Thursday, January 19, 2017

The World´s New Disorder

Cover of The Newyorker Magazine
on Flickr under Creative Commons License
The following thoughts are the result of brainstorming two articles that have quite opposite stances. One of them is Yascha Mounk's "The Best-Case Scenario for the Trump Presidency" the other one is Simon Kuper's How to avert catastrophe" published in the Financial Times.

I have to agree with Mounk when he says that "confident predictions of doom are as simplistic as mindless optimism"However, I cannot do other than admit that there is a lot of truth in Kuper's affirmation when he says that "Today’s elites are often mocked for failing to foresee the financial crisis of 2008 but, in fact, such blindness is standard. In 1914, few people expected the first world war: the historian Niall Ferguson has shown that bond prices held up that summer, meaning that investors didn’t foresee higher government borrowing. Forecasters also missed the Holocaust, China’s Cultural Revolution and September 11."

I have to admit that, for as badly as I intend to opt for Mounk's approach to today's reality, I'm inclined to make a catastrophe-prediction: the World will give us a long-lasting lesson. Globalization is way too advanced. Betting against it, a loser bet. Free market can be a double-sided knife. Anybody, any country, allies or enemies can bubble you up and pinch you down. If they didn't do it so far is because we have been good boys, great consumers; because it's more profitable let's being prosperous and play inside our markets than bet against it. But, change those rules, bully the World around with your military power, alienate your traditional allies, and we'll have a huge retaliation. 

Globalization is the logical corollary of free society and free market. Globalization is the brain-child of liberal capitalism. In a trade war against China or Russia, with their market regulations and laws about who can own stocks or bonds, they will be the indisputable winners. 

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