Tim Worstall points us to an interesting piece on global trade negotiations by Martin Jacques in the Guardian today:
The irony of Doha is that it is being killed by western disinterest in the face of the growing power of the developing world. The rise of China and, to a lesser extent India, is likely to be accompanied by a parallel irony. The west, which has been the traditional defender of free trade – because free trade always favours the most powerful and advanced economies – is likely to run for cover and put up protectionist barriers, unable to cope with the political, social and economic implications of the rise of China. In a sense, the death of Doha is a dress rehearsal, albeit an early one, for the end of globalisation. And those who bury it will be those who designed it and proselytised for it – the US and Europe. (Guardian)
The idea that free trade favors the most advanced economies, is one of the tenets of the school of though known as World Systems Theory:
the abstract virtues of free trade versus protectionism never determine what actually happens. Ultimately, the question is as much political as it is economic. Those countries who are at a given moment particularly efficient at productive activities are normally the ones who proclaim the virtues of free trade. Free trade obviously serves their national interests. It means they can sell their products in foreign markets without the penalty of tariffs or other barriers. It means they can invest surplus capital in other countries. Those countries who are moderately strong but still weaker than the strongest are normally the ones who try to be protectionist. They feel that, if they can protect their internal markets for a while from the competition of producers in the strongest countries, they can improve their own efficiencies and develop a sufficient internal market to withstand open competition. For them, it is a matter of time. The protection is temporary. Truly economically weak countries are usually too weak politically to get away with protectionism. (Immanuel Wallestein, Commentaries.)
Seen from this point of view, America’s turn away from free trade could be seen as a sign of hegemonic decline.
Hegemony describes a situation where one country enjoys such a strong economic lead that it is to its advantage to sponsor a global political order, knowing that it will be the principle beneficiary.
Examples include Holland and the Treaty of Wesphalia in the Seventeenth Century, Britain and the Concert of Europe in the Nineteenth Century, and the USA and the United Nations in the Twentieth Century.
In the British case, the resurgence of protectionist sentiment, and the turn from informal imperialism to overt military expansionism were signs of decline in the face of growing American and German competition. America’s global posture today looks very similar in some ways.
The interesting question is this: is there a hegemonic successor waiting in the wings, or will the future global political order look radically different to the one we have known for the past five hundred years?