if you can get it. Look at the russian mechanized divisions running out of gas. It was priceless to them. So I've taken fuel use and consumption into consideration since then. Vehicle choice, bicycles, walking, public trans as applicable and available. What have you done for the last 50 years?
Paul Plummer (Coon Rapids MN)
Globalization is here to stay, short of a nuclear war. Adjustments will be made from time to time, but it will continue. We have a world wide infastructure and it will be used. And it's not just about low wages, some things just cannot manufactured in the US anymore. Over the very long term, automation will give us wage equity across the world.
cmd (Austin)
"To make the world durably richer, we need to make it safer." ... more educated, sustainable and, likely, democratic.
Robert Scull (Cary, NC)
The first globalizaiton took place after the Portuguese sailed around Africa and the Spanish made contact with the "New World." Within a few generations crops that were once only grown in one hemisphere were grown in both and the slaves from Eastern Europe (the origin of the English word slave is Slav) were replaced by slaves from West Africa who were available at remarkably lower prices. No globalization trend since then was as revolutionary as that one and Europe became so prosperous that they began to develop a superiority complex that was later expressed in a duo of courses known to us as "Western Civilization" with its remarkably Eurocentric tunnel vision of world history that has led to so many errors in the recent memory.
Frank Saltaire (Tarrytown)
@Robert Scull well put, thanks. read the beginning of THE COMMUNIST MANIFESTO -- Marx, a great historian, describes the advent of globalization & modern capitalism in absolutely thrilling (if disoncerting) prose that applies equally well to our own time.
Noley (The Late, Great Planet Earth)
Globalized trade or not, just follow the money. Having various nations in and out of the mix won't matter if there is money on the table. Some nations, companies and people will make moves to get richer, others will not. Businesses and people will adapt, and in 50 years (assuming there is still some semblance of civilization) the year 2022 will get a few pages in history books, with a few paragraphs about this thing called globalization of trade.
Joan Senator (Patchogue)
@noley, apropos of your comment, I refer everyone to rewatch the movie "Network" in which a protagonist says there are no nations, just the ebb and flow of money.
Lynne (New England)
I’ve known several BIG big business people over the years, as well as one high-profile political scientist focused on global economics. These titans could’t get enough of capitalism or of sending jobs — all jobs under their control — to shaky overseas countries. One rhapsodized that China was the best thing that’s ever happened to US business. One declared if he could save $1 by having his entire business overseas, then it was a good thing. One of them is now on a 6-week world tour, desperately working out how to bring his global empire back home. Finally….
Gardener 1 (Southeastern PA)
My mom—along with many of my friends’ moms— were seamstresses in dress factories scattered throughout NE PA when I was a teenager. I’m 73 now, and remember seeing a Walmart commercial on TV when I was in my late 20s. It touted ‘Everything made in America.’ Today, one is hard pressed to find stuff there that’s made here. Biggest bait and switch for consumers. Heck, much of the MAGA paraphernalia was (is?) Made in China—making that country, I guess, great again. I know the Walton megacompany isn’t alone. Yet, I still look for Made in America labels on clothing (and am hanging on to a warm winter jacket made here that I found 35 or so years ago). It’s the least I can do for Mom, hunched over a sewing machine to help contribute to our household income.
It's me (West)
@Gardener 1 Buying made in india or china is going to be a one direction flow. not a win win for us and they're good friends with Putin's Russia. No respect for human rights or borders. Buy less but as local as possible.
William Burden (Penn Valley, CA)
Buy less, buy better. Buy value, not price.
Somebody (Somewhere)
I like your analysis. But I would point out that your comparison of the impact of global recession on say the US versus Bangladesh can also be extended inside of national economies. Inside the US for instance, such a recession will have little impact on New York City. But 150 miles to the north, your hometown of Albany will have its economic growth pummeled. That happens at every recession in the US. The major cities continue to thrive, the second level cities stagnate, and the third level cities die. I'm not sure what the lesson is in that. Perhaps do like you did, move out of Albany to New York City. But I'm too old to do that now. I'll just visit and take in a show.
Marie (BOSTON)
The wealthy and global corporations have no allegiance to anything but their billions. They move manufacturing and production from the US with the sole intent of making more money. How much is enough? As long as someone else has a bigger boat, and taller tower, and prettier wife there is never too much. It should not only be a matter of pride and patriotism to build the economy of the United States and see a vibrant landscape people working but the full economic impact of their "offshoring" work should be borne by these companies, not the people, communities, and small businesses they leave behind. The benefit/cost ratio needs to take into account the full costs of their actions.
Somebody (Somewhere)
@Marie Having been in that position to move work overseas, I would have to say it is really about a competitive playing field. If your competitor is moving production to China, they now have a cost advantage and can undercut you and put you out of business. So, you have to move to China. The real problem is that we haven't decided what if anything is worth keeping in this country and put duty/tariffs on just those products to keep that production here, or more likely move it back here. Computer chips are strategic (aka needed in war). We probably should have duty policy that drives more production to the US. If the chips are produced in the US, then we may want to put duty on products that use them in order to get some of that production in the US as well. If we are making more chips, then perhaps we will mine more rare earth materials in the Nevada desert as well. What else is strategic? Steel, ball bearings, Copper, etc. Same deal there. That is how you do it, you pick one thing. You don't do like Trump and just tax all goods from China.
Marie (BOSTON)
@Somebody " If your competitor is moving production to China, they now have a cost advantage and can undercut you and put you out of business" I don't know if people are intentionally lying or just repeating the "free market" drivel they've been told. They won't undercut you. Why should they? If you sell for $10 they can sell for $10 too and keep the difference in profit. So you move, still charge $10, and keep more as profit. Just like if Ford raises their prices Chevy rises theirs. They don't keep their prices lower to undercut the competition, otherwise they say they are losing the profit they could have made Chines made Buicks aren't cheaper than their competitors. I recently bought a metal hose reel for my home. It is a brand you can find on Amazon. They moved production to China. Their prices didn't go down. In fact their raised them. When I wrote customer service I got the expected corporate pabulum about how their price was a fair value price. So they moved to China, lowered cost, and kept more profit. I also bought jack stands for a man in my life. i read the reviews about how excellent it was, and it was made in the USA. But by the time I bought them they had to put stickers on the jack stands covering the made in the USA with Made in China. Did the price go down? Of course not. I grew up in a town that made precision ball bearings, optics, printing machines, & shoes, I then worked for a computer company that made its own chips.
Frank Saltaire (Tarrytown)
@Marie as long as you can make a profit of $10 million, or $10 billion, selling stock and pay only 15% tax it's gonna be a tough sell to get this under control. :(
John (Hartford)
Sorry Paul comparing now with the economic reverberations of 1914 is absurd. Take a look at the share of world trade accounted for by Germany, Austria-Hungary, Russia, the British Empire and the French Empire in August 1914. And despite all the talk about the first globalization the scale of globalization and the degree of integration was much less then than now. Russia today has an economy only slightly larger than that of Spain. Yes, it has the ability to disrupt certain important markets notably energy for a while but they are going to quickly adjust and most of them like the US are currently booming. China is not going disrupt the exports on which a third of its economy depends. So yes we're probably going to see some retreat from globalization at the margins but most people are not going to notice.
damon walton (clarksville, tn)
Great history lesson, for the past is prologue.
just Robert (North Carolina)
When authoritarians start to lose economic power at home because they have shot themselves in the foot as Putin has done they begin to create havoc in the rest of the world. They want to have control of the world economy but only on their terms. It would be nice to think that the US could just pull itself in and ignore authoritarian regimes as we did before WW1 and 2 but this has not been the way of it. We live in this tiny shrinking world for better or worse and we need to find a way to live together or that will be it for us and our pretensions of global mastery.
Steven Daly (New Hampshire)
Won’t deglobalization put upward pressure on inflation?
KaneSugar (Mdl Georgia)
@Steven Daly It will, but most people, especially Americans, don't get that.
Giacomo Cirrincione (CT)
@KaneSugar Many of us do, in fact, "get that." We don't care... Globalization is a farce. We want national dominance and security.
Joe (New York)
Globalization requires cooperation. Dictatorial power is the antithesis of cooperative behavior. America and other civilized nations who believe in democratic principles should not support dictatorships. Unfortunately, our history is full of such support. I certainly fear Professor Krugman may be right about this. The effect of Putin's reckless blunder may be impossible to undo. The primary area we must be wiling to look at is the market for fossil fuel and how it operates. Russia's exports of oil and gas, by far the most important source of revenue for Putin, did not drop by one tablespoon after the invasion. The price he received for that fuel, however, skyrocketed. Russia set a record for surplus revenue as a result. The increase in price effectively paid for the carnage in the Ukraine. Again, there were no disruptions in the flow of oil yet prices surged. American oil companies made out like bandits. Saudis were happy and so was Putin because traders in oil, betting on a future that was uncertain, made the despots rich. And we made that possible by accepting that the cost of Putin's evil actions should be paid by us at the pump and in our ConEd bill, instead of being paid by the oil and gas companies. Their profits were considered sacred. They are never asked to sacrifice. That must change.
Steve Bolger (New York City)
@Joe: Most private corporations are run as dictatorships.
TFT (Lanesborough, MA)
Plenty of talk of related financial and political issues - what of the environmental implications?
Peter (CT)
War, just like oil, is a baked in necessity of the Superpower economies. War in Afghanistan was preferable to war in Ukraine, but... whatever. Don't overthink it. Russia has oil. Let me say it again: Russia has oil. As soon as the fighting stops, the Susan Collinses will announce that Putin has learned his lesson, the sanctions will be lifted, and the world economies (especially the big ones) will be fine, happy to have a reason for a new arms race and a destroyed Ukraine to lend money to. Clues are that there doesn't seem to be any serious new plan to ramp up alternative energy production, getting rid of Putin is such an unacceptable idea, one is criticized for even suggesting it out loud, and the behavior of the stock market. Paul Krugman can't help it. He went to Princeton, Yale, etc, and won a Nobel Prize. He's clearly had all the common sense educated out of him.
Kumar Aiyer (California)
Mr. Krugman's arguments are conveniently neglecting a stark truth. The United States also has an unenviable record accomodating authoritarian regimes like many Middle Eastern Kingdoms in the name of globalization and economic growth. The truth is somewhat of a bitter pill to swallow. Our liberal western democracies have been as much an enabler of Putinesque tyrants the world over. Sad but true.
Homer (Seattle)
@Kumar Aiyer Well said.
Walter Nieves (Suffern, New York)
Paul Krugman believes that globalization is contracting , however if we analyze the number of countries participating with American sanctions we do not find South America, Mexico, Africa , India, China, Asia, and the middle east...they do not wish to, most likely because they can not afford to. The future will continue to favor suppliers that offer commodities and finished products that are affordable and useful ...such as food, energy and medical supplies. No country in the world is self sufficient ...all countries have needs that once supplied by outside sources allow their own economies to produce commodities and products that they can sell on the world markets. A product as simple as bread and an article as complex as a computer are now interrelated and it is hard to imagine that in the future they will be less integrated and that the global economy that allows for this integration will be anything but greater.
Ski bum (Colorado)
Globalization is here to stay. The rapidity of entrenchment will be in stops and starts. As the politicians play global politics and start and stop wars, skirmishes, and disputes, globalization will wane and then gain steam again. There’s no stopping it because of technology and advancements in transportation and communication. The internet has shrunk political boundaries, what most people call country borders, tremendously and will continue to do so. This is a good thing because only if we stay United will the human race survive. Divisions kill us. About the only thing I see stopping globalization is global climate change and its effects on humanity. Solve this problem and eventually the world will become one unified, economic powerhouse.
This was supposed to be the year when lives returned to normal after 2 years of death -parading viral dances . Instead we got a war out of nowhere . Wait ! This was going on for last 30 years .It was bound to draw our attention eventually. Well just like the virus . For decades . we have been re-engineering the viruses and anthrax and been experimenting with pathogen ,also been expanding into wild life habitat not disturbed by human for for millennia. Economy ,we don’t like today and will definitely won’t like tomorrow also has its beginning decades earlier . This global economy has not served the global south . Global south has found a level playing field just like they did find recently in the havoc wrecked by Covid . They see an opening that may allow room for justified maneuvering that been long denied to them . 1913’s lament by Mr Keynes is pregnant with a lot of history but also with it’s correction . Global south was under the boots of colonial power and that scenario of ordering anything or receiving anything from anywhere with or without stepping out of the door was remotest and next to impossible. The dreaded existence won’t cease for until another 30 years . Current economic arrangement is being agin broken by an European issue . Historians one day will be inclined to dissect it more nonchalantly and impartially. Russia has inadvertently altered the nuts and bolts of the globalization and there’s no no going back. Russia is not pariah also to the majority.
Nicholas Halfinger (2021, January)
It’s possible to go a little deeper on this. It’s not just war and authoritarian leaders we have to worry about. At the core it’s about greed, fear, and stupidity. There’s no shortage of any of those anywhere. There’s another reason to reconsider globalization: climate change is increasingly a disrupter of global order.
Doug (Pittsburgh)
Trading with autocracies is self destructive and idiotic. But there is less and less reason for much of world trade. The argument for trade has always been that each area can produce what it specializes in best but the reasons for those differences have largely disappeared. Management and Labor knowledge and skills can travel around the world as can capital. Raw materials can be transported w/o the need to use them where they are available. Weather is a factor for agriculture but less so than in the past. At this point trade is largely motivated only by cheap labor and contributes horrendously to the environmental cost of products.
Hmmmmm. Kill the global economy? Then we wouldn't have superpowers wasting gas shipping cars to each other - saving oil and reducing pollution; predators wouldn't be sending jobs abroad so they could earn billions instead of millions; and America might be able to support manufacturing jobs. On the other hand, if the only metrics we use are profit and efficiency, then any threat to globalization is to be feared.
SAF93 (Boston, MA)
Professor, let's also remember that the oligarchs and strongmen who are destabilizing the world economy and undermining democracy include billionaires in the USA and one of our two major political parties. How can we have peace when the disparities between the haves and have-nots keep expanding?
Guido (Cincinnati)
Happy Unhappy April Fool's Day. Cheer Up, tomorrow is Groundhog Day! The only guy laughing should be George Santayana, yet he's sighing and crying. Once again, Krugman gives us the sad and bad news that's more real than any fake news we've become pathetically addicted to. It's not as if we didn't see this rodeo coming. It's that we've seen it too many times before without learning how to temper it. As the Good Dr. K. also notes, more's the pity to those second and third tier developing countries that will suffer the most. As always.
Swamp Yankee (Haddam Neck CT)
Putin has decided that he will destroy Ukraine completely if he has to, to win. Make no mistake, that decision has been made. We are not at war with Russia but we are pretending we're not. This is a mistake. Putin needs to know, if he persists we will destroy him and Russia. Without that threat nothing will stop him. If he succeeds he will expand is ambitions, because he has figure out we are too weak. That is the decision we are making right now. Let's not make this mistake, let's kick him out of Ukraine now and make him pay to rebuild it. We have no other choice.
JerryV (NYC)
@Swamp Yankee, Emotionally, everyone I know feels the same way, and this seems to be mostly bipartisan. But how do you balance that against a losing Putin initiating a nuclear exchange?
Usok (Houston)
A war between Russia and Ukraine occurs in Europe won't wreck the global economy. It only exposes some weak links of the global economy. A single dominant US dollars used in global trades could stop the flow. Putin cannot kill the global economy. Our US dollars will do the honor.
Philip Brown (Australia)
"To make the world durably richer, we need to make it safer (from the whims of dictators)". Given the modern plethora of dictators, this means that this is as good as it gets people. I cite the fact that America escaped a dictatorship by the thinnest of margins in 2020; and the threat is still hovering in the dingy recesses of your Republican Party.
It's me (West)
I think and hope that quite the opposite could soon be happening: Will the global economy kill Putin? The more despicable deeds are committed on the battlefield and diplomatically, the more countries and people will understand what Putin's Russia is and boycott/avoid Russian ecnonomy. A complete cut-off with the exception of few flows from India and China and some other usual suspects is a highly probable scenario. So, it will take very little before the Russians, who might be not as docile as we thought, will turn against their leader too. That could also be a chance to democratise Russia for the generations to come.
David F (Florida)
I think you are wrong on this one. What WW1 really ended was the structure of empires based on monarchy’s. What we are seeing today is possibly the end of neoliberal corporate control. The war in the Ukraine is actually a attempt to stop the neoliberal expansion represented by the US, NATO, EU , Corporate coalition. One very interesting aspect is the rapid retreat of the economic arm of this coalition from Russia itself. Another interesting feature is that this conflict is primarily a economic war with the US being the major force in the fight to expand the “new world order”.
Patrice Ayme (Berkeley)
The price of globalization through plutocratization was democracy. Our freedom is surely worth paying a bit of it through lesser GDP, especially considering most of that GDP goes to oligarchs… Russian oligarchs are a product of globalization through plutocratization, same as Rome, with Putin playing the role of Jugurtha. Globalization through plutocratization made dictators in Russia and China very powerful. Xi made alliances with many US oligarchs and developed a murderous surveillance tyranny in close cooperation with the biggest global tach firms. All of this without paying taxes, claiming to be tax free foundations and advising, or controlling even the mightiest states, even in an educational role (foxes teaching chicken the ways of the world). As this global corruption festered, pressing issues such as nuclear weapons and the CO2 crisis were not addressed beyond smoke, mirrors and windmills… Evil-power, plutocracy, is a corruption of hearts, desires, and even pleasure. Plutocrats take pleasure in other people’s misery: this is why Putin goes around, saying that his war in Ukraine is going according to plan: what Putin wants is flattened cities. As they hog resources for their clans, global plutocrats want to flatten the rest of the planet, knowing well that increasingly more miserable conditions will lead to war, the unspeakable evil. Plutocratization, especially when global, brings world war. It brought it to Rome, it brought it to 1914, it brought it to us.
Mua (Transoceanic)
Obviously, a narcissistic dictator with nuclear codes, whether it be a trump or a putin or conjoined monster thereof, has potential to wreak havoc on the global economy. Whether they do or not really is a matter of how many corporations (from oil corps to Blackwater to FOX to Wagner to multi-billion dollar MLM "Christian" ministries) are willing to take advantage of the havoc being threatened--rather than seek the calm path. So, no, it does not come down to one madman. It comes down to complicity. And greed ensures complicity in abundance. Scary, no matter what.
Tim (Glencoe, IL)
Putin doesn’t want to kill the global economy, he just wants to control it. By controlling a large share of global wheat and oil.
Big Headed Johnny boy (Mistake-on-the-Lake, Ohio)
Time to shift significantly from China to Mexico, something that has been my mantra for a number of years. It’s a win-win. Lowers shipping costs, improves Mexico’s economy and, even maybe, help grows its economy enough to absorb migrants from Central America. It also has the potential to weaken the Chinese economy. As for Europe, shift more production to Africa for the same reasons. Europeans and Americans are their worst enemies. Instead of improving the economies of nearby countries, we instead shifted production for a few cents of savings to one the worst countries in the world. Shame on us!
How Much Is Enough? (Northeast)
China said in the 90s (paraphrase): “we will beat America by feeding their greed.” I wasn’t sure how but I fully understand now. And with their human rights violations we just can’t quit the greed.
Aaron (Orange County, CA)
@Paul K Questions for you... For the most part- Aren't Americans the world's biggest consumers and spenders? We have ready cash and plenty of credit cards to run up. Isn't the US too lucrative a market for China to willfully ignore? Who will they sell their Walmart goods to- Africa and Russia? Those populations don't have any money- they never have.
truth to power (mexico)
I worked in China for 5 years and left with 2 strong impressions: 1 the Chinese people are good, intelligent, hard workers 2 the Chinese government is corrupt and unreliable If I was still in business I would quickly reduce my risk by moving operations out of China.
Jeff Atkinson (Gainesville, GA)
The EU is "moving" to end its dependence on Russian oil & gas? Actually, the EU is talking about moving to end its dependence. Talk's cheap and it serves the purpose of eating up time.
Angry Liberal (Ann Arbor)
I think we are going to see nations sort themselves into economic "friends" groups.
Emil (Pittsburgh, PA)
There is always a silver lining in a war; the shrinking of the globalized world might just be the ticket that returns equipoise and a belated civilization to the world. A functioning world trade system infected Putin with the hubris to invade Ukraine. Stability blinded him. The ease of requisitioning needed military supplies from a responsive supply chain, then paying for it with petrodollars—which because of sanctions, suddenly vanished—might just put an end to this dreadful war. Add to it, Putin's ploy to require payment in rubles backfired. Europe called him on his bluff. Amid the tragedy in Ukraine, which may escalate in the coming week, if it hasn't already, might prove a blessing for Mother Nature. Environmentalists, labor leaders, small business people, agrarian communities, fisheries, and many thousands of others might be secretly applauding the destruction of a interdependent world trade system that has evolved in the last thirty years. Oil is the poison that may kill the goose that laid the golden eggs. The only dark cloud is President Biden's decision to release millions of barrels of it from the national reserve. We don't need it. Inflation is not that threatening, and it might forestall a much needed retreat from fossil fuels.
JiMcL (Riverside, IL)
The problem with having one customer is having one customer.
Sparky (MA)
i think the u.s. should take advantage of its geography, between two oceans, and focus on creating an economic zone throughout north and central america .. all those factories in china could be moved into this zone, enhancing these countries and solving one of our big immigration problems .. details, details, yes, but it's worth thinking about
Phillip Promet (Crystal MN)
"...what Putin has taught us is that countries run by strongmen who surround themselves with yes-men aren’t reliable business partners." [op cit] Beautifully put! Perhaps, we could include that wonderful little gem in, "The Book of Economic Proverbs"? I say, "Yes!"
What happens to global economics, Paul, when the U.S. joins those nations led by the whims of dictators?
Eli (RI)
Slowing down the world economy is the only way of slowing down investment in the energy transition. After turning to coal loving Trump with no results, the dirty fossil fuel magnets turned to Trump's brethren Putin. This shall fail as well and half a quadrillion USD worth of proven of fossil fuel reserves, at current prices, will be zeroed out. Oil will turn into valueless toxic goo to be left underground for eternity, and so will putrid methane, and filthy coal.
cbarber (San Pedro)
You know i would be willing to pay few extra bucks for American made goods. Its only money.
john keeley (beavercreek oregon)
If we give our lunch money to the bully , he will never go away, but our lunch will .
Michael Jennings (Iowa City)
believe in the rule of law - the United States? Not really.
Nancy (Great Neck)
But while China hasn’t invaded anyone (yet?), there are troubles on that front, too.... [ Forgive me, but this is a sadly unfair passage. China has been and is a country supporting peace. ]
Candace Ward (Tallahassee, FL)
In which the mildly progressive Paul Krugman emerges as a champion of corporate globalization. (Samir Amin would like a word.) The crushing toll that decades of neoliberal trade policy have had on billions of poor people planetwide (the crescendo of climate catastrophe that it brought with it)--nowhere in evidence. Strategic delinking and localized production for basic needs--anchored in food sovereignty--are the only things that can save us. Some some. Maybe some benefit if these are forced upon us? Don't hold your breath. Get that oxygen while you can, friends.
hawk (New England)
Will Putin Kill the Global Economy? My money is on Biden, in fact I’m all in Two reasons, Biden already started by killing the US energy sector to appease the green dreamers. His fantasy “budget” includes 11 new taxes on the gas and oil sector Second and more importantly is scale. Biden sits on a $23 trillion dollar economy, Putin’s economy is $1.5 trillion or a bit less than the State of NY. The US DOD budget is nearly half that number It’s a safer bet Professor. And here’s my beef with Keynes fanatics. John Maynard Keynes lived in a era when Government revenues came from tariffs, not income taxes. The 16th Amendment was ratified in 1913, taxes on income was very limited prior to that. Tariffs don’t change behavior, taxes do, otherwise we wouldn’t have tobacco sales taxes, nor would us Patriots have thrown the tea in the Harbor. Boy, that got their attention! But how does the Middle Class get Bidens’ attention? He’s tone deaf. November’s coming
dj sims (Indiana)
Thank you Paul for finally looking to the correct analogy. Much confusion could be avoided if more people realized that now is analogous in so many ways to the early 1900s.
DCN (Illinois)
I find it baffling why there could not have been some combination of free markets combined with national security input from government to make appropriate business decisions. Instead we went for cheap stuff at any cost. We now are learning that making our economy subject to the whims of authoritarian governments may not actually be the least cost decision. The current shortage of computer chips if probably the best example of that thinking.
Whit (Vermont)
What if we restructure to a democracies-only global trade area? The democracies could put 100% tariffs on goods from dictatorships, with the income from that to be spent on energy independence for the free world?
FMT (Oregon)
It all comes down to resources, and those who control them. The modern age came into being through the industrial revolution. It had its birth in tiny Britain, small geographically, but hugely rich in all the resources necessary for that huge step forward into a brave new world, coal, iron, and strangely wood. An abundance of trees which became charcoal, leading to the development of the first blast furnace. Now as we face depleted resources, resources that fuel our new economies, we are back to square one. All eyes on Greenland, that Trump thought he could "buy", especially rich in minerals, notably cobalt. Maybe back to our ancient beginnings, a world of war lords, fiefdom and barter? Traders in wooden boats roaming the seas with their homegrown goods, just as middle eastern traders, sailed into tiny British coves and bays to exchange their wares for those precious British resources, just as camel trains made their way through Eurasia on the fabled silk and spice routes, all those years ago.
FMT (Oregon)
@FMT @FMT apologies for the inaccuracy regarding the origin of blast furnaces, first developed in China. It was the availability of coal used to make coke, in Britain, that led to the development of modern blast furnaces by Abraham Darby, capable of producing commercial-grade iron. My memories of high school history lessons are dimming with age.
E.B Ummel (Walnut Creek, CA)
If the US elects an authoritarian regime in 2024, we may become one of the markets from which the remaining democracies begin to divest.
LoungeLizard (Vermont)
I'm no economist and not much of an historian but I'd wondered about the 1914 undoing as well. This must be apples and oranges but here we are, Hubble and Webb have given us cosmic reach and yet meanwhile back on our blue dot we lurch forward and then turn the tables on ourselves. Maybe we're the experiment?
eclectico (7450)
Even though short, an excellent overview of globalization (although I'm not worried about Bangladesh, I'm sure we will continue to consume clothes as fast as soda water). Good observation about our disregard for safety and security in our lust for cheap goods; buying free-world manufactured goods is more expensive, but comes with a built-in economic insurance policy. The other day I bought a bottle of aspirin at a local, family-owned pharmacy, did I pay more than I would have at CVS ? I don't know, and I don't care.
Enobarbus37 (Hopkinton, Massachusetts)
Our trillion dollar a year military budget, which we fecklessly believed defended our thriving economy from authoritarian regimes, has proven to be insufficient. We must spend more, much more, on defense. Your article is a clarion call to redirect our financial priorities to the expenditures that will create a truly exceptional society.
It's me (West)
@Enobarbus37 Or maybe just spend more effectively?
Chris Lawrence (Ottawa)
A strong case could be made that the last few decades of relative peace has allowed the Global Economy to become far too dependent intricate supply chains managed by corporations that have no allegiance to any country. This has allowed multi-national corporations to avoid any ethical scrutiny, hide their tax revenue, and exploit the populations in underdeveloped countries. They were able to do so because they have have very little incentive to other than a lower tax rate (thanks Ireland)! Will Russia's unjust invasion of the Ukraine negative affect the global economy, of course it will... but perhaps ruthless unregulated capitalism wasn't the best way forward to begin with. For example, perhaps the EU should never have become dependent on oil from a country run by an autocrat who's invaded its neighbor in the last decade.
Dan (Boston)
I remember when automotive wiring harnesses were made in the US. In my family’s factory in Detroit. Then economic geniuses like Krugman pushed globalization despite the obvious risks we’re seeing today.
F III (Richardson Tx)
@Dan The government did not dictate where parts were made, they opened access to other providers. Purchasing cheaper parts was a business decision.
Dan (Boston)
@F III Did I mention the government in my comment?
Betsy S (Upstate NY)
I sometimes think about how huge the Chinese market is. More than a billion people. Now that so many of them are prosperous enough to consume, that's formidable. We in the US like to think of ourselves as in control of the world economy, but that's not the case. When we made the collective decision to rely on "free markets" to drive the world economy, it drove manufacturing to places where labor was cheap and regulations were weak. The idea that government should "plan" the economy was discredited by the fall of the USSR. And we went overboard rejecting planning. It sounds as if that "wisdom" is being reconsidered.
David Horn (Moneta Virginia)
I hate to admit to schadenfreude, but I argued against hyper-optimistic supply chain dependence during my working life, and here it is to haunt me. This isn't the first time industry has "optimized production to improve profits". Actually, the first time coincided with the first globalization movement. All the fallacies came to a head: body-breaking time management, reduced inventories and unreliable trade partners. Now it's back. We humans are not very good at learning from the failings of others, so I doubt this will be the last time for this debacle or one too similar to it. Perhaps, when the machines are running everything, it will be different, said the optimist.
MPS (Philadelphia)
This is yet another reason why all corporations should be required to pay some level of federal taxes. They use our rule of law to protect their interests yet they spend large sums of money to avoid taxation. These corporations also rely on our federally funded infrastructure to maintain their supply lines and move their products. They have no excuse to avoid taxes. This avoidance and the support of politicians who allow it to happen should be portrayed as unpatriotic. In these dire times we can not afford to allow these behaviors to continue.
rich (hutchinson isl. fl)
@MPS And that is to say nothing about the intentional division that corporation connected political operatives sow in order to keep the populace divided by social issues. What would the corporate tax rate be if there were fewer social issue wars occurring?
vandorlo (nj)
@MPS Let us not forget the mega wealthy who also have a large, not necessarily obvious, impact on both business & politics. As our nation has become less open on where money & influence reside, the rest of the nation has become more poor and uninformed. A true travesty for our future!
Philboyd (Washington, DC)
"It’s not entirely clear how sharply Russia’s exports of oil and natural gas have already been reduced — Europe has been reluctant to impose sanctions on imports of products on which, fecklessly, it allowed itself to become dependent." I love that quote because it is EXACTLY what the climate change fanatics, and the feckless Biden administration, are doing to the United States in attacking every aspect of oil and gas production, from pipelines to fracking. Now we see what happens: There is a crisis, the administration throws open the US oil reserves, but we and Europe are still vulnerable to shortages -- despite the US having energy independence as recently as the previous administration. By the way, this writer never pointed out the dangers of becoming energy dependent in this unstable world when it would have required an unfashionable challenge to the Biden climate change policies. Rather late to be doing it now.
andrea (Houston)
@Philboyd The US energy independence is not really threatened at the moment, other than in the news world controlled by oil companies... and perhaps it is time to stop whinging about the changes due to Biden... he has only been there one year, and the effects of his political statements have not really been seen...
Edward Reynolds (New York City)
Kudos, as usual, to the writer! Merely by reifying this absolutely pervasive and complex issue allows one to begin to think about it in a realistic way. Of course, it begs certain questions such as why presumably reasonable CEOs (Cook, Musk, etc) would invest in an environment whose governance has historically been subject to fits of "irrationality" but Marco Polo may have seen the same possible upside: a huge market?!
Sunshine (CT)
Putin will not kill it but it will certainly change. The days of getting cheapo natural resources from Russia's oligarchs and iPhones from Chinese factories forcing workers to 100 hour shifts might be numbered.
someone in NJ (Central NJ)
After three decades elite promoting globalization, saying it would benefit from trade and promote global peace while conveniently ignoring the horrible consequences of de-industrialized America, which directly caused electing Trump last time. Now elites say de-globalization because of pandemic, Putin invading Ukraine and China threat. How can ordinary citizens trust the elites do the right thing? As a arm chair economic observer, I noticed the chronic trade imbalance in US in turn has helped US government deficit because there is no pressure to reduce spending. How long does empire last under such settings?
Bob In Florida (Us)
Define Globalization. Mega corporations expanding their influence. Industrial colonization is the process colonization without the need to occupy a country. But with the same effect. When one country is picked clean, there are other poor countries to be take advantage of. But, there is not always a bad outcome as long as the manufacturing process is monitored and environmental issues addressed.
MJM (Scottsdale AZ)
The wide scale of manufacturing in China and elsewhere will not be coming back to the US or any other high wage country. I make soft goods prototypes and when they are ready for manufacturing I cannot make them myself, I have to use a factory and those factories are principally located in China. In addition, every machine I have bought for my work is made in China, every needle, and most of the notions I buy are made there as well. None of that production is coming back here or Europe.
Sam (Columbus, Ohio)
@MJM Thanks for a comment from a person who operates a business in the real world. And your observations apply to more than soft goods. While the US currently has sufficient fossil fuel primary energy to meet its energy needs (including the production of electricity), it and other developed nations are dependent on China or China-controlled resources for many of the inputs required to produce and operate electric vehicles, batteries, wind turbine generators, solar panels, electricity transformers and other equipment required to transition to electricity (the electrification thing). The US has about 1.5 million tons of rare earth metal reserves while China has 44 million (Russia weighs in at 12 million). The US has about .35% of the World's Nickel reserves; Cuba has more Cobalt reserves than the US (Nickel and cobalt are used to make batteries). Even if the US had enough rare earth metal reserves (as POTUS seemed to wrongly imply yesterday), it takes time and massive amounts of skilled labor, capital and energy to mine, process and transport rare earth metals. It also takes confidence from financial markets that the policy that is popular today will not be reversed tomorrow (a condition not unique to authoritarian governance systems).
slowaneasy (anywhere)
Democracy depends on the will of the people. Predatory capitalism depends on the greed of a few to buy the politicians who will subvert the democratic process with the help of predatory media moguls (Murdoch) who see fox noise as a path to wealth. Free speech in this case equals capitalistic oligarchs. Interesting dilemma for an advancing society - enter the corrupt republican party (the dems need to be watched closely as well in this regard). The framers never thought the money would equal speech (yell as loud as you want from a field in your 120 acre farm). Democracy - such an interesting experiment.
Theresa (Fl)
I hope there is something between and isolationist deglobalization and the giddy embrace of globalization that we've seen since Clinton. Alas, America might not have the power to make the world safer. What we can do is foster energy independence, make certain crucial supplies, technology and medicines at home and keep the minions of autocratic governments out of our scientific and educational establishments. I'm all for free trade, but we can't have fantasies about our trading partners.
Ed (Oklahoma City)
How about a "Freedom Trade Movement" that promotes trade between countries with free elections and Democratic governments? We have built China into a massive economy by buying far too many of their goods because they are cheap, and Russia makes a lot of income from oil and gas that is desperately needed by Europeans. Other countries can fill those shoes, and I'm betting they are willing to play the Democracy game if it means prosperity for their people. It's all too obvious that there will always be despots (Trump included), but we can chart a new course with our trade, along with the exchanges that promote education, the arts and science, as examples, by promoting Democracy as a "good for business" way of life.
Brian (Audubon nj)
But is it “rule of law” or our colonialist advantage. Are they fleeing an unpredictable autocrat or a regime that is demanding a 1.5 billion person equitable representation in the world economy? There is a turning of the table feeling to this war that is not being addressed in these pages.
MKR (Philadelphia)
Every aspect of "the course of human events" has its ups and downs, its actions and reactions, including "globalization." Which is as old as civilization if not older. How did wheat end up in China or maize in Peru?
PC (Aurora, CO.)
“…what Putin has taught us is that countries run by strongmen who surround themselves with yes-men aren’t reliable business partners.” We are entering the “Age of the Autocrat,” where inept and bumbling world shattering decisions are made by outsized and fragile egos. This, coupled with unemployment or underemployment sets up a situation of constant global warfare. I read with interest Putin’s inept military command structure in Ukraine, top-down, rigid, out of touch. I see Donald Trump furiously taking notes from Mar-a-Lago. I also see Syria sending troops to bolster Russia’s efforts. Far-Right Conservatives are salivating because they love a strongman, a hero. Bolsonaro in Brazil, Kim in North Korea, Xi in China, Assad in Syria, Lukashenko in Belarus, Orban in Hungary. The list goes on and on. The world it seems is vacillating from rampant globalization to rampant globalization disruption. All of you who cherish democracy, consensus, and who acknowledge the rights of others, I hope you’re taking notes. General Milley and Defense Secretary Austin, I hope you’re taking notes also. Autocrats will tear the world asunder. Lord help us if Trump returns.
DonB (Massachusetts)
@PC Trump has often proclaimed himself as a Putin wannabe, and clearly admires Kim Jong-un's absolute control of his country. Trump wanted to use the U.S. Military to put down peaceful protests against racial hatred within members of many U.S. police forces. But, perhaps worse, is the greed of the vast majority of the 750 or so billionaires who finance the Republican Party demanding tax cuts at all levels of government at the expense of the middle class in terms of their ability to educate their children, get health care without facing bankruptcy, and have a decent infrastructure of roads, efficient utilities supplying electric power without an overriding dependence on fossil fuels, and also an industrial and agricultural sectors that don't pollute the environment weakening affected people's health. That is just for starting the list.
Judith MacLaury (Lawrenceville, NJ)
Since this safety depends on democracy, wouldn’t you expect much more effort to build a more stable democracy here in America? Why do we continue to neglect our democracy? Why don’t most people even recognize how it is falling apart and what this may portend?
Don (Pennsylvania)
I have, quite unknowingly, reaped the benefits of globalization. My Japanese-brand auto was built in Mexico. Almost all the shirts and pants in the closet were sewn in South/Southeast Asia. And, until this moment, I never paused to consider what it means. Yes, the garment factories in the Carolinas are no more and the steel industry has left Pittsburgh long ago. I rely too heavily on electronic devices made in China, Taiwan, etc. I try to simplify my life but it is bound up on a web of dependencies that span the globe.
Brian (Audubon nj)
@Don What do you get from the US?
Ivan (Memphis, TN)
Both Covid and the invasion of Ukraine got a lot of companies and countries to look at how stable their supply lines are. However, in the current stage of predatory capitalism, the only concern is next quarter profit. I doubt there will be much long-term effects on business plans. However, countries may make rules that could change the business calculations. There could be rules demanding importers must warehouse inventories of at least a 6 month supply for any "essential" product. It could even be predicated on whether imports are coming from "stable democracies".
Ed Callahan (Whitestown IN)
@Ivan The GOP will never allow that because Freedom!!!
Mike S (NY)
Dr. Krugman, American management has absolutely no problem building factories in authoritarian countries as long as the daily wage for a worker is $17 (like at the Apple manufacturing facility in China). You will not see many or any American mannufacturing plants returning here as long as there is cheap, slave labor overseas. That would cut into American management bonuses. For forty years American management has prioritized their bonuses over reliable supply chains, quality manufacturing, American workers, and America. The prioritizaton of management bonuses was a bipartisan effort in Congress since, some of the money was funneled to pay off our legislators. So, don't worry. Globalization is here to stay. Management in American corporations will, in no way, put their bonuses at risk.
How Much Is Enough? (Northeast)
John (NYS)
Legitimate advantages of globalization are economy of scale and access to minerals and food from other regions. On the down it can mean supporting governments that do not have the conscent of the governed through elections or otherwise do things contrary to our values. Lastly, globalism, has been a huge hit to our unskilled. My father was a bright guy with a a high school education and military service. Fifty years ago he was able to nicely support our family with a manufacturing job on his incoming alone. Those job have been evaporating. To tolerate globalisms hit on the unskilled, perhaps the US should expand the earned income tax credit such that low end hourly wages would be significantly higher through a tax credit. High enough that what U. S. companies can pay manufacturing and be competitive would be boosted to a level where those workers could support a family.
How Much Is Enough? (Northeast)
Skilled too. How many American tech workers and hospital workers are American? Much less pay too.
How Much Is Enough? (Northeast)
Globalization allowed me to buy cheap disposable products, with the exception of my iPhone and computers. The consequence was the rapid decline of my IT business due to the saturation of global talent offshore but the we greatest impact was Indian labor on our shore (H1B Visa). Now my small team is learning 24x7 to keep pace in a rapidly changing gig market. In firm, Americans were forced to train lower pay workers then forced to leave. Anyone over 50 mostly failed to get work regardless of skills. I’d rather have a stable American firm with happy American employees and pay more for products. Between ageism and the soaring cost of healthcare the gig economy makes me feel I need to escape to a country with better opportunities.
Smilodon7 (Missouri)
Yeah if you are over 50 it’s the gig job or be unemployed. I can’t even get anything far beneath my skills.
GLC (BCS, Texas)
Thank you Dr. Krugman. "To make the world durably richer, we need to make it safer." With all due respect, it is recommended that the last statement in the article be modified as below.... To make the world durably richer, we MUST make it safer. Thanks again.
Armageddon (Florida)
Interesting column, Mr. Krugman: As an old, white retired female who has lived in the US for more than 75 years; I am not technically a baby boomer, but am a war baby and I have lived in the best of times I think. I have known nothing but prosperity, not by being born into wealth or inherited wealth but by hard work for all of my adult life and luck. The pandemic threw me for a loop and now Russia turning every thing upside down. We all need to put our thinking caps on and remember that we rely on other countries, and when times are good, it works. Now that times are bad, it is not so good. Not quite out of the pandemic, and the Ukrainians being slaughtered minute by minute, I think we all need to step back and think. It probably will not be what it used to be and there are tough days ahead of us. High gas and food prices are at the top, but other concerns like the climate and now threats of a famine, we need to wake up. I won't even mention the political situation in this country. Will we? Probably not.
mark (lands end)
@Armageddon As an old retired male postwar boomer I have followed a path similar to yours and can relate to what you express here. I share your pessimism about our ability to 'wake up' in time to face the challenges of this daunting new era. I would add only one thought. As a parent of millennials I'm surrounded at this point by a new generation just coming into adulthood and marvel at how easily they cope with this hyper-connected new world and do believe the opportunity to achieve some kind of global consciousness and consensus is possible now as it never has been before. I pray that their youthful hopes for the future and idealism might still help us evolve fast enough to come together around the world in time to take action and make progress in time to save ourselves.
Armageddon (Florida)
@mark I appreciate your reply and hope that the upcoming youth will tackle and solve these problems since that has always been the case. Since you are a boomer and had parents who went through the great depression, the pandemic of 1918, Pearl Harbor, The Cuban Missile crisis and tons of other problems, I hope the youth of today succeed because we did. However, while I think idealism is important I do wonder if this world has gone beyond the point where we can solve everything. A lot of these youthful people have had helicopter parents, don't care much about the rest of the world, and probably don't think we are dependent upon each other. Young people don't value military service for the most part and have taken education short cuts. (Cheating is an accepted norm.) When I see these young people in Congress acting the way they do, that doesn't give me much hope. Also, the mature ones seem to be on the batty side as well. Was it from, the movie South Pacific where the song sung was "I'm just a cockeyed optimist" I think we need to be doing more thinking of our education system and the people we elect to Congress. Sometimes things don't turn out just right no matter what. Last comment: Did any one know that the end of March was the Vietnam Veterans Remembrance day?
Hari Prasad (Washington, D.C.)
Very true, Mr. Krugman. And once Putin has been put in his place - out of power - let us hope the world can get back to being safer. With luck, Xi's hold on power will not last long, as the Chinese see the consequences of untrammeled autocracy elsewhere and in their own country.
Paul (Rio de Janeiro)
"Europe has been reluctant to impose sanctions on imports of products on which, fecklessly, it allowed itself to become dependent." I thought this was an article warning about the dangers of de-globalization, not calling for it. According to Krugman's comment above, business should not be done at significant levels with countries and regimes such as Russia's. This would basically mean that much of the world would have to somehow become independent not only of Russia, but of China, much of Africa, all of the Middle East and Central Asia. I am not arguing this would be necessarily bad, but it would certainly run counter to what I understand Krugman's point to be.
Mike (New York, NY)
Love how Krugman refuses to even consider how wrong he is on inflation. He admits here that deglobalization will cause inflation, but in other articles claims inflation will go down on its own as supply chains reset. Which is it Dr. Krugman?
ASPruyn (California - Somewhere left of Center)
@Mike - While de-globalization from autocratic regimes will cause some inflation, due to increased costs, it would build a more secure supply chain amongst those countries that can work together because their politics do not depend on the whims of one person (or a small group of people). That, in itself, will, in the future, protect those free markets from a number of systematic shocks, such as has resulted from the invasion of Ukraine (or Covid). Protected from those shocks, we would see the lower chance of inflation. One of the more pernicious business practices affected by the pandemic (and Putin) was “just in time” resource control. It only works if everything works out ok. But, if sand is thrown into the gears like Covid or Putin has done, the “just in time” system breaks down, causing lower supply without lower demand, and that causes costs to rise (a.k.a. inflation). This is a somewhat simplistic overview, but the basics of it are what, I believe, Professor Krugman is talking about.
Ed Callahan (Whitestown IN)
@Mike It’s sad you think you’re clever. The correct answer to your question is both. Deglobalization is one of many factors pushing inflation up, while resets of supply chains will push it down. And like the million million other factors that determines what goes on at any given second it’s all happening at the same time. It is complicated. You, on the other hand, believe in slogans which magically determine the nature of the world. You might try thinking.
Kevin (New York, NY)
I used to be a vocal advocate for universal globalization. No more. I used to think globalization would promote economic efficiencies, spread democracy and human rights, and enshrine peace. I was so wrong. It has permitted large corporations to evade important environmental, safety and labor regulations, it has decimated our working class with disastrous effects at home (the turn to populism, opioid epidemic, etc.), funded regimes intent on abusing human rights, and made democratic countries dependent on authoritarian regimes for essential goods and service. What a mistake. Trade with allied nations that respect human rights and the rule of law, and implement regulatory standards and environmental protections equal to or better than the US makes sense. But as for the era of universal globalization, which has fueled the growth of the Chinese and Russian military-dictatorship regimes, I say: goodbye and good riddance.
Ed Callahan (Whitestown IN)
@Kevin We could have had a lot of that, at least, but only if we all tried. Too many of us just let things coast.
John (Arlington Va)
It is true that the Ukraine war may precipitate a retreat from globalization, but more important are the internal flaws of excessive concentration of wealth and income and capitalism excesses that Keynes highlighted in his work. Within China these forces are at play as well in a capitalist country led by a so-called communist party. Longer term rising prices of petroleum with carbon taxes is going to mean that shipping inputs and products from the other side of the world is going to have to stop. Climate change will mean produce and consume locally as much as possible and products with high levels of carbon inputs will be so expensive that few will be bought.
Tonka Trucks (Tonka Bay, MN)
There were those who predicted this move toward globalization was more about breaking labor unions and reducing labor costs than anything else. We're seeing now the direct consequences of moving supply chains outside safe borders, arguments that were made during the Reagan Administration before the Canadian Free Trade Agreement, NAFTA and the rise of China. What's surprising from all this is the election of someone like Donald Trump and the current popularity of white nationalism, political phenomena also of direct consequence and vastly more dangerous in that it could destroy this country from within.
Herve (Montreal)
Is the "deglobalization" another factor feeding high inflation for much longer then?
cjh (Massachusetts)
If we were honest with ourselves we'd admit that 90% of globalization is simply exploitation. Yes, some countries have natural resources that others don't, but generally speaking, countries with poorer populations (most notably China) are able to manufacture goods cheaply because they pay wages that Americans would never accept. These workers often endure factory environments that would be illegal in the USA, and the companies that employ them use practices that are often dangerous and toxic to the environment. Cheap goods are nice, and if you live in a 3000+ square foot house, they may even seem essential. Good riddance to globalization. It's distorted out sense of value, put millions out of work, driven social inequity and political discord, and wreaked havoc on the natural world. It won't be an easy transition, but in the long run, mankind will be happier and healthier without it.
Old Democrat (Asheville No)
Cahill, End of globalization? I think not. Capital investment and jobs will always find the cheapest option, which will still be in poorer, more exploitable countries. A slowdown and some retrenchment yes, but the end. That’s what capitalism does, not going to open chip foundries ,Apple contractors or textile plants in Brooklyn NY, and not in Texas either.
Stan Sutton (Westchester, NY)
@cjh I think you're squinting at the big picture the wrong way. You're ducking a lot of issues and ignoring a lot of facts. For instance, even if the U. S. were somehow able to drastically reduce its reliance on global trade, that won't solve problems of inequality, the environment, or political discord within this country, and I don't see how deglobalization is going to do anything for those problems on the world stage, either. To give us another point of reference, what's your best example of an era prior to globalization in which the problems of the world were substantially less than they are now? Please note, I'm not arguing in favor of globalization, I'm arguing against doing things that aren't going to fix the problems that we may associate with globalization.
Steve (St. Paul)
@Stan Sutton Agreed. There is more than enough to go around. It's the distribution schemes that are faulty ( how many Haitians could live on a 500 foot yacht?). And BTW, if globalization has done nothing else, it has enormously grown the economic pie from which we all eat.
Marcus Brant (Canada)
Russia and China are both guilty of rampant hubris. Their shared delusion is one of immense power where the real power is held, for better or worse, by the West. The R/C axis further suffers where ambition cannot match ability, as Russia painfully learns in Ukraine. This friendship will eventually founder when Russia realises it is a microcosmic economy in macroeconomic world, especially when compared to China, and China to the rest of the world. In any axis, Russia will always be the meeker partner, something that Putin won’t like very much. But, for now, the enemy of my enemy, and all that. It’s probably a mistake to say Russia, China, or the West. It’s likely more accurate to say Putin, Xi, or Biden because national policies are more reflections of singular personalities than agreed approaches as a result of defined agendas decided by governments of the people. Putin is a particular example of this, apparently cocooned in lies designed to deceive even his own population, China second, America as a closing third with its current and persistent fascist inflection. The rest of the world assumes its place in this identity parade. This era is subject to human mortality; all these characters will die and possibly things will change then if not through regime change in the shorter term. What is clear is that every national dream is rooted in the commodity of power where money is a natural biproduct filling personal accounts. Essentially, global corruption has caught up to us.
russ (nj)
@Marcus Brant Or, could it have started with us?
oscar jr (sandown nh)
All that you wrote is true. The flight of capitol from China though started before the war but definitely accelerated after it started. Congress passed legislation to help companies relocate back to US when it was evident that a chip shortage greatly hurt our national interest. So it is advantages for the West to ensure that we have the resources in house to supply ourselves. The problem with that is that the elite investors will not like the pay cut
Auntie Mame (NYC)
@oscar jr A problem because... just remember who owns Congress and the President. The Democrats have not yet passed the drug price bill -- but have showered two trillion on unknown projects to be undertaken by the states- aka cronyism -- friends of the politician.. We have a hole in the sidewalk in front of a privately managed!! why? city-owned bldg. which is not fixed despite our City Council person's office informed. Two bagsof asphalt would level it -- illegal to do as a private citizen BTW... Meantime a project to replace-- at great expense sidewalks by schools whether or not they need this. And in NYC the homeless problem often a mental health problem resulting in what is more reported street crime. My only point is the incredible misuse of money which seems to bother no one.
johnmark (VA outside the beltway)
Something else was similar to the turn of the 20th century. Monopolies were flourishing. With them business gains efficiency which lowers the available supply. At first this can lower consumer prices or increase return to shareholders but in times of disruption the optimization of production of a monopoly are more of a threat to collapse than a diverse set of competitors. This is a somewhat hidden aspect of the response to demand changes due to the pandemic (from services to goods). We saw some of this early on when food producers couldn't pivot from supplying restaurants to consumers quickly enough. And now bankers have created a cabal of oil companies resisting the urge to increase production because of fear of over production and price drops. We must get back to diverse production to provide our economy some measure of immunization against shocks.
paul zakhar (Green Bay)
Interesting piece, Paul. I enjoyed it. Nice take on globalization.
Sentinel (Abe’s Land)
Globalization allowed world population, previously checked by local resource constraints on local populations, to rise greatly above what can be sustained without it. Great countries that brought globalization to the rest of the world will not be exempt within their own borders from the great fall. The illusion that the industrialization of agriculture with the green revolution could feed such huge numbers on a sustained basis was always suspect. Now US agriculture faces its own supply chain problems with shortages and huge price increases on herbicides and fertilizers. While the industry and short sighted politicians promote increasing the production of corn ethanol and mandating consumers burning more in their gas/corn guzzling vehicles which will increase the prices of grains and reduce the land available for growing real food. While it wastes great amounts of feed stock in the inefficient conversion of plant to animal protein. While in the face of climate change and droughts, it continues to deplete the nearly depleted Ogallala aquifer. The US ain't whistling past Malthus' tomb anymore. We ain't exempt from the limits to growth despite all capital, science and technology we threw into meeting its imperative, always a highly suspect and potentially catastrophic mission on a planet bounded by finite limits. But ... we without such growth we might preempt the birth of another Elon to save us, the cornucopians reasoned. While Elon is on a race out of here.
william king (Toronto Ontario)
@Sentinel I agree with a lot of what you say but I'm not worried about any long-term shortages of "real food". Humans have always prevailed by adopting new and often wholly unexpected foods. The red meat era (with the meats themselves being produced by animals feeding on grains and food oils in feedlots and living sad lives totally different from their grazing ancestors) is rapidly coming to an end--and its end will likely have health and ecological advantages for all of us. I'm not sure what will replace it but something will for sure.
Marcus Brant (Canada)
I’ve always regarded globalisation as a form of international fascism. Western countries, in particular, have shed manufacturing sectors to the benefit of white factory owners and detriment of darker hued workers while stripping away good paying and secure positions from domestic labour markets. Some might call this sound business practise, maximising one’s profits. Others, like myself, consider it a betrayal of the working class to the advantage of elites. There is nothing erudite in greed and the polarisation of national or even international economies when allied countries are doing the same thing at the same time. However, the process really breaks down when Machiavelli’s ghost reappears and these elites wage war on each other. It appears that Russian tank factories have had to close down because their weapons contain parts sourced and sanctioned by the West. Even the nuclear arsenal is vulnerable because of Swedish made components. British military uniforms are made in China. The list goes on. The military industrial complex is a victim of globalisation which is clearly excellent news for us peaceniks. Trading with the enemy was officially outlawed in 1914, but then one has to define what is an enemy. Buying fossil fuels from a nation we otherwise kill with supplied weapons might seem absurd, but that’s globalisation. It can only really work when elites genuinely love each other, but love ain’t in their DNA.
Rick (Cedar Hill, TX)
@Marcus Brant true the elite want to make huge money but don't forget the average shopper that wants things cheap cheap cheap so they can buy as much 'stuff' as possible. It's a problem that is owned by all.
Marcus Brant (Canada)
@rick The reason why the shopper wants cheap cheap is because they don’t make enough money because their job went to a warmer but poorer country. Consumerism is a problem because very few can afford not to consume. Cheap goods made abroad are finite goods which need to be replaced frequently, thus driving the cycle.
russ (nj)
@Marcus Brant That, along with the "need" to drive fuel guzzling huge 4 wheel drive "livingwombs" 3 blocks to drop of Sally to kindergarten while looking down at a 25-30 thousand dollar watch to see if they make it on time.
ChristineMcM (Massachusetts)
"Bringing production back to nations that believe in the rule of law may raise your costs by a few percent, but the price may be worth it for the stability it buys." This whole era, including the shock of a Russian invasion that just popped up out of nowhere except in Putin's brain, has a very, very retro feel to it. Sure, we have all our high-tech toys and global communications--which leave us and everyone to cyberwar--but the uncertainty and fears of spreading war are ever-present. More and more recession looks likely, here and abroad, or so say the "experts". Of course, we know what comes after retrenchment should war engulf more of Europe or Putin grow so desperate he attacks a NATO country. It's pretty hard to plan during rising uncertainty.
Heather Inglis (Hamilton, Ontario)
@ChristineMcM I agree. Adding: the one place where I would recommend pulling back is the micro chip manufacturing in Taiwan which supplies the majority of the world's advanced chips. I hope some government encourages Taiwan's chip manufacturers to move to a safer location for everyone's sake.
ChristineMcM (Massachusetts)
@Heather Inglis: great point. It's not as if Putin's war isn't serving as a loud warning about how critical supply chain locations can bolix entire industries.
I have become skeptical of your analyses since you repeatedly argued in these columns that current inflation was likely transitory.
Steve-O (Houston)
I would say "bring the manufacturing jobs back to America" and buy things that are "made in America", but since Ronald Reagan killed labor unions and sent the middle class on a downward spiral we still see today, it seems that is now impossible. One of many myopic things our 40th President did that we are still paying for today, and will continue to pay for in the decades to come.
Fred (Up North)
An interesting essay that raises, at least for me, a number of questions. Did increasing globalization lead to increased legal immigration to the US? Much of our vibrant tech industry has been thanks to immigrants. I and many others would like to see a return of basic industries to this country. Are our educational systems up to the challenge of training the new American workers? Does deglobalization, the returning of production to home, make for a less stable world? Is that return is at the expense of least wealthy nations? Do they once again become mere colonies to the wealthy nations? Complex problems, no simple answers.
KenC (NJ)
Covid, Putin and Xie Jinping's decision to emphasize military power abroad and social control at home to protect the CCP have very likely doomed globalization and for the vast majority of Americans that's good news. Globalization benefitted a tiny minority of well connected financiers but - after 50 years - can be seen as an economic, political and social disaster for almost all Americans. Yes Americans like to buy lots of stuff at cheap prices but they are far more interested in being employed at a living wage. From a national security perspective, the Allies won WWII largely because America had the industrial capacity to build many more planes and tanks and ships than the Axis while also arming Russia and to some degree the UK. Today - as Dr. Krugman points out - even fundamental items like wiring harnesses aren't made in the US. From a race relations perspective, America made great progress in the expansive and widely shard prosperity of the 1960's and early 70's but has mostly stalled out since. It's far easier for people to trust and be open minded when their economic condition is generally good; in an unregulated capitalist system as the US has become, tribalism and distrust dominate economic and social relationships. Politically, the decline of democracy in the US - and around the world for that matter - correlates very well with the rise of globalization and unregulated capitalism If the system doesn't work for you or your family why support it?
Dull Roots (MI)
The pre-WW-1 international trade was highly unequal. Colonial powers like Britain suppressed local production and forced dependence on British exports. For example, even basic goods like textile sector were stymied in India. Since the global trade was in currency of colonial power, the imports from colonial nations were much cheaper for them. This encouraged trade, exploration of minerals and even wage labourers. When this unequal and unjust order collapsed, so did the international economic linkages built upon it.
@Dull Roots If you read the articles of Marx and Engels, journalists covering politics in London to the German press before the US Civil War, the question of the cotton from India was already up, because, as the blockade from the USA had stalled the British textile industry by depriving the British from their investments in the American plantations, they could not replace it with the cotton from India either, having humiliated that industry in their self interest of domination .
Ibn Battuta (At Large)
World population in 1914: 1.75 billion in 2022: 7.95 billion No analogy with 1914 is valid in light of this fact. The planet is groaning under our weight and the rate at which we are eating through its biota, minerals, oceans, land, and atmosphere. But not to worry. All this stress makes for many more wars, and opportunities galore for weapons makers. And that market is global three times over. We accept payment in dollars, denari, roubles, rials, euros, rupiahs, lire, kroner, shekels, pesos, and pazzazzas. So with all respect to the good Professor, I don't think globalization is coming to an end any time soon. Unless, of course, we nuke ourselves to the end of days. This is not, as another commenter said, a good year to have given up drinking.
A (Bangkok)
What Krugman doesn't seem to consider is the tremendous elasticity of the labor force in developing-country economies. I've watched how Thailand has adapted to the devastating loss of nearly 20% of its GDP (i.e., tourism) as a result of the Covid-19 pandemic. And, still, the Thais seem to be able to absorb more deprivation, without a drastic reduction in meeting their minimum essential needs. It has something to do with an arcane philosophy called "Sufficiency Economy."
tom (Wisconsin)
the need to keep vital industry close at hand is apparent. Our reliance on semiconductors is a problem we have known about for a really long time but have done very little. I don't see companies investing in russia for some time given the chance your investment could become nationalized. Same with other countries. Trade is wonderful just do not expose your own throat
Rich888 (Washington DC)
The Rube Goldberg machine of global supply chains was developed through a narrow lens of cost savings, ignoring the very real risks of higher transportation prices and geopolitical disruptions. In 1914 residents of the global manufacturing power of the UK could order goods from around the world. They were not shipping production overseas. Hence they could continue to grow in a disrupted world. The two big policy mistakes in the West have been the dependence of Europe on Russian energy and the dependence of the US and Europe on Chinese manufactured goods. Professor Krugman acknowledges the first but ignores the second as it is theories he has supported that have been used to justify the rise of illiberal China as a challenger to US hegemony. As a result you can't assume that the US economy will skate through the current crises.
Jonathan Penn (Ann Arbor, MI)
The trouble with this editorial, and the trouble with economics in general, is that it attempts to predict the future by finding the most similar case "scenario" from the past. One thing should be clear already in this Anthropocene Era with ever-accelerating climate change- the future will not be like the past. This unfortunately renders that work of Krugman et al. extremely unreliable. We have already seen how global supply chain were vulnerable to disruption from the pandemic. Now add in unpredictable and seemingly irrational autocrats and would be autocrats, democracies where one party opposes everything the other party suggests, rendering effective action nearly impossible, and the fog of innumerable wars. Not to mention Hundred Year storms that now occur every other year. Where this all winds up, who knows. But we can be certain that predictions by economists, indeed predictions by almost anyone, will be mostly wrong. Global supply chains will only be one victim among many.
Andrea (Italy)
There is one point in this article on which I do not agree: European interests on Ukraine and Russia do not match USA interests. EU countries are not interested in buying gas from USA and nobody here in Europe considers a good idea to completely isolate Russia. Most of the main stream opinions tend to describe Putin as a tyrann, but every day European leaders call and talk with mr. Putin.
It's me (West)
@Andrea How long for will they keep talking with this murderer? They look helpless and ridicolous. It only gets worse after each talk. They're being played. He only cares about his territorial objectives.
Bartokas (Lisbon)
The sooner Western Democracies wean themselves off from Russia and China, the better. Even if the West would have to pay a stiff price in the short to medium term. But it is the right and smart thing to do. Latin America and Africa's growing economies as well as domestic industries in US/Canada, Europe/UK, Australia/NZ/Japan/South Korea, can in time replace China and Russia in the supply of raw materials, intermediate and finished goods. More than a deglobalization process, the Free World needs a globalization refocusing process away from Russia and China, which are and will be for many years unreliable trade partners.
Erik (Ljubljana)
Britain kept growing after 1913 because they still had Empire of colonies under their economic command. What happened with Britain after WW2.. and no colonies is another matter.
Peter (CT)
There was nothing “feckless” about Europe becoming dependent on Russian oil. That was globalization, and the idea was that you do business with the rest of the world, which fosters peace and prosperity. The blame for this mess falls on Putin, not on his good neighbors.
It's me (West)
@Peter A bit of honest due diligence before dealing with those immoral dicators and the intention on the West would help.
CATango (Ventura)
Add to this the strategic need to recapture quite a bit of our own offshored capacity and you see the wisdom of this piece. Our own economy is highly dependent on sustained supply of all manner of goods and components from China that range from finished high end complex consumer goods, nondurables as well but also critical pharma components and equipment plus machinery and parts. The list is endless. Our leverage with China is economic as well. The longer we go on without an industrial plan to recapture at least key strategic capacity, the farther we will fall when China moves to retake Taiwan, and you can be assured it will. Taiwan was taken from them in 1895 by Japan at the end of the First Sino-Japanese War, not returned at the end of WWII, and is viewed as part of China to an even greater and frankly more justifiable extent than Ukraine and Russia. It is now abundantly clear that China is politically aligned with Russia and the autocracies, certainly not us and will battle us on that basis alone. I fear that our historical reliance on reaction instead of proaction, without our proclivity to juggle one ball at a time, is going to be our undoing.
Dull Roots (MI)
Localization of energy production due to green energy may be a factor in deglobalization. Globalisation as percentage of global GDP may come down due to this factor. So far, developing countries like Bangladesh, India have to compete with west for energy imports. Their energy demand typically grow higher with marginal rise in prosperity, this made their currency weaker. Localization of energy may help sustain higher growth rates and help spawn higher levels of local industrial production and larger service sectors.
Joe (Cambridge, UK)
Yes, Keynes taught us about depressions. But that's like saying Newton taught us about how baseballs move. Krugman here reinforces the idea that Keynes's main contribution was to explain economic crises. But this is to treat Keynes as the economist of the special case, rather than as having provided a general theory of markets. Despite the fact that Keynes argued that Say's Law only holds in special cases; that in general it does not hold; and that therefore neoclassical economics is the economic theory of the special case. Keynes's "General Theory" is not an explanation of economic crises and how to fix them, it is a general theory of how the macro-economy operates.
M Harvey (FL)
Let's bring the manufacturing jobs home once and for all. Let's attract qualified workers too for those jobs. That will enhance the wealth and greatness of the nation.
Dongiovanni (florida)
@M Harvey While most Americans agree with this, are they willing to pay the price at market for it in the short to medium term? Americans are howling at the current state of inflation as if it were the end of the World, whereas it is a result of increased demand after two years of COVID related shutdown and ramping up of production in the aftermath, as well as greedy oil/gas companies taking in obscene profits in the past year or so. The war in Ukraine is not helping, but its' impact is not yet fully reflected in the global economy.
Girish Kotwal (Louisville, KY)
Biden called Putin a "killer" in the beginning of his presidency and then called him a "war criminal" more recently. Putin can be labeled whatever Biden wants but his sanctions and those of western nations is what is killing the global economy that is not flexible enough in the short term or long term to adjust to the crippling sanctions on Russia when the world has been so much dependent on either Russian oil or Russian wheat. What is worse is the largest democracy in the world, India and a leading Islamic country, Pakistan are being bullied by the Biden-Harris administration to antagonize Russia by sanctioning it. Both want to remain neutral despite wanting an end to the war through talks and deescalation of the fun and games economic war. Sanctions and pandemic lock downs and business shut downs are double edged swords that can cause as much harm to the economies of the countries that impose them as much as those that endure them. Is it really worth damaging strategic relations and partnerships with India built over admins of 3 US presidents? Is it really worth for US bullying a democratically elected Imran Khan, prime minister of Pakistan and punishing him for meeting Putin on the first day of Russian invasion of Ukraine? Imran Khan could easily lose a vote of no confidence in Pakistan which he claims is a result of his standing up for Pakistan's neutral stand and trying to import Russian energy. Trying to force S. Asian countries and China to join sanctions is absurd.
It's me (West)
@Girish Kotwal I would not call India a democracy. Policemen with sticks, all based on bribes, kleptocracy. It's similar to Russia. And with Modi is slipping down even further. India's not neutral. Not condemning the invasion puts India on the wrong side of history. After all the money and benefits from outsourcing and offshoring where the West lost millions jobs to India, now India's developing hypersonic missiles with Russia. It's not a sincere friend of the West to use an euphemism, in my opinion. I hope there'll be a reversal and will bring back jobs asap.
Girish Kotwal (Louisville, KY)
@It's me West. You are so far west that you are falling into the Pacific ocean in criticizing India. If you have not been following the news, New Delhi has become the center of global diplomacy not NY and not DC. Just earlier today, high level officials from the USA and UK visited India on the same day that the Russian foreign minister Lavrov is visiting India. Just a couple of days ago the Chinese foreign minister visited India and so did the Japanese and Australian high level officials. Ask your self why? India's pro-peace neutrality of trying to be friends with everyone and enemies to none is even being praised by the prime minister of arch rival of India, Pakistan. Ukraine could have avoided Russian paranoia, invasion and bombardment if it had direct peace talks with Putin. After 35 days of horror, Zelenski wants to meet Putin mano to mano face to face. Ukraine did not have to endure such cruelty to its people to understand that a neutrality model similar to India's could have deterred violent Russian wrath. India has metered its response to position itself as a credible neutral mediator to achieve cease fire and comprehensive peace. The Indian foreign minister Jai Shankar has said that the European nations are only paying lip service to the US sanctions but in reality they have increased their supply of Russian oil by 15%. in a month since the invasion. So what right does US and UK have to pick on India's neutral stand and business as usual in interests of its people?
michjas (Phoenix)
World War I is a poor analogy. During that war, US GDP doubled, British GDP almost doubled and French GDP increased by 50%. That’s because countries at war fully mobilize their economies. That’s not what’s going on in Ukraine because that is a limited war. Krugman equates the effects of a limited war with that of a world war. Go to the back of the class.
Smilodon7 (Missouri)
Ukraine is a limited war-so far. I have no confidence it will stay that way
no kidding (Cambridge)
"To make the world durably richer, we need to make it safer." In order, the world's largest arms exporters are the United States, Russia and China. If you believe more weapons equals more safety then we're clearly leading to make the world safer. If you believe the opposite then we're not. A global economy that depends almost entirely on having good guys and bad guys, and weaponizing both sides to the max, inevitably needs military conflict now and again to sustain itself. As long as suffering, death and destruction happen to the other guy and not us we consider ourselves safe. Are we the hero or the goat?
Peter (CT)
A safe world, at this point, requires a certain amount of war in order to keep the soldiers busy and the economies humming. Peace is problematic. For example, the Great Age of Piracy was the result of peace breaking out, and people from the military not having any other skills with which to make a living. Afghanistan was good while it lasted, Ukraine is a little excessive (attacking white people in your own back yard is in poor taste,) but as a prelude to fighting an acceptable war over the Arctic, it may generate some good ideas. We are the GOAT - the Greatest Of All Time. Don’t forget that WW2 was won by Americans providing weapons to Russia.
abj slant (Akron)
Russia's war is being funded by fossil fuel to the tune of about $500m/day. This might be the wake up call the world needed to transition to renewable energy. I hate having to be part of the masses who have to live through this painful transition, but let it be me instead of my children or grandchildren. IOW, let's do this--sooner rather than later.
Distraught (California)
@abj slant Bravo! Yes, our children should not have to suffer this.
stewarjt (all up in there some where)
"Wealthy, advanced economies will end up only slightly poorer than they would have been otherwise;..." -P. Krugman Economies aren't rich or poor. It's the people within them and the income and wealth distribution of them that matter.
abj slant (Akron)
@stewarjt And we, the people, control that: in the voting booth.
Mary Foster (Isle of Wight)
I read a long list of mineral waters on a local soda fountain menu from the 1910s that included brands I knew like Perrier, Gerolsteiner, and San Pellegrino as well as numerous others. This was a relic in the historical display in Gail, a tiny unincorporated county seat in west Texas. Early 20th Century globalisation was quite pervasive and benefited people far from London.
Didi Fischer (Vienna, Europe)
Yes : ) "Bringing production back to nations that believe in the rule of law may raise your costs by a few percent, but the price may be worth it for the stability it buys."
Oh please (minneapolis, mn)
We consume so much unnecessary imported stuff, it would be a good thing for the planet if we could afford less. Case in point, the Wirecutter about the right clothes for gardening. At 73, I have managed to garden all my life in old tee shirts, shorts and tennis shoes, which I make last for years.
Barbarossa (Longuyland)
@Oh please Me too. Full of holes and wear spots, but plenty comfortable and I don't care how dirty they get!
Mike S. (Eugene, OR)
@Oh please I'm 73, and I put on the same support hose the other day that I was wearing during my internship in 1975. When I ask how old something I have might be, I take a guess and then add 8 years.
Glenn (New Jersey)
@Oh please I have five boys, and still wear dozens of their surviving sport teams' T- shirts and sweaters purchased over the years. My wife throws them away at her peril.
The Bird (Europe)
Putin´s acting will have an influnce on global economy for sure, but he can not kill it. Investing will change, material flows will change, production sights will change. But this offers also hugh potential for new inventions in products and services, can bring home production, prefers la more local and sustainable energy generation and perhaps also another less wasting life style. This will take some time, will have some obstacles like the currenty high cost of living, but it will happen. Next to, even in war times, there is always global trade ongoing, nobody can stop it completely.
Gowan McAvity (Bedford, NY)
Two big reasons to restrain globalization are feckless dictators and climate change. Free markets will not restrain malignant narcissism. The closer to home manufacturing and the production of raw material supplies can be the less reliance of on energy (petro) hungry transport. The majority of dictators are petro states and shipping causes a great percentage of carbon emissions. Are the benefits of plentiful and cheap consumer gods worth the costs? Shouldn’t governments be seeking to shorten supply chains and seek less profligate consumerism anyway? The keeping goods cheap with cheap overseas labor paradigm is not sustainable. Safety nets and self-sufficiency are called for. Corporate must care for its workers and build better at home. The potential massive loss of capital due to dictators changing their minds cannot be ignored anymore. A smarter mix of international trade and independent domestic local economies are needed to protect workers and national security alike.
Moritz (Vienna (Austria))
@Gowan McAvity Maritime shipping causes 3% of global carbon emissions. At the same time, maritime shipping counts for more than 90% of global transport of goods. Compared to all other modes of transport, transporting goods by sea/boat is hugely efficient (that's not saying that it couldn't be made even more environment friendly). And yes, it is so efficient that it even makes sense to ship stuff around the globe rather than building production lines that are local but less effficient. Of course the term "efficiency" is put into question if cheaper costs are, in fact, not the result of actual efficiencies but simply a function of the exploitation of workers by dictatorial regimes (aka slave labour).
Peter (CT)
@Gowan McAvity Run for office.
alan (MA)
The big box stores trained Americans that cheaper (Chinese made) is better. Let's go back to quality is better. I remember when Sears Roebuck was the World's leading retailer. They didn't have the cheapest products, they had products that gave value for the cost. A product that costs $10 (made in China) and lasts 3 years is not cheaper in the long run than a similar product that costs $20 (made domestically) but lasts for 10 years. We need to have the American consumer re-learn this simple principle.
sue john (seattle)
Not to mention the environmental impact of cheaply made, throw away goods that pile up in landfills. Better quality goods that last longer is a no brainer to me, but perhaps the manufacturering industry would think differently. I left behind a 30-year-old fridge when I moved six years ago. It worked perfectly. My new one is 6 years old and the plastic bins and icemaker have broken already. Cheap Chinese goods do not serve individuals or the environment well.
hawk (New England)
@alan that ship sailed years ago, 1998 Clinton pushed the WTO to grant China most favorable Nations status, they are still classified as a distressed nation. Look it up
David J (NJ)
@alan , there is some truth to what you say. For years I feared America held hostage by globalization. Not only hostage, but if a conflict broke out, nationalization. And here we are.
Bruce Maier (Shoreham, BY)
Gobalization has meant that solar panels are made in China. Putin is helping to accelerate the move to renewables, which will test this trade item. Will the world develop an alternative source for these?
Jack Sonville (Florida)
I often told my children, while they were growing up, that they should control what they could control in their lives, because so much of the world was beyond their ability to influence or change. "U.S. Business" has not followed this simple mantra. In the search for ever greater profits (and with a firm push from Wall Street), it has outsourced key elements of its production to third parties around the globe, to the point where many manufacturers in the U.S. are truly only assemblers. They have outsourced design, production and quality to other people thousands of miles away, and then rely on dockworkers, ships, trains and trucks to get what they need to them. They have created longer and longer supply chains, often single-sourced for certain components and assemblies, without truly understanding and appreciating the risk proposition of what they were doing. So over the past 30 years or so, U.S. Business eliminated jobs here, became overly reliant on third parties thousands of miles away, materially increased business risk by significantly lengthening and complicating their supply chains and, ultimately, lost a lot of control over the end products it sells. The overlooked financial value of control, and the related benefits of minimizing business risk, have never been more apparent.
Softsuit (Europe)
Trading Accords are disliked because it makes cutting costs harder. Our business models are not built for providing safe, healthy or environmentally friendly options. Cutting costs drives shareholder value. Consumers are only looked at as a revenue resource; the business model does not have the correct priorities because revenue is not directed towards positive outcomes for consumers. That’s why we have government folks, to control unmanaged capitalism. We will never have the utopian dream of Socialism, however the forces need to be recognized and addressed on a continuing basis. This current resource war in Ukraine appears to be a cannibalism of a country to generate revenue. Trading Accords are beneficial in reducing these travesties. We will get better or fail.
Jane Ember (Philly PA)
Decline in world trade = a little more time to stop destruction of the planet. Somehow everyone who thinks we're going to adapt to climate change is concerned we can't adapt to being unable to buy every trinket that comes from China. We'll manage.
Barbara (Montague MA)
Wouldn't it be nice if, instead of continuing to export what were good, unionized, manufacturing jobs to poor countries where the pay and regulations are both meager, the US rebuilt manufacturing capacity, especially for essential goods? This has been a problem for a long time, but was made more evident by global supply chain issues during the pandemic. Perhaps we need strong incentives to manufacture in the US, and even stronger disincentives to move manufacturing abroad?
hawk (New England)
@Barbara Perhaps we need a strong leader that pushes such an effort. Biden wants to increase the corporate tax rate back to the highest in the world, 28%. Wait, we did have a strong leader
Birdman (Texas)
@hawk Yes, so strong that he almost succeeded in his coup attempt.
Ralph Averill (New Preston, Ct)
"To make the world durably richer, we need to make it safer." And, to make the world durably safer, the wealth needs to be spread as wide and evenly as possible. I think one could describe this as the democratization of wealth. That can only follow the democratization of political power. In other words; there can be no elected-for-life strong man supporting and supported by an entrenched oligarchy. Sound familiar? And I don't mean Russia. We have work to do. "Durably richer" and "durably safer" should become Democratic talking points, along with "the democratization of wealth."
Misplaced Modifier (Collapse Under Late Stage Capitalism)
This should be top comment.
Brian Michael Coyle (Oakland, CA)
TPP was the high water mark, and it's opponents were across the political spectrum, Krugman to Trump. TPP reduced Malaysia's, Vietnam's, Singapore's, and others dependence on China & brought them closer the US. The TPP prohibited child & forced labor, protected collective bargaining. With sticks. It had patent protection that China has no interest in (as someone with many patents I can't do biz in China.) Krugman joined critics, writing patent laws would only benefit big corps. I'm not a corp. The TPP affected labor & regulatory standards. But Robert Reich rejected it because generic drugs would be harder to get. It protected foreign investors from forced tech transfer, forced capital transfer, denial of justice. Guess which country does this? TPP did not allow companies to sue for lost profits, but Jeffrey Sachs and Elizabeth Warren made out it did. The TPP was disliked by the US business community because they understood that environmental, health and safety regs in TPP made it harder to cut costs. TPP was used by reformers in China to justify reforms. Big companies and hard liners were happy when the US withdrew, as were Stiglitz & Nader. TPP was more important than any avowed pivot to Asia, actions speak louder. In the universe where globalization continues, improves living & working standards, and reduces China's influence, TPP was ratified. In our world the left and right in America killed it.
Nelson (Mass)
The fragmentation we are seeing (similar to what brought us the First World War) is a consequence of the loss of dynamism of capital expansion. Putin and Ukraine are sad symptoms of the revival of nationalism. Their counterparts here are already well known - the extreme right white supremacists a la January 6. Check the Ezra Klein interview with Lawrence Sumer to realize that the deplorable state of the economy preceded the contemporary awful political developments -just like the end of expansion of capital the 19th century preceded 1914. Putin did not create it. He and right wing nationalist movements everywhere are symptoms of extreme concentration of capital on one side and extreme poverty on the other. Ukraine and Russia despite their wheat production have decreased their GDP compared to 2015. Not to mention other peripheral and less developed countries.
Blaise Descartes (Seattle)
This is a good essay. Economic models for the future have limited usefulness because unlike the laws of physics, people can CHOOSE to disobey economic laws. Nobody can predict irrational acts like Putin's invasion of Ukraine. But it is interesting to contemplate what Putin's actions mean for the global economy. I hope for the best. What worries me is the previously unforeseen second-order effects of the war. For example, Ukraine and Russia provide 30% of the world's wheat and a large portion of the world's fertilizer. So if we don't reach a truce quickly, an unanticipated consequence may be famine in much of the third world. That might mean further instability in countries that have relied on Ukraine and Russia for food in the past. If China were to enter on the side of Russia that would make the global economy suffer an even larger hit. And here there is a problem that is in the back of some people's minds---the enormous $30 trillion debt of the US government. In an era of deglobalization, there might be attempts to overthrow the US dollar as the predominant means of international finance. A third problem is shortage of oil. If the war with Russia extends for a long period, it may raise oil prices, complicating the US efforts to fight inflation. I suspect it is hard to predict which of these consequences will actually happen, because they depend on future irrational choices made by the various world leaders. We need somebody smart in the White House.
Rob D (Zürich)
@Blaise Descartes Thank goodness there is. stable geniuses are a liability in times like these
Ben C. (Westchester NY)
Dr. Krugman's implication that China is likely to invade "someone" (I think he implies Taiwan, which is not recognized as a sovereign country by nearly all nations in the world, including the U.S.) is typical "America-centric" thinking that is not based on actual FACTS. Since WWII, how many wars have US fought? Countless. How many wars have China fought? One major war (Korea war -- The ONLY time American and Chinese troops directly faced each other and let's hope it NEVER happen agin), and three border skirmishes with its neighbors (India, the Soviet Union, and Vietnam) with short durations and small numbers of casualties. Which country is the aggressor in the world stage??? China has shown no intension of invading Taiwan, and has engaged with Taiwan peacefully for many years. China has repeatedly stated that it would seek to reunite with Taiwan PEACEFULLY in a distant future. It is the U.S. who is actively promoting separatists in Taiwan, knowing full well that if Taiwan declares independence, it would leave China with NO CHOICE but to launch a military attack, which would then allow U.S. to say: an authoritarian country is attacking a democratic "nation", wiping up Anti-China sentiment around the world, to isolate and weaken China. For people with geopolitical knowledge, it is so obvious that the U.S. government is currently playing this very dangerous "Taiwan Card". Let's stop this madness and preserve peace! Compete peacefully with China instead!
Brian Delroy (Adelaide)
@Ben C. I don’t think one can conclude, on the basis of a question mark inside a set of brackets, that PK implies that China is likely to invade Taiwan. Further, based on China’s recent belligerence towards Taiwan, it is surely reasonable not to ignore the possibility, despite your capitalised assurances of Xi’s peaceful intent.
Thomas Moore (Washington DC)
@Ben C. I would point out that we haven't "won" as I would define it any of the major shooting wars we've engaged in. This is not a criticism of the military except one could argue in Korea and Vietnam.
Not so clear (Seattle)
@Ben C. Your comment appears to have come directly from Chinese communist party propaganda. Taiwan is an independent country, and China constantly rails against it, threatening to destroy it, flying its military airplanes ride up to its border. Hopefully China won't be the next powerful dictatorship to attack the democracy next door, but all signs are that they will attack. Taiwan is not going to attack China, just like Ukraine was never going to attack Russia.
X Leg (France)
Dear Dr Krugman, When mentioning end of first wave of globalisation spanning from 1870 to beginning of WW1 , and fast development of transportation and industrialisation, let us not forget it does coincide with the age of cruel imperialism and of unbound capitalism. It has brought misery on a large part of the world population. it is well documented and worth noting. If there is a parallel to draw , could it be that our new wave of globalisation has also been access to poorer labour , and as those new workforces work in appalling conditions and sometimes under authoritarian regimes Could it be that we therefore contribute to the reinforcement of those regimes ? ( side effects having been a rise of unemployment and a weakening of workers bargaining power in western world or democratic countries and affecting development in some more democratic emerging countries ) So cheap, overexploited labour, low tariffs, and unrestricted polluting transportation seems a major factor in low inflation throughout the last 3 decades. Ps WW1 brought wealth to american farmers and accelerated their investments in new machines , and brought wealth to US industries ,it did not last so long after the end of the war…
Jane Ember (Philly PA)
"Durable wealth" demands the continuation of ignoring the cost of externals. By definition, it's an oxymoron.
Scott (Maui)
What's bad for the economy is good for the environment. It is unfortunate, but the reality is that our economy is very resource hungry and most of those resources are extracted at great cost to our planet. Either we trash our planet or we rethink our dependence upon a growth economy and figure how to be less resource hogs. So maybe slowing the whole economy down is not such a bad thing.
David (Henan)
I live in China and we have had and continue to have a very socially cohesive response to the virus. My students are very optimistic about the future, even as we are now forced to have our classes taught remotely due to virus restrictions. I hope they are right. I'm not sure I'm so sanguine.
N.G. Krishnan (Bangalore)
Erudite article yes! But in my layman opinion completely misses the crux of the economic issues, repeatedly roiling the globe, naturally making one to whether the issues Schumacher (Small is Beautiful, Economics as If People Mattered) is after all correct. Schumacher questioned the “shibboleth of economic growth as the central preoccupation of politics; he talked of resource constraints on economic development. Above all, he insisted again and again that human happiness would not be achieved through material wealth. He had a vision of human need that would strike a 21st-century reader as oddly puritanical”. But his point is still valid as the wellbeing debate today demonstrates; despite our increased wealth since the 70s, we are no happier, warned against exactly the issues we are now dealing with as levels of mental illness – depression, anxiety, panic attacks, and stress – rise and the World Health Organisation predicts that depression will be the second most common health problem in western developed nations in near future. Schumacher answer was "small is beautiful". Go back to the human scale: human needs and human relationships, and from that springs the ethical response of stewardship to the environment. Reading his prescriptions for our future, it is chilling to realise how “so many thinkers, politicians, academics have all signed up to a deadening pragmatic consensus and our thinking has been boxed into a dead end of technocratic managerialism”
Dutch (Seattle)
@N.G. Krishnan Thanks for your comments. I think back to my youth and the Old Police song "Spirits in the Material World" from the Early 1980's when we lived through crazy times!
Not so clear (Seattle)
@N.G. Krishnan we can't test ignore reality, we've had a deadly disease that killed a million Americans and many millions more worldwide. There has been a good reason to work from home, limit our exposure to other humans. It's painful for all of us of course. That is not a symptom of the modern world that we live in, is the outcome of the pandemic. You might recall the 1918 influenza also caused despair and for some people to separate each other and they fought and argued over a face masks. We're not so different than they were.
KunstStation (Cologne, Germany)
@N.G. Krishnan I admire your comment. But I kept wondering "Who is Schumacher?" Michael Schumacher? Please don't assume everyone knows who you're referring to; a full name would be nice. Nonetheless, thank you for the prompt. Even though I took two [elective] economics classes at university, I have absolutely no recollection of a man named Ernst F. Schumacher. But after googling the last name, the economist E.F. Schumacher was about the 6th hit. And a very interesting man, indeed. Again, thank you for the heads up.
Hobo (SFO)
May have something to do with the Second Law of Thermodynamics which states that the total entropy of a system either increases or remains constant in any spontaneous process; it never decreases. Peace and rule of law are low entropy states that require a constant input of energy for maintenance. To put it simply, nature prefers chaos and disorder. It’s surprising that economists and historians never invoke the second law of thermodynamics to explain the ebb and flow of civilization.
Wordsworth from Wadsworth (New Wye, Appalachia)
@Hobo Great comment. I have thought that too. However, relatively few economists and financiers have taken physics in college.
Sean (Texas)
A good reminder that so many of the economic outcomes we attribute to our country's laws and policies are driven by forces totally beyond our control.
Cal Page (Vermont)
Globalization will decrease over time. Political instability and the pandemic certainly play a hand. But you must also consider the role disruptive technologies play. In Ukraine, instead of importing bomb parts, are making them locally on 3-d printers. No globalization is needed. Electric vehicles are another disruptive technology. They have one-tenth the parts of an I.C.E. and therefore, have one-tenth the need for globalization. Solar energy is yet another disruptive technology. Why import oil from the far east when you can generate the same electricity on your roof-top? Further, you don't need a standing army to protect your fossil fuel sources. Lastly, changes in the labor force reduce the need for globalization. The 'great quit' has shown workers they don't have to be slaves to 'things'.
gary e. davis (Berkeley, CA)
I disagree that there are hints of de-globalization. Everything you mention about current events suggests a marginalization of the axis of autocracies relative to a concentration of the global economy into more sourcing among allied powers, resulting in a segmentation or de-homogenization of the global economy. But de-homogenization is not de-globalization. There still are “world markets” for “desperately poor” nations, just less sourcing from axis powers, more sourcing opportunity from opportunistic allied players. Indeed, “Bringing production back to nations that believe in the rule of law may raise your costs by a few percent, but the price may be worth it for the stability it buys." What Putin teaches is that autocracy is self-defeating. And the China model is showing its age, while the rest of the world makes global public health leadership work well for flexible nations—as well as allowing for export of reliable vaccines to poor nations, which the axis powers aren’t doing, as they struggle to keep their heads above water. The world of tightly coordinated cetnral banks, the WTO, IMF, U.N., World Bank, G-7, and Atlantic Alliance is nothing like the Gilded Age of European monarchies at each other’s ancestral throats (which was not really a “world” war at all).
PATRICK (Pennsylvania)
Dr. Krugman. You should delve into Senator Rick Scott's proposal to tax all Americans while he claims that only 50% do pay taxes. I suppose he forgot about how all Americans pay about 25% federal tariffs on most of the imported materials and products we all buy every week, or the 50 cents per gallon gas tax that was forgotten by Congress who funded infrastructure spending after all those gas taxes and tolls were hidden away while everything crumbled.
Les (Pacific NW)
“Bringing production back to nations that believe in the rule of law may raise your costs by a few percent, but the price may be worth it for the stability it buys.” So, which nation(s) would that be? The US has numerous challenges with the rule of law and consensus no longer exists on what the phrase even means (Example: Ginni Thomas’s e-mails. And she has a law degree and is married to a Supreme Court justice. If she doesn’t understand, what hope is there for less privileged people?) The UK also lacks consistency and consensus on what the phrase means (partygate is just one example). Canada recently had its capitol and key border crossings held hostage by people who didn’t even understand their own charter and tried to substitute an incorrect concept of the US constitution. So please, which nations still believe in the rule of law?
James Jordan (Falls Church,Va)
Dr. K, A lot of this economic gloom and doom is the result of political messaging. Republicans seriously want to regain power by taking the Congressional majority in 2022. President Biden is on the right path and his strategy is on target. You know it, and so do I. This evening a GOP sympathizer tossed this "message" over my transom: "BlackRock president warns 'entitled generation that has never had to sacrifice' that they will soon face shock due to major shortages: 'Put on your seatbelts MARCH 31, 2022 BlackRock co-founder and president Robert Kapito said Tuesday that the global supply chain and soaring inflation crises will soon have dramatic effects on the U.S. economy that will result in a noticeable scarcity of goods not experienced before by many younger Americans. That scarcity, he said, will likely be a shock to the system for many who are accustomed to an abundant and comfortable lifestyle. "For the first time, this generation is going to go into a store and not be able to get what they want," Kapito said, adding, "We have a very entitled generation that has never had to sacrifice." "I would put on your seatbelts, because this is something that we haven’t seen," he asserted, in reference to what he called "scarcity inflation." Kapito's remarks, first reported by Bloomberg News, were made at the Texas Independent Producers and Royalty Owners Association convention — an annual gathering of oil and gas industry leaders.
Alan Guggenheim (Oregon)
Three quibbles and a thought: 1. Inflation today is NOT easily solved (or solvable). 2. There is no "relearning the lessons of World War I" (because there is NO evidence we learned anything from that war in the first place). 3. Given the number of wars fought the past 100 years since WWI, how can you conclude that for the world to become richer we need to make it safer? The evidence would seem to be to the contrary. On this last point, consider how vastly much richer Putin and his regime are going to be this summer of 2022! And it'll be precisely because of how UNSAFE they made conditions in Ukraine, prompting Western capitalists to jettison their assets in Russia . . . essentially saving the communist regime from having to expropriate them.
T.M. Orr (NY)
While the Ukraine, Iraq and Afghanistan wars have reduced economic productivity through anarchy and destruction, other government policies reduce trade, tending toward isolationism. For instance, after the failure of sanctions threats to deter the Ukraine War, they now redyce trade, harming globalization. Smuggling can help reduce the harm. The government policies limiting trade reflect the interests of rulers vs. the interests of the people. Since the rulers desire the freedom to make wars and restrict trade with their enemies, they desire to isolate the national economy from which they extract their tax revenues from other economies that they desire to destroy. The rulers' desires cost society some of the expected benefits of trade. Our task is to disarm the rulers before they achieve their goal of more conflict, anarchy and destruction.
Blanche White (South Carolina)
Dr. Krugman, You say Countries run by strongmen aren't reliable business partners. It seems we could all agree on that and I just wonder why anyone would ever have thought you can have "normal" trade relations with incompatible political or economic systems? So, I would like to call it what it is....a huge heist by our business class who didn't care a whit that they were selling the working class down the river. The whole thing has been a giant boondoggle by the 1 percent who camped out in the same sleeping bag with their government enablers. Now we have autocracies threatening from "without". And "within" we are threatened by the upheavals of Immigration caused by the lures of that same 1 percent. Without it we would never have had an issue that so galvanizes a huge number of aggrieved people that Trump tuned right into and rode it to power. If we're going to size up world events which have cracked our very core, then it's impossible to separate the importance of the forces of Immigration and globalization. And summing up, if everyone, now, is on the same page that democracies and autocracies don't mix, then it should easily follow that multi culturallism at certain levels is just as incompatible and destabilizing. In following the horror in Ukraine, I noted the requirements for Countries to enter NATO and they seem reasonable. Would that same intelligence have been used to decide who our trading partners could be and who and how many Immigrants we would accept.
NoBadTimes (California)
@Blanche White Odd. I was just reading earlier today how much immigration is down in the U.S. in recent years, mostly from Trump's actions. This is a country of immigrants (my father was one) and I think that your fear of immigrants and "multi culturalism" is quite misplaced. In U.S. history immigration has been one of the primary drivers of a strong economy. Yes, Trump and the hard right used fear of others as a tool in dividing the country as a part of their power grab. But we need to get beyond that fear. We need to be a united country.
Blanche White (South Carolina)
@NoBadTimes Republicans love immigration. So does Trump which is why he employed so many. That doesn't mean he is not aware of how so many feel about the numbers we've had over the last forty years. And he was quite ready to exploit that to achieve his ends. ..and so he did which is why I said that the issue of Immigration brought us Trump. With Trump came a complete breakdown in norms we've all generally accepted. He started to cosy up to Russia, to wreck NATO, to shake down foreign leaders, undermine our elections, refused to pass the torch to the next legitimate President, and then tried to stage a coup.... All Brought to you by "Build the Wall". My statement was completely legitimate that Immigration is one of the forces that is cracking our foundation and is absolutely why Trump was elected so he had to set about acting like he was doing something about it.
john keeley (beavercreek oregon)
@Blanche White We need to decide just what the carrying capacity of or country is ? I can only run so many cows on my pasture before they ruin it . I imagine if we let everyone that wanted to come in it would mean a change in our standard of living . Rewarding people who make it up illegally here just brings more and that makes misery .
Mark Kropf (Long Island)
Cycles of relative peace and war have been seen throughout history and probably will not see the pattern vanish. Temptation to build empires is too great and Nations can find new leaders promising some great destiny. Most leaders can, given novel technology and a bit of good fortune, find some empire awaiting them. Few retain it very long. Whether the economy is damaged by the current war or not is rather moot. Some will always profit by selling weapons or in the rebuilding of the destruction. The cycle has been inevitable and economy suffers, but it has always come back. I am not a fan of the war cycle, but I recognize its existence. I expect globalism to restart in a peace, even if the restart is delayed. Perhaps the present time is different. More important now by far is the global environment which has no role in the cycle and has no patience for man's stupidity. In short, I worry that what will be most important is the accumulated toll of damage we do to the earth and not to our economy. Globalism can attempt the return, but if the Earth can no longer be hospitable to either it or to humanity, then we are all in a whole new form of trouble. Recovery from this may see no cycle.
PictureBook (Nonlocal)
The late Bronze Age collapse created the Greek dark ages and was likely a systems collapse, possibly triggered by famine, that lead to the unraveling of globalization and trade between ancient civilizations. The only civilization to survive was Egypt but it would never again be as powerful as it was during the late Bronze Age. The Sea Peoples were likely refugees fleeing their own crises in Europe that banded together to attack the great Mediterranean cities. Now Lebanon is on the brink of total collapse due to their present crisis from decades of fiscal mismanagement. They have one month of food reserves and are entirely dependent on those wheat shipments from Russia and Ukraine. Egypt has an enormous population it needs to feed and is ripe for mass protests. Yemen and Afghanistan are awash in people, weapons, and suffering. In a worst case scenario waves of refugees topple the governments from Northern Africa through the Middle East and possibly spillover into Pakistan and China. Before famine disrupted the trade of copper and tin, the ingredients that powered the Bronze Age economy. The worst case scenario would be famine in the Middle East interrupting oil supplies which then annihilates global trade. But people seem to be just focused on nuclear war. It is the second order effects that blindside us. We should be building more nuclear power plants while we still have globalization.
Mel Boonchan (New York)
I think that Putin won't exactly harm the global economy as much as many of us think. Yes, gas prices are high. Yes, Russia's invasion of Ukraine has cut a lot of ties, which has let to big economic hits. But I think we have to look towards more long term. This might be a dent, but in the end, humanity will find its way back up. We might have a downward dip for a little, but I believe it will even out. Yes, I am worried about the short term effects this war might have, but I have to keep thinking about how we can always bounce back.
Frank (The Socialist State of Washington)
What a Word Salad article. I read it, twice. I think Krugman said that Putin invading Ukraine will be ending globalization. Or something. Then, his conclusion: "To make the world durably richer, we need to make it safer." What does THAT mean?! Who is "We?"
Blanche White (South Carolina)
@Frank One thing I think it means is that we or our allies must produce the necessities of our existence. ....and what might mean increased costs for consumers will also mean better wages and stability at home. I hope we'll try it.
Alan J. Shaw (Bayside, NY)
@Frank One thing is for sure: "we" doesn't include those who supported the January 6 insurrection and continue to say and act as if they alone are entitled to wealth, privilege and power.
Jim Dennis (Houston, Texas)
@Frank "We" would be the humans occupying the planet.
John Polagruto (Sacramento)
It doesn’t matter what Putin does or doesn’t do; in America, Biden will take all the blame! Sadly, if the GOP simply made no comments or noise for 6 months, it would be to their advantage. I fear that dire times are ahead and if we all think Trump was bad, we haven’t seen anything yet. America and the world are on a precipice, and “as good as it gets” may soon be in our rear view mirror. We are heading into an Era of Uncertainty, which will demand a serious hand at the helm. But, sadly, myopic fools and Twitter politicians are what we are likely to get. :(
David (Disneyland)
Someone wrote here, "It would probably be a lot simpler to bring production back to the US and to build trade relationships with reliably democratic countries than to try to protect the world from the whims of dictators." The US protecting the world? Where does this person live during the last 75 years? On the moon like the little prince? This kind of infantilism is ridiculous.
vr (somewhere)
Sanctions from USA are bad for the small nations of the world. I think Virus from China, war from Russia, sanctions from USA are all destructive. USA has become bad too with these sanctions. I think some economic contraction of western nations will happen while Asia is on the upswing.
Flick Lives (NJ)
I am going to take issue with your throwaway line, "Europe has been reluctant to impose sanctions on imports of products on which, fecklessly, it allowed itself to become dependent." Ultimately, it may have proven to be ill-advised, much like the '53 overthrow in Iran, but buying Russian oil and gas did advance one legitimate goal of the West. And that is, to integrate Russia in the world economy. Europeans buying their oil and gas gave Russians convertible currency they could use to buy the trappings of a Western, market economy. Call it 'Nike diplomacy.' Or the McDonald's Trade. Obviously, the Friedman Theory has come a cropper since Putin decided to hit the road to Kyiv. However, it may still be useful, IF domestic unrest resulting from the Russian isolation leads to a new government. The point is that Putin may have put a nail in global trade for now, unless the Russians decide they're done with dictators of all stripes. But buying Russian oil and gas wasn't 'feckless.' Can you full of feck?
Michael Dunne (New York Area)
@Flick Lives Except they were pursuing those policies when the Soviet Union was around in the 1980s. And, Putin was playing hardball with energy politics for some time now. So yeah, letting that dependence persist to that degree, on the whims of that kind of government, was questionable.
Jim Dennis (Houston, Texas)
@Flick Lives When it became obvious that Putin was a reckless dictator intent on expanding its borders, which started over a decade ago, it was time to rethink shifting from nuclear power and going all-in on Russian gas and oil. Germany takes most of the blame for that. Seemed reckless to me; as is America's dependence on Chinese rare earth minerals and essential manufactured items. We thought China would join the western world of capitalism, but they didn't. They made their own mutated version of it.
Norm (US)
This is purposely designed: Yea, getg me one of those M1 IMac Airs! Holy moly, I have ordered one. I'm disappointed with myself. I wanted to make a point, to serve a political stance, but I cannot do that. THat thing is a work of art. Unbelievable.
Robert (Malibu)
It's all Trump's fault.
Beth (Colorado)
In a cold analysis, one can be thankful that China has its hands full with Covid, which may prevent any aggressive move to take Taiwan.
Io Lightning (CA)
I have just returned from Whole Foods, owned by Amazon of course, and sat down to eat dinner and catch up on TNYT. I was sheepishly proud of myself for not ordering DoorDash (again, sigh). And then I read this quote from 1919: “[Easily order] the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep.” Keynes probably had a different sense of immediacy, but it feels rather spooky.
Louise (New Jersey)
Will Putin kill the global economy? Interesting question. Will Putin kill us all? Terrifying question.
Socrates (Downtown Verona, NJ)
Looks like I picked the wrong year to quit drinking.
TB (New York)
@Socrates There is absolutely nothing funny about what's about to happen, as the transition to the new, post-Covid/post-Ukraine era will involve inconceivable levels of human suffering on a global scale. We're entering a very dark period in history. Even Krugman is belatedly beginning to realize the scope of the economic crisis we are facing, and he's still well behind the curve in understanding the magnitude of the problem due to his political bias, which had him downplaying the challenges to try desperately to make Biden look good. Expect the tenor of his columns to continue to darken as he continues to play catch-up, and reality obliterates his fantasy world of economic theory and political hyper-partisanship. The state of the future of humanity at this perilous moment in history is not a joke.
J (south)
@TB - I'm guessing you, like most economists, successfully predicted 8 out of the last 3 recessions?
Rick (Cedar Hill, TX)
@TB very few people are forward thinking. That is one reason Warren Buffett is so rich.
Padfoot (Portland, OR)
“Beyond that, what Putin has taught us is that countries run by strongmen who surround themselves with yes-men aren’t reliable business partners.” Trump taught us that too.
RI (Ny)
@Padfoot I am not fully ready to buy the only autocracies commit atrocities argument. Ask a Libyan and he will not know which of a collection of self righteous democracies is donating the latest bomb to his neighborhood. Plenty of examples. I just picked Libya because it is somewhat fresh and has a bunch of democracies collectively thinking and making decisions.
Greg (Sacramento)
True enough, the market can do many things, but it cannot create democracy where there is none. If accepting that as the price of de-globalization, so be it.
Gizmo (Boston)
Dr. Krugman come close, but doesn’t get there. Free trade is a free loader on democracy, but doesn’t really support it. After all, in 1913, large parts of the world were under colonial rule and women and black Americans were terribly oppressed. Before the economic policy wonks and the check writers get back together in Davos, some serious thought must be given to freedom, equality and fair trade standards. We will not rid the world of violence if we continue pandering to violent regimes. Saudi, China, Pakistan, Myanmar and India to a certain extent.
Joshua Schwartz (Ramat Gan)
"To make the world durably richer, we need to make it safer." The irony is that doing so will not necessarily help the poor countries that Prof. Krugman is worried about. "Safer" in the world will not improve conditions in Bangladesh. They and others like them are at the mercy of markets and "friendly" democratic countries are not necessarily economic market panaceas for those on the economic fringes. Business is business.
average person (average galaxy)
As a person from India, here is my purely economic take. It scares many people here that somebody sitting in Washington DC has the power to make our credit cards and debit cards and hard earned money redundant in an instant. One might argue that this economic punishment is being given to Russia for a genuine reason, but who knows that it wont be given to some other country for a silly reason tomorrow? So now we need to meet all the expected standards of good behavior from Washington DC or else, swoosh, our money is turned to dust overnight...I think the western response to Russia's aggression is going to hurt globalization in the long run.
Baba (Moon)
@average person I am sorry for your stress. It is quite difficult to live in such uncertain times. This said, "the standards of good behavior" from Washington DC are nothing to be afraid... unless your country kills another one for zero reason other than non-relevant rage. Hopefully the US and Europe is reacting to Russia's murders. This said, I agree with you that it should not be for the people of Russia to pay for this, but only for their dictator leader. And I hope that this will give the Russian people the incentive to remove the dictator in power in their contry.
The Constitution Matters (missouri)
@average person I think what you're analysis is missing out is that globalization, at least under its current iteration, is very much a creation of the "West"... of the security structure underpinning it/enabling global trade and international supply chains (of which India has largely benefitted)... and that Nato/US "hegemony" plays a larger part in the mutually-beneficial comparative advantage that peaceful trade engenders than many would like to admit. The US is certainly not without its faults.... But a truly might-makes-right, truly multipolar world will be one in which there is a much greater likelihood of realpolitik wars of aggression/targets of oppurtunity... with all the attendant disorders that will entail, unpredictably flowing from one to the next... kind of like the 18th century, but with all sort of new tech dangers/nonlinear potentialities than existed before. Traditionally non-aligned countries like India may find, then, that they were in fact coasting on... indeed boosted by the "headwinds" that a unipolar world run by a however-imperfect democracy wrought.... And that handing the reins over to, say, China... will only make things more volatile and cynically transactional. What do you think the CCP will do in their latest "border dispute"... when they, and not the world's democracies, are the ones running Swift? When the renbembi is the world's reserve currency, etc? India may look back at this time and say... woulda coulda but it's too late now...
average person (average galaxy)
@The Constitution Matters My comment is not about West vs Rest or hegemony of US, per se. It is equally applicable if you replace Washington DC with Beijing. I am not asking for a multipolar world in military terms, but in purely economic terms. That one person in the world has so much economic power over us, is what is disturbing.
Rev Wayne (Dorf PA)
We knew the U.S shoe, garment, metal industries had all gone to cheap labor countries. We didn’t know that electric harnesses, electronics chips and many of our medications are also Imported. “What Putin has taught us is that countries run by strongmen who surround themselves with yes-men aren’t reliable business partners.” Maybe what we are also being taught is strongmen running corporations with “yes” managers are unreliable as well. The strongmen controlling our world-wide carbon use have proved unreliable with providing the fuels needed as well as dismissing the toll on our environment. We have too many unreasonable strongmen affecting far too many economies and national freedom.
Currency Trader (NYC)
The Russian ruble is telling me that sanctions are having a very limited effect. The ruble dropped in value when Russia attacked Ukraine ($1 buys 120 rubles) but quickly rose to its former value ($1 buys only 81 rubles). Putin planned ahead and likely established a clandestine banking and finance system to handle the trade he expected the West would ban under sanctions. That provided Putin with "staying power", enabling him to endure the economic siege and gave him leverage in peace talks. Biden is doing a great job, he's doing all he can, but the ruble is telling a different story. My guess is Putin is enduring the sanctions with the expectation that republicans will take over congress in eight months. Once his Trump lackeys are in control of congress, the sanctions will end and Ukraine will be left to fend on its own.
Commodities Gal (Houston)
@Currency Trader It is really a sad commentary that so many people have come to think of the republican party as "Trump lackeys". Even worse, it appears to be accurate. After the latest stunt Trump pulled asking Putin for help in a political campaign, the level of depravity seems to have no bottom in the republican party. I no longer refer to myself as a republican. I would be embarrassed to associate myself with such atrocious behavior.
David (SC)
"Unfortunately, we’re relearning the lessons of World War I: The benefits of globalization are always at risk from the threat of war and the whims of dictators. To make the world durably richer, we need to make it safer." And that means electing Democrats.
James Jordan (Falls Church,Va)
Dr. K, You were particularly astute in bringing up the first wave of globalization. We can only read about this grand transition period but my father came out of this period and was a the oldest male of a large family and experienced the stressful transition that the world was going through as humankind adjusted to the wonders of transportation and communications. In fact, at age 11, after completing the required 4th grade in NC, he went to work as a chauffer driving a lady around in a Baker electric auto in Winston Salem, NC. In those days women did not drive cars. My own grandmother, mother, did not learn how to drive. We know that people are living much better due to our use of coal, oil, and natural gas but our continued economic dependence on these sources of energy can't continue because they are finite and will probably be exhausted in 5 generations, or so, and there is mounting evidence that continued use of these fuels for energy is accelerating the planet's warming faster than we can adapt to the climate and are risking reaching a point where the thawing Arctic permafrost and frozen deposits of methane in ocean depths may runaway and make it impossible to restore the balance of Earth's biosphere resulting in catastrophic, and unbearable consequences for our quality of life and food supply. Your title question triggered my thinking about the probable outcomes from Mr. Putin's irrational behavior my guess is he has done lasting damage to the human species.
Bruce Rozenblit (Kansas City, MO)
We are all stuck with each other. All of the the major industrial producers rely on raw materials that are sourced from all over the world. When war and conflict arises, those supply chains become disrupted which ripples throughout the world. Take oil for example. Russia is a major producer. When that supply is cut off, prices skyrocket and that affects every economy that uses oil for fuel and as a raw material. Same goes for wheat, except besides high prices, starvation will result in the poorest areas. Capitalism always seeks out the lowest cost of production. This works to drive down the cost of goods. They then become more affordable and more people can afford to buy them. War cuts off these sources of manufactured items which then pushes prices up or in the case of sole source supply, takes them off of the market. Semiconductors are a great example. No chips, no cars. The world cannot easily replace highly efficient supply chains that took decades to put in place. It will take many years to reconfigure them. In the meantime, production will suffer. Russia is dragging all of us down with them. The poorest nations will suffer the most and they are usually the ones with the most ties to authoritarian regimes. We will be OK, but there will be an economic contraction.
Blandis (honolulu)
@Bruce Rozenblit Russia is not a major producer of anything but oil and gas, which are in oversupply right now except for the OPEC+ restrictions on production.
Currency Trader (NYC)
@Bruce Rozenblit In reality, there is no justification for our local gas prices and the wreckage its inflicting on our economy. The US supplies most of the crude we consume. The cost of extracting that crude out of the ground didn't rise 40% when Russia attacked Ukraine. Neither did the cost of refining. What did rise was the opportunity to gouge the consumer. Notice there are no reported shortages in the US, just inflated prices.
Commodities Gal (Houston)
@Currency Trader U r correct. If you check the share price of oil company stocks, you will see that the share prices skyrocketed right after Putin invaded Ukraine. If input costs (crude) rose, the share price would not have skyrocketed. The market expects oil companies will make record profits which is why the share price rose. Unfortunately, many members of our congress rely upon campaign contributions from oil companies so our "so called" representatives are not going to squawk.
Ken L (Atlanta)
For the U.S. at least, major de-globalization would be hard and take a while. Our manufacturing capability is a fraction of what it a generation ago. We do business with a lot of countries that are not democratic, like Saudi Arabia and China. We are dependent on foreign capital to buy our ever-growing national debt. A major retrenchment won't happen overnight.
Ben Ross (Western, MA)
Words of wisdom from Mr. Krugman. The same expert who has been telling us print whatever money we want, inflation will not be a problem. Look there has been international trade since the Roman empire. Parts of Britain specialized in tin, from China we got spices. And the reason that subjugated countries were often ok with being ruled by autocratic Rome was that they built the roads that allowed trade and they kept the peace. As soon as Yugoslavia broke up the ethnic wars broke out with Bosnia and Herzegovina, Croatia, Serbia. The reason separate groupings don't last and eventually fall under the yolk of a larger entity is the ability of the larger group to see the forests for the trees and impose a semblance of fairness. It's like 2's a crowd but 3 or more are company, At the time of the civil war we produced cotton and Britain turned that into cloth. the US and the west would like nothing more than to see Russia split up. then their capitalists could move in and sweep up all their assets. And the population of the US could continue to explode to increase markets and build a larger GDP. None of this being planned by one person, just the downside of the invisible hand. In light of Biden administration's provocations, I call this Biden's war. We will see what history has to say when all the dust settles.
Blandis (honolulu)
@Ben Ross Russia split up into what? Ordo you mean the Soviet Union split up?
Ben Ross (Western, MA)
@Blandis Russia has 185 different ethnic groups.
Gary V (Oakland, CA)
"If we are about to see a partial retreat from globalization, will that be a bad thing?" Maybe not. A lot of CEOs and other management bonuses will come down a bit, but then manufacturing could see a renaissance, right here. After all we had the expertise and chose to hand it over to save a few bucks on payroll. Bangladesh and other third world countries are in no danger of facing sanctions from the West. All they want to do is survive and maybe thrive. They are not suddenly going to acquire nukes and threaten to invade their neighbors. Maybe the more intriguing lesson here is for citizens in western and other democracies to keep their democracies robust and not allow creeping authoritarianism. The worst case scenario is Russia and closely followed by China. We have two other example that could kneecap the damaged U.S. democracy, i.e. Hungary and Poland.
Jp (Ml)
@Gary V :"We have two other example that could kneecap the damaged U.S. democracy, i.e. Hungary and Poland." Please. Poland is no threat to the US. Except maybe in the minds of globalist firebrands like Krugman and Germany. But that's only because Krugman's idea of globalism is not only economic but also political. And Germany, well they're still trying to un-ring that Holocaust bell, so they'll do penance to the last drop of Polish, or any other country's, political independence. Many in the world are still angry at Poland for being simultaneously invaded by German and the Soviet Union and having the audacity to survive with a national identity. The never of them.
V N Rajan (Ridgefield, CT)
Krugman bemoans the loss of wheat from Ukraine and of gas and oil from Russia to the international trade due to the Russia-Ukraine war. It takes just 4 months from planning to harvesting wheat and even the Nord Stream 2 gas pipeline from Russia to Germany is only suspended and mothballed and not scrapped and abandoned. You can bet your bottom dollar that as soon as the war comes to an end (even bad things like wars have to come to an end), wheat will be planted, harvested and exported from Ukraine and Russia and all the gas pipelines from Russia will be in full swing in short order. All the talk about Europe weaning itself away from the Russian gas supply is nothing more than mere bravado and achieving that goal is nothing more than a pie in the sky!
Beth (Colorado)
@V N Rajan Europe will reduce dependence on Russian gas. Europe has more capacity to adopt green energy without a domestic oil industry lobby like the one that has kneecapped green energy in the U.S.
beldarcone (las pulgas)
No Putin will not Kill the Global Economy, he and Xi are just remodeling.
Art Kraus (Princeton NJ)
In response to the headline: "Will Putin Kill the Global Economy?" all I can say is, let's hope he isn't crazy enough to go nuclear and kill the Global population.
David (Disneyland)
Dr. Krugman, questions must be radical, answers the same. What has globalization meant for the US? The chance to exploit workforce and thus make more profit. This is what the US have been exporting: not democracy, just exploitation in their own interests. In a little while, they'll be providing gas to Europe after encircling Russia with their NATO, thus provoking what's happening now. It's incredible to think how much a small island such as CUBA bothered the US. How is it possible that the US, an alleged advanced democracy, have never adopted universal healthcare, enhanced the right to quality education, etc.? What a country! It embraces globalization when profitable, fills its big mouth with sentimental words, but in reality it is such a pitiful and unjust country. The bad countries are always some of the other country, of course, as the US piously prosper and export their "advancedness"!
Paul (Minnesota, USA)
Will Putin Kill The Global Economy? Let's hope so. What we have been witnessing for the last 40 years is globalization done wrong.
Dave Sucarow (Brisbane)
Not the global economy, but the American one, which parasitises on the global, he very well might kill. But that will be a service to and a welcome development for everybody else.
Norm (US)
We will kill this economy. Fine. be OK, we don't want to harm you. But I've been proven right. No pleasure in that. Larry Summers? Should anyone listen? No. Let this pitiful person leave human relations. Go! How strong am I? I'll destroy those that think otherwise.
Federalist (California)
Of course he will if he can. Silly question.
richard (the west)
We can hope, I guess.
Stevie (Earth)
N.B. the Chinese Communist Party is anything but yes men, and women, and Xi is not a tyrant at all. and in fact, China's one party is way more genuine a politcial party than either of our "clean Co2" versus Titanic Club partahs.
DK (South Delaware)
Socialism works in Europe when the countries are free . Socialism fails when they are run by brutal dictatorships. You learn that in Economics 101
JFR (Rochester, NY)
Prof. Krugman, do you mean to induce panic into us humble lecturers of operations management? You almost seem to be warning of global depression. Cut that out, please. At least talk through the likely scenarios a little more carefully.
Beach dog (NJ)
Why not?
Far from home (Thailand)
China hasn't invaded anybody? I beg to differ. I lived in Cambodia for two and a half years, and my impression was China now owns it, without firing a shot. A combination of investment and debt makes them the ruler of many countries around the world. And human rights be damned. Xi must be laughing at Putin for his old-fashioned ways.
michael (Shanghai)
@Far from home impression doesn't count, man. Do you know what other people's impression for America? If America isn't happy about China's investment in Cambodia, they can offer something different, why hasn't they?
Ben C. (Westchester NY)
@Far from home Hey! If you call investment into a country an "invasion", then, your country -- I assume it is Cambodia -- can isolate itself from all foreign investments, and stay stagnant economically. See how most ordinary people in Cambodia would like your idea!
Jeff (Chicago)
Somebody's gotta?
Ian (Ohio)
Yet another absolutely brilliant piece by Mr. PK. ... and the clash of democracy and autocracy continues on a planetary scale (Go Team Democracy!), and sadly, in our own country as well. How close we came to losing our democracy is frightening, as is the ongoing choke-collar that Republicans are putting on our democracy, the epitome of freedom. I guess the educated ones think autocracies have their perks (perhaps white people stay in power?), and if so, it'd sure be nice if they simply admitted they're in it for their own selfish interests, not the interests of the country, and admitted that they're attack on freedom -- here, voting, and what voting brings to the empowered) is unAmerican (i.e., against the constitution). Oh well, one can only hope ...
Blunt (New York City)
Globalization as it is implemented now is a disaster that visibly enlarges the global wealth pie but makes the inequality much worse in nations that benefit from it. Elites make a killing, The rest are thrown a bone. So if the global economy recalibrates that would be the silver lining in this brutal mess.
Phyliss Dalmatian (Wichita, Kansas)
Putin is an intelligent man. However, he is severely hindered by megalomania, being surrounded and pandered to by sycophants for decades, and a misplaced sense of invincibility. Sound familiar? He has bet his power, legacy and very own life on this invasion of Ukraine. It’s Putins folly, and ultimately a fatal one. I’ll predict his demise within 6 months, a year at the most. A convenient helicopter crash, a tragic fall down some very slippery stairs. Of course a global crash is coming, soon. It’s inevitable, and will probably be on the level of 2008 to the pandemic fallout. But, we will survive. Russia will be very diminished. The Trump GOP will blame Joe Biden for everything, as usual. Same as it ever was.
Jp (Ml)
@Phyliss Dalmatian :"Putin is an intelligent man. " Be careful now, Folks used to say that fairly often until someone else said it about 4 weeks ago. Since then, it cannot be true.
David Olson (California)
Depending on capitalists to lessen the unimaginably negative aspects of any war is laughable. Capitalism's relentless, rapacious pursuit of quarterly profits is the epitome of disregarding sane policies that actually make the world a safer and better place. Late stage unregulated, unrestrained, capitalism is voracious and destructive and does not serve society at all well.
Thollian (BC)
Is it naive to hope this turns out better? Russians have historically been unforgiving of leaders who lose wars (see WWI again), so they might just turf Putin. This nation has a fatal weakness for strongmen too, but if they get past that for once and establish a proper democracy that joins the EU and obviates the need for NATO, then globalization could get a second wind.
Norm (US)
I'm never going to provide any solutions to this situation. Never and none.
TahoeDon (Incline Village, NV)
As a businessman and inventor I learned 30+ years ago that you always need multiple sources of raw materials. It's stupid to rely on 1 or 2 suppliers especially if you are making anything on a Just In Time basis. While the JIT concept helps to reduce the amount of cash tied up in raw materials, inventory and work in process, it's a nightmare if you can't get all the materials you need in a timely fashion. Russia needs to be put on the shelf economically for at least 3 generations. It would be a tragic mistake to end the sanctions and normalize economic ties with them this century. Let the Russian government and their people learn a harsh lesson. If you want to support an autocrat who will invade a sovereign nation then you will pay a heavy price for a very, very long time.
hen3ry (Westchester, NY)
But we have troubles here at home. Our democracy is threatened by politicians of the GOP persuasion who continue to insist that the 2020 election was stolen from Trump. These same politicians refuse to do the job they are elected to do: serve the people, all the people, not just the ones who elected them. For a rich superpower, the United States has been acting incredibly close minded and petty towards its citizens and the rest of the world. We've had decades to try to wean ourselves off of gasoline powered cars, oil, and fossil fuels. Solar power isn't perfect but it does work and could have, if this country had a forward looking mindset, helped us out any number of times in the last 20 years. We never invested in improving public transportation in urban and suburban areas. We desperately need decent affordable housing but that's not being built. We outsourced jobs that should have stayed here. (Ask any IT person who has had to deal with the interesting side effects of poorly written code from someone who doesn't understand American English.) We have one of the worst social safety nets among our peer countries. If Putin hadn't invaded Ukraine, it would have been China doing something similar, or North Korea, or Iran, or who knows. A retreat on the global economy might enable us to think about what we don't want to outsource. That's important too as is the welfare of all Americans. 3/31/2022 8:27pm 1st submit
M Ford (USA)
Public opinion polls show that a plurality of Americans blame Biden for high inflation and gasoline prices. They are about split on blaming Putin or the oil companies. This is why it is imperative for the Democratic spin doctors to try to get Democratic voters to believe that Putin or the oil companies are making their lives miserable. The Democrats are floundering without a good scapegoat or smokescreen to blame their failures on. Their go to excuses like George Bush, Donald Trump, white Christian evangelicals, lynchings, the Supreme Court and systemic racism aren't working on this one. Hence, I expect to see a ramp up in the liberal media during the election alternately speculating on why Putin or the oil companies are causing inflation while Biden is doing everything to fight it.
Richard Bullington (Vancouver, WA)
Paul, you are a good-hearted man to worry about Bangladesh in these times. I do think we can continue to trade with them with a fairly clear conscience, even if we have to dump Rodi and his zealots. Bangladesh has TWO fairly evenly matched despots who snarl at each other constantly and, so, don't snarl at the people so much.
Richard Bullington (Vancouver, WA)
@Richard Bullington Not "Rodi"; "Modi". Arrgh!
rebecca1048 (Iowa)
I just don’t get any of it, except revenge, and that is supposed to be the Lord’s. We sure aren’t the humans I thought we were - leave it to me to think everything was hunky dory.
Cosby (Greenwich CT)
Putin won’t kill the global economy. Our sanctions driven foreign policy will. The Russians, Chinese and Iranians and others will move to bilateral settlement systems avoiding dollars and euros.
Nancy (Great Neck)
But while China hasn’t invaded anyone (yet?), there are troubles on that front, too. [ This is a wildly offensive, wildly prejudged passage. China is a country of peace, and will stay that way. I am really offended. ]
Stu (Big Sky, Montana)
Whilst I always whole-heartedly choose peace, I whole-heartedly know the world doesn't and won't. Peace is love understood. Peace is the sculpture of love. The irony is that everyone apparently wants peace even thou it has absolutely nothing to do with war. Nothing at all. The sad part is, is that children understand this, we apparently give ourselves to the worlds' children and then deny those very same children the ability to live with a foundation of peace. The world has got to this point today, right here and now, with all of its achievements on a foundation of war, imagine how wise and learned we could be and would be, by simply looking at things from a different perspective. I call on all Artists of this world to promote peace as Artists are the ones with all the real power. It's time to wise up, be brave and love
Norm (US)
Krugman might have been left astray. Not this time with the macbook air. Oops, but this should make up for it. R is available for all platforms.
US Expat Physician (London)
The adverse impact of Brexit on globalization must not be ignored, as much as UK Prime Minister Boris Johnson would like us to do so.
David Parsons (San Francisco)
No, just his own. Putin's Russia is tiny. When Putin is gone ... and Russia is run by a wise democratically elected leader (with opposition candidates) ... who understands economic development instead of old spy tricks. The Russian people will make Russia a great economic, scientific, and artistic powerhouse again... antithetical to a corrupt kleptocracy aligned with corrupted US and EU Plutocrats and their lackeys embedded in business and government. See Game Theory: Nash Equilibrium Dominant Hand, for the Clarity of the Outcome. When Trump and Gang are arrested in the US, and Murdoch is too with his subversive global media, half of the seditious and vicious Plutocrats are gone - ending the Ukraine War and the current EU and US Insurgencies.
TB (New York)
All of a sudden Krugman seems very much more concerned about the impact that the war in Ukraine will have on the global economy than he was just a couple of weeks ago. "Bad, but not really bad". No big whoop. Biden is crushing it. It's all good. And the insouciance of the statement about how "...China hasn't invaded anyone (yet?)" is unconscionable and an affront to the people of Taiwan.
Carmen (San Diego)
I’d like to hear more about BRICS , the “emerging markets” coalition of Brazil, Russia, India, China and other non-NATO and non EU countries. Could the aggression toward Ukraine be an attempt to show value to the group? Currently, Russia has the lowest population in this increasingly powerful economic coalition. It may be that Putin is creating fear for many reasons - perhaps to bring more neighboring nations under the Russian flag and into the safety of the BRICS fold, challenging the EU’s economy.
Bronx Urban Scholar (Bronx)
As Mr Krugman notes tying economic decisions to political ones are key. Doing business where the rule of law is respected ( hint hint Republican Party- would you trust such a group who can’t tell Or face the truth? ). is far safer and ultimately more profitable A wise business person typically knows that Unfortunately there are many less than wise business people in America these days ( eg the pillow guy)
Horace Fundt (Planet Rayon)
Well now you have drawn the precisely appropriate comparison. Especially the technological parallels, spanning the past 35 years. The retrenchment is sudden, and severe.
Jeff (Canada)
"Bringing production back to nations that believe in the rule of law may raise your costs by a few percent" What? Wow, what an out to lunch statement. If bringing production home would increase costs by "a few percent" there would be virtually no outsourcing. Moving production from China to Vietnam will increase your costs by a few percent. Bringing it home will in some cases double or triple it, especially your example of Bangladesh garments. With the high costs of shipping, a window in opening for large goods that are not labour intensive. That's about it.
Allan (Baltimore)
There are also problems with globalization that the USA has not handled very well. In particular, the loss of manufacturing jobs in for example the garment and automobile industries, and the lack of education and support for the lower and middle class workers who lost the jobs. This, in my view has been a terrible error on the part of our society and government, and we are paying for it now. Those workers who are under and unemployed are not happy. They revolted, and unwisely, help bring us Mr. Trump and his minions. If we are now ending or reducing globalization, that might not be a bad thing if it provides more healthy opportunities for our working class. We need to try to make that happen.
Richard Hayes (Raleigh)
@Allan We might also have to reduce our appetite for unlimited "stuff."
Allan (Baltimore)
@Richard Hayes Exactly Richard. Thank you.
V N Rajan (Ridgefield, CT)
Well, Krugman begins this essay with the profound observation "those who had studied past banking crises had a much better grasp of what was happening in 2008 than those who hadn’t." But, all those studies of past banking crises didn't prevent the 2008 global financial system meltdown from happening. Likewise, contrary to the oft-repeated cliche, the vagaries of human nature dictate that even those who do not forget history are often condemned to repeat it!
Joe Brown (Earth)
The political form of government doesn't matter as long as the government is economically democratic. That means the leaders are committed to a bottom-up economy where working people and farmers get their fair share. This ensures stability.
coale johnson (5000 horseshoe meadow road)
recent events are the first thing to give me hope for globalization. in a crowded interconnected world? it turns out that self interest brings countries together.
Rima Regas (SoCal)
There are so many reasons why it was foolish and dangerous not to replace fossil fuels much earlier. The needs of Europe aside, we are burning our planet. Knowing that made the need to develop other means far more urgent than even saving millions of Ukrainians and starving Putin’s war machine forthwith. We exported all of our jobs and left ourselves open to all kinds of risks in the name of prophet in the pursuit of a nonexistent dream. Inflation has eaten up all of the progress from years of activism to increase the minimum wage. Housing is now in a visible bubble that we don’t know how soon will come to a head. The Texas Fed calls it exuberance. The explanation is that money and interests are buying up an average 11% of housing that is on the market, causing housing prices to rise further. The Fed raising interest rates, among other things, will blunt new housing starts, which intern will worsen an already existing long-standing housing crisis. Every downturn has deep costs. Those costs are almost always borne by the 99%. This time is no different. It isn’t the fear of Putin using nukes. We have them too, as does NATO. The fear of having shortages of fuels that is what is keeping America and Europe from completely cutting off this monster of a man and ending a savage war. Here’s to looking at the mirror!
hen3ry (Westchester, NY)
@Rima Regas, the only ones who are exuberant are the people and corporations raking in money while the rest of us struggle to make ends meet, to save for our retirements or, more realistically, the inevitable day when we lose our jobs and can't find another that pays a decent wage. The global economy didn't legislate lousy pay in the United States. It didn't force us not to invest in education, in the infrastructure, or leave us unable to update our shamefully inadequate social safety net. Politicians like Mitch McConnell, Ted Cruz, Marco Rubio, and former Senator Al D'Amato did that. So did Paul Ryan and John Boehner. All of them people who forgot or never knew what it is to depend upon a paycheck to live decent life. That said, Putin is crazy like a fox. He knows what he's doing and, unless something catastrophic happens, he will get what he wants because everyone needs the oil. The Ukrainians and other former Soviet satellites will lose as will the rest of the world. Carter was right in 1976 and 1978. We didn't want to believe it. We're paying now and we've paying ever since.
Rima Regas (SoCal)
@hen3ry Agreed. The use of the word exuberance wasn't a choice I made but the term used by the writers of the Texas Fed report on what appears to be a housing bubble. Carter was right about a lot of things. On fossil fuels, the disbelief in global warming was a charade. The oil companies have long known. This is all greed. Money now. There is always Mars later...
hen3ry (Westchester, NY)
@Rima Regas I know. It’s just annoying that they selected that word.
NA (Montreal)
I worked at Compaq computers in early 1990s. We would not low a Japanese delegation to visit CCM (Compaq Computers Manufacturing) buildings because we didn't want to give away our manufacturing process etc. Now, we all know where HP and all others make their products. We need to make wire harnesses on USA and in Mexico. Similarly, I do not see any reason for my t-shirts to be made in Bangladesh or China or Philippines. I like Ralph Lauren tees and have been buying them since 1980. My tees have become gradually more and more expensive and I am paying the salaries of people outside of North America. In fact, I recall I paid the sane amount for one when it was made right here in Canada... Bottom line, it would be better for us to make our stuff here and only import the things that we have less of here. Oil, for example, would be an item I would be happy to import for it is easy to get out of the ground elsewhere because others have more of it.
Jeff (Canada)
@NA Sorry NA, but you're not getting a t-shirt made in Canada for the same price as one made in Bangladesh. Ralph Lauren is a poor example, because most of that cost is the brand premium you are willing to pay. For a value brand, there is no comparison. Paying people $2 per hour and $20 per hour has a very different outcome in the final price of the product, especially for something as labour intensive as garments.
Red Planet (Los Angeles)
Are there people thinking about how we might transition to a world government? Or will it take World War III before we decide to do that?
Sgt Schulz (Oz)
I can certainly recommend the Economic Consequences of the peace. Here is another great quote from the Introduction "We assume some of the most peculiar and temporary of our late advantages as natural, permanent, and to be depended on, and we lay our plans accordingly. On this sandy and false foundation we scheme for social improvement and dress our political platforms, pursue our animosities and particular ambitions, and feel ourselves with enough margin in hand to foster, not assuage, civil conflict in the European family. Moved by insane delusion and reckless self-regard, the German people overturned the foundations on which we all lived and built."
Norm (US)
Look, we knew this was coming. Krugman was not among the people calling for bad ideas necessarily, but Larry Summers was. Does this line ring a bell? I wouldn't let Larry Summers mow my lawn! Remember. And was I right in the long run? I think so. It's not to gloat, because Krugman knew it as well at the time. Should I allow Larry Summers to mow my lawn? If he showed up at my door I'd probably call the police to shew him away. Sorry folks, this was the wrong guy to listen to.
Jp (Ml)
Krugman is in a loop, providing near real time adjustments to his learned explanations as to why the economy is in the great shape he claims. The one thing that's clear is that Europe cannot handle its security requirements on its own. It requires the United States. We've had combat troops in Europe for 80 years now. Krugman never tires of telling us how Europe is more advance than the US. But the reality is that they're more like children playing in sandbox with the US watching over them. When there were noises about the US pulling out of NATO, Europe let loose with a howl of despair. I guess that was for good reason. Don't worry, the cavalry will arrive in time. But I have to say, your railway system is great.
Jeff (Boston)
The Republicans are most likely going to take back the House and possibly the Senate in 2022. The U.S. is moving towards being run by ra right wing authoritarian government. I'm curious how Paul Krugman thinks that will work out economically.
Mr. B (Sarasota)
To make the world durably richer, we need to make it safer. Substitute ‘humanity”for” world”and Krugman’s statement makes sense. But to make the actual world safer, comprised as it of interdependent biomes, forests, savannas, oceans and a temperature atmosphere, which humans, ie Krugman’s “world”, depend on, but desecrate nonetheless, it would be a lot better off it was durably poorer. The day an esteemed economist like Krugman acknowledges this truth cannot come soon enough.
Thomas Gifford (Sippewissett, MA)
It is natural for partisan economists to look for scapegoats when their favored policies and politicians underperform. Printing money caused inflation. Punishing the energy companies and ESG have resulted in less capital allocation to needed fossil fuel production. Blaming Putin will not change these facts, and unfortunately the democrats will have to learn this the hard way in November.
Rick Cowan (Putney, VT)
@Thomas Gifford US crude oil production is hit record highs in recent months and we give hundred of millions of dollars in subsidies and tax relief ("oil depletion allowance") to fossil fuel megacorporations. Does that sound like "punishing" energy companies?
Viejo Soul (Long Island NY)
Globalization works on many levels, but unfortunately, the all-mighty-dollar dictates so much of our willingness to look the other way when it comes to trading partners....be they authoritarian regimes or otherwise. Whether it's China, Saudi Arabia, Venezuela....pick a country that constantly ignores the civil rights of its citizens, and I'll show you a U.S. corporation that's ready to do business, as long as it keeps retail prices low so as to maximize profits and enhance shareholders portfolios. It's the American way.
Norm (US)
He's going to try. I'm happy with the effects of the sanctions. we need to let this play out as painful as it is.
See also