How can we reverse globalization

The crisis will not reverse the world trend : Three reasons why the coronavirus won't end globalization

It is not only older people with previous illnesses who are on the list of potential victims of the corona crisis - some are also predicting the end of globalization as a result of the pandemic. Crises are actually moments for historical decisions. However, everything never changes after a crisis.

Social science research shows us that social practices change as a result of a crisis if three conditions are met. First, the practices must be seen as the cause or at least aggravating the crisis. According to the textbook, an exogenously caused, as it were through no fault of one's own company crisis requires far less restructuring than an endogenous crisis caused by one's own mistakes.

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Second, there must be alternatives that are feasible and not too costly. During the ozone hole crisis, for example, substitutes for the CFC that caused it were able to establish themselves relatively quickly because they were inexpensive to develop. A crisis is particularly likely to lead to change if, thirdly, the practices affected were already in decline before the crisis. The Second World War led to a surge in decolonization, not least because colonialism had already passed its peak.

Against this background, it must be doubted that economic globalization will become a victim of SARS-CoV-2. First of all, the virus is an exogenous shock, which as such is not a result of globalization. Although the classification of crises as exogenous or endogenous ultimately depends on social constructions - the result is not only determined by objective events, but also by political struggles for interpretation - there are many indications that the current pandemic is classified as an exogenous shock.

A pandemic can also be triggered by air travel

The epidemic occurs locally and then initially spreads in the region. The global contagion map symbolizes this through the many, more or less thick circles, each of which stands for a regional epidemic. It becomes a global pandemic through the networking of regional outbreaks.

However, there is no need for deeper globalization to spread from region to region. The normal traffic connections of an interdependent world are sufficient for this. Only when planes are no longer flying, trains and ships are no longer operating can a virus be imprisoned regionally. But that would not mean the end of globalization, it would rather be a return to the 18th century.

Even in 1831, cholera, which came from Asia, was able to reach Europe despite a military belt. The causal contribution of the further surge in globalization of the 1990s and 2000s to the spread of the global pandemic is small.

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There is no doubt that there are alternatives to global production and supply chains. A partial renationalization of economic processes is possible. However, this leads to increased costs and considerable welfare losses. When normality returns, mountains of public and private debt will have increased everywhere. We will find ourselves in a global recession. The cost pressure will then be particularly high.

This is not an environment in which the likelihood of globalization is decreasing. It is true that the production of protective masks and some medicines may be rebuilt in many nation states. But these are special facts that are not suitable for generalization.

It is true that the pace of globalization slowed down even before the crisis. However, a slowed acceleration is not a reversal, it should not be compared to a decline. Economic globalization was at a high level before the crisis. Presumably it will return there after the crisis.

Video conferences could continue

So caution is called for when quickly proclaiming the end of globalization. Exogenous shocks usually change less in the long term than the extent of the crisis would suggest. Of course, new social practices are rehearsed during the crisis that can endure if they prove to be functional. After the crisis there will probably be more video conferences and fewer international business meetings than before. That would make sense.

The virus will likely accelerate the death of local retailers and increase the market share of Amazon and Co. That would be a shame. Overall, the virus will accelerate the process of digitization because we are now forcibly adopting new digital practices. Perhaps the coronavirus will also lead to the end of the handshake and the greeting kiss as a social practice. We'd probably get used to that too.

However, it seems unlikely that German companies will cut down foreign production facilities on a large scale. It is true that companies that depend on supplies from Wuhan ran into trouble in February. But if they had their production facility or their supplier in North Rhine-Westphalia, then the problem would have been the same, only a little later. So there is a lot to suggest that after the crisis is before the crisis. Everyone will jump again and try harder than ever, especially in view of the bad economic figures to be expected.

Michael Zürn is director of the “Global Governance” department at the Social Science Research Center Berlin (WZB)

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