the protectionist cycle must run its course
There are so many clichés. To name two—history repeats itself; it is human to make mistakes but fools repeat them. However, man rarely learns from these, and chooses to find out for himself without learning from the past. The very purpose of documented history is mostly lost on mankind.
why is this happening?
I strongly believe that this will happen every time, as long as the basic issues with human beings—ego, greed, complexes—remain.
For decades, we have seen discussions on the developed world and the Third World. Developed economies have always wanted to exploit the rest of the world but in the bargain, developed a strong superiority complex. This also meant that they willingly shifted a lot of jobs, which they believed was not worth their while, to others. Social security, lower number of working hours, and a generally high cost economy meant that manufacturing shifted out of these markets. While doing so, they wanted to keep the high value-adding jobs in technology to themselves.
It is not by magic that China became the factory to the world. But as the cliché goes, the only constant in the world is change. The developing world, through hard work, has caught up in many ways and has been growing much faster while these developed markets, despite the steroids of excessive liquidity, have been stagnant. Now, with geo political tensions, refugee movements, and not enough job opportunities, there is a feeling that their existence is at stake. No one is willing to see the fact that they brought it on themselves.
Therefore, like in the case of many authoritarian leaders like Hitler, racial superiority is starting to come back. Advocates of globalization are now turning protectionist.
time is a one-way wheel
The clock cannot be turned back. The jobs that they cry for do not exist because commerce has taken over. Profit is an evergreen motivation. So, these countries will find over time that they do not have the [right kind of] people to take up high-value jobs; [at the same time], they do not want low-value jobs. The risk, therefore, is that they will only isolate themselves. The rest of the world will soon learn to adjust but the rules would now change in favor of the hard-working population as it should.
there is disruption all around
With new technologies, will come so much disruption that almost half the jobs that exist today will vanish. This will only add to the chaos. This will, therefore, in the short run only add to their feeling of being protectionist.
lessons will not be learnt unless they experience them
Therefore, the protectionist cycle must run its course. Along with it will come commercial, political, and racial tensions. But in here lies the opportunity for the hard workers who need to keep their ego under check and continue to close the gap to tilt the scales in favor of the developing world. There will be new trade treaties, new paradigms on market development, and new benchmarks to efficiencies.
There is no dearth of fools in the world and the intelligentsia will always be a minority with no political influence. So, put your seat belts on. The world must go through this cycle! ■