Sunday Posts

As Trump speaks about disengaging from China, the Chinese are doubling down on creating a parallel Information Technology universe free of America-made software. The big tech, usually the champion of free trade and free movement of people, has all of a sudden turned sinophobe. Just when a disease borne by globalisation destroys lives and disfigures economies, we are staring at a fundamental reconfiguration of the world - the great decoupling! It's an ugly word (fittingly for the age of Trump, full of sexual innuendo) but one that really captures what's happening: The integrated global economy that we got used to is breaking apart! This was a process well under way for some time, but COVID19 has accelerated the process. We need to start thinking what comes next and adjust our ideas accordingly. However, amid Donald Trump's rhetoric and China's territorial assertions, it is tempting to start thinking about a new Cold War. But that's not what is happening now: The worl...

After undermining the threat and overdoing the panic, we are starting to discuss, if only very gradually, the possibilities of a post-Pandemic world. After Donald Trump's April 12th came and went, we are pinning our hopes on the ever-so-slight flattening of the slope of the curves in various countries. France's 11th May target to reopen the schools, on the sound logic that digital deprivation is now turning into an educational gap, is being taken more seriously.  However, we know this is not going to be a return to normal as we know it. There is increasing speculation whether this is the end of Capitalism. At least one serious thinker, Slavoj Zizek, believes that this is the moment we will start taking communism seriously (not of the soviet variety, but rather of the war economy type that we are living with now). Though this is rather unlikely - socialism of the temporary kind ends up concentrating ever more resources in fewer hands, as we have seen from the last fina...

When manholes started disappearing around the world in 2004, the world discovered China. Re-discovered, we should say, as, in the Chinese eyes, China was merely reasserting its historical manufacturing primacy after centuries of slumber. But, even in 2004, what it did was still just gruntwork at the bottom end of the world's value chain, jostling for space with Vietnam, Bangladesh and assorted sweatshop countries. Thereafter, came the phase of great copy-and-catch-up, to borrow Tyler Cowan's phrase, and cheap Chinese knock-offs flooded the global markets. The tabloids and governments razed about the poor quality of Chinese-made and pilferage of intellectual property. Yet, this outrage was reassuring, as China seemed far off from gaining any technological edge and forever consigned to fighting it out over the lower cost. 2019 changed all that. The message behind Trump's trade wars established that China, and its companies, may have achieved that technological ad...

It is common to hear - Globalization is not working for everyone! The Right says it, and believes that closed societies with open economies is the answer; the Left says it too, though they believe that the solution lies in closed economies with an open society. The Left says that the Right is xenophobic, and the Right says that the Left is living in cuckooland! And, the Right-of-the-Right and the Left-of-the-Left steal the wind from the sails of their clueless moderates, claiming, in consensus, that globalization is the problem, erasing the right-left divide into a new politics of For and Against Globalization. At least in theory, global trade is good: It should keep the wars away. Stopping trade is the first rumbling of the war, the moment when the possible booty of extraction seems bigger than benefits of exchange. And, this is not just about flows of goods and money: Flow of people too, since when people started to matter in politics, is important in reducing conflicts. Once y...

2017 has brought out all those Nostradamus and other doomsday predictions out of closet yet again, and this is because, rather ironically, 2016 has proved most predictions wrong and doomed the experts. This was a year of losing faith in expertise, as Britain's Michael Gove claimed on television, and sure enough, we got a Twitter-wielding American President before the end of the year. But if one expert has escaped 2016 unscathed, and indeed, vindicated, this would be Dani Rodrik of Harvard's Kennedy School. Dr Rodrik came up with 'Globalisation Trillemma' in 2012: The prediction that Democracies, Nation States and Global Markets can not coexist! One can get two out of the three, any two, but not all three. For all the shock at the events of 2016, this is one model has just been proved right. With all the hindsight of 2016, Dr Rodrik's model now makes abundant sense. At the heart of the 'Globalisation Trilemma' is the argument that Globalisation, by ...

The official strategy for economic development in India is 'Make In India'. This is based on an economic strategy for the dummies - that as China becomes more expensive, India should take its place as the World's workshop - that underwrote the massive electoral victory of India's charismatic new Prime Minister, Narendra Modi. The strategy, so simple that even a simpleton should understand, combined with Mr Modi's 'Track Record' of drawing investment to Gujrat, was dream stuff that makes winning politics, particularly in a country where 69,000 people turn 25 every single day. What makes good politics isn't good economics. China had uneven manufacturing output in the last few years not because it was becoming expensive, but global demand was faltering. Manufacturing, the key to its strategy to lift millions of people out of poverty in the 1980s and 1990s, was not creating as many jobs as we would like to believe it did in the recent years, as automation c...