Kumar Mangalam Birla, Chairman of Aditya Birla Group, a business conglomerate, in a blog post on a social media site forecast that globalization is making way for ‘slowbalization’.
‘Slowbalization’ is a loose reference to a more gradual opening of markets.
According to Birla:
“While the march of globalization is perhaps inevitable, what is certain is that the world is no longer flat. As globalization makes way for ‘slowbalization,’ the emerging pattern of trend is more regional.”
This phenomenon has been in evidence for a while now. If there was a tipping point which brought it on, it was perhaps the global financial crisis of 2008.
‘Slowbalization’ is not an unfortunate development. It’s a natural course correction.
It is perhaps best understood by referring to economist Dani Rodrik’s “impossibility theorem” for the global economy.
According to Rodrik, democracy, national sovereignty and global economic integration are mutually incompatible. At any moment in time, a country can have only two of the three, but never all three simultaneously and in full.
This “impossibility theorem” is similar to other kinds of trilemma. Rodrik began writing on this trilemma over two decades ago. He’s been prescient.
Many leading democracies, including the dominant economic power US, are seeing the trilemma play out in national politics. In most cases, these countries have responded by pulling back on global economic integration.
This state will not continue forever. If there’s one lesson we have learnt, it’s that priorities will change again. Some time in the future, some public figure will perhaps write that ‘slowbalization’ will soon give way to a faster pace of economic integration.
DISCLAIMER : Views expressed above are the author’s own.