Global warming, the Covid pandemic and geopolitical tensions are tipping us into what Harvard economics professor Dani Rodrik calls “productivism”. It is for States to encourage companies to produce by going beyond tax relief and deregulation à la Thatcher-Reagan. This “supply economy” of the early 1980s was ideologically liberal. Productivism is less ideologized. It mobilizes public policy tools that range from tax cuts to subsidies and a wide range of regulations to encourage or even compel companies to build factories for vaccines, nuclear power plants, semiconductors, airplanes of fight.
The famous American Inflation Reduction Act, which dumps dump trucks of subsidies so that factories decarbonize, is a successful example of this productivism. Joe Biden, European Commissioner Thierry Breton and, to some extent, Emmanuel Macron, are now converted to it. Germany, culturally uncomfortable with these interventions that strike at its ordo-liberalism, is beginning to do so in its own way: slowly but surely.
Among the developments mentioned above, geopolitical tensions are the most structuring. They bring us into a “third globalization”, a new infrastructure of world capitalism. The first globalization concerned the exchange of goods and then of services. It emerged spontaneously in Greek antiquity. This globalization deepened after the Second World War, when a consensus was formed in favor of free trade. Encouraged by the World Trade Organization, it has resulted in an unprecedented drop in customs duties in most countries. The second globalization concerned the organization of value chains.
Exchanges between friends and strategic sovereignty
From the end of the 1990s, thanks to technological progress, large companies organized themselves geographically on a global basis: research and development in rich countries, production in countries with low labor costs. work, distribution in countries with dynamic growth. The third globalization is a “geopoliticization” of globalization. While the first two were guided by economic efficiency, the third globalization operates a reversal: the economy (international trade, prices, interest rates) has become the adjustment variable of geopolitics. Semiconductor flows testify to this. 70% of the chips we use are produced in Taiwan. An invasion of the island by China would deprive us of it. Reason for which the American government contributes to finance the construction of giga-factories in Arizona, in Texas, in Ohio or the State of New York. The Americans restrict their exports, which obliges the European Union to conduct its own policy of subsidies to bring out a European sector of semi-conductors.
The term “deglobalization” is incorrect for two reasons. For one thing, he’s too strong. Admittedly, the ratio of world exports tends to decline a little, but this decline dates from the 2008 financial crisis and it is limited. On the other hand, value chains remain internationalized. Companies are diversifying their supplies by favoring geopolitically friendly countries. We import less from China but a little more from India and a lot more from Romania. States subsidize their production in energy, health industries, food processing. They authorize the opening of mines to secure supplies of raw materials. The third form of globalization involves commercial exchanges between friendly and reliable countries, and an attempt at autonomy in sectors considered strategic.
The second globalization placed the whole world in competition. It was beneficial to the consumer, via lower prices, in exchange for pressure on corporate profits, or even, in the least competitive countries, deindustrialisation. The third globalization benefits businesses since the public authorities help producers directly. On the other hand, it penalizes the consumer who has to pay higher prices. This price is the cost of the domination of geopolitics over our lives.