Welcome to the brave new world:
Today's global economy baffles experts -- corporate executives, bankers, economists -- as much as ordinary people. Countries are growing economically more interdependent and politically more nationalistic. This is a combustible combination. The old global economy had few power centers (the United States, Europe, Japan), was defined mainly by trade and was committed to the dollar as the central currency. Its major countries shared democratic values and alliances. Today's global economy has many power centers (including China, Saudi Arabia and Russia), is also defined by finance and is exploring alternative currencies to the dollar. Major trading nations now lack common political values and alliances.
It is no more possible to undo globalization than it was possible, in the 19th century, to undo the Industrial Revolution. But our understanding of international markets, shaped by impersonal economic forces and explicit political decisions, is poor. Countries try to maximize their own advantage rather than make the system work for everyone. Considering how much could go wrong, the record is so far remarkably favorable. Alas, that's no guarantee for the future.
But people tend to talk about the "global economy" as if it's a finite phenomenon with discrete and fixable components rather than a growing, ever-changing fact of life. And politicians make insane promises based on that mistaken premise. Exports are better than imports, so let's stop all this free-trade nonsense and get back to ""fair" trade.
Markets are messy things. The global market will be messier than anything that has gone before. We're going to be interconnected, as countries and economies, in ways we will barely be able to udnerstand, let alone control. Get used to it.
