11 ms·

It is very important for national stability. A highly-interconnected global economy is arguably better at securing international stability.

by ISL 4y ago

hh3k0 4y ago
- bakuninsbart 4y ago
  There's no contradiction in interconnected economies being both better for global stability and more volatile to global instability. On a populist level, these kinds of questions are always presented as either-or, when in reality it is a pretty delicate balancing act. No, we shouldn't be completely reliant on potentially adversarial states for our basic well-being, but intertwined economies change the cost-benefit-analysis of a lot of adversarial geopolitical actions, and that has led to a lot less war in the world.
  - baja_blast 4y ago
    The USSR and United States had zero trade and never went to war. And since the fall of the USSR the number of conflicts has not gone down. Ukraine and Russia were very interconnected, but that did not prevent the invasion.
    - selimthegrim 4y ago
      Uh, we sold them grain, and they sold oil, and let’s leave aside the NEP period…
    - nradov 4y ago
      The United States sold huge amounts of grain to the USSR. Did this prevent a war, or make a war more likely? Who knows? https://coldwarheartland.ku.edu/documents/foes-or-friends https://coldwarheartland.ku.edu/documents/foes-or-friends
    - astrange 4y ago
      The USSR built their industry by hiring Americans to design more or less all of it.
- tshaddox 4y ago
  If you’re talking about global supply chain disruption, isn’t that more about lack of robustness than it is about interconnectedness? I don’t see how preemptively reducing global trade in the years leading up to this pandemic would have helped, unless you just mean that we would have gotten used to doing without certain things earlier.
deleted 4y ago
[deleted]
pasabagi 4y ago
> highly-interconnected I think the problem is, decision makers need to understand what interconnectedness means, and not just on an abstract level. If you make things, you're intimately familiar with just how many components come from China. You're deeply aware of the fact the machines you use are made in basically every country in the globe. That the materials you consume come from literally every corner of the planet. People tend to think about globalization as a matter of buying discrete commodities from different places: bananas from panama. They don't understand that essentially all products today are amalgams from different factories scattered across the globe. That leads to crazy weird decisions like Brexit, silly trade wars, etc. People don't realize that cutting a country out of the system is less like not talking to somebody, and more like cutting out a big chunk of one of your organs.
- ajmurmann 4y ago
  This is also the problem with something like the Buy American Act. I recently heard about a case where pipes(?) had to be pulled back out of the ground because it was discovered that the steel for the bolts had come from China. All this creates enormous overhead and worsens inflation, not make it better.
wazoox 4y ago
That was the main argument for global trade already in 1914. France was Germany's most important commercial partner, and vice-versa. All German rifles had stocks made from French walnut wood! All French locomotives had German-made tubing! This stupid mantra was repeated ad nauseam after 1991, too, with silly op-eds from Friedman and friends about how two countries with McDonald joints in both can't be at war and similar inanities. Surprise surprise, such wars happened many times since then (the latest being, of course, Russia vs Ukraine).
- FooBarWidget 4y ago
  A connected world is not a guaranteed sufficient condition for peace. But that does not mean it's not a necessary condition for peace. One could argue that without economic interconnectivity, Europe could have fought WW1 much earlier, or would have had wars much more often.
  - madrox 4y ago
    While I ultimately believe you're correct (along with open borders and travel) I wish there were more rigorous proofs that this were the case. I think about the line in West Wing: "Free trade is essential for human rights...the end of that sentence is 'we hope because nothing else has worked.' ...Chinese political prisoners are going to be sewing soccer balls with their teeth whether we sell them cheeseburgers or not, so let's sell them cheeseburgers." While war and human rights are different, they're also pretty correlated.
    - FooBarWidget 4y ago
      Human rights is more than just political rights or speech. Hundreds of millions of Chinese lifted out of poverty is a huge win for human rights. When you're poor, you're not free. Having grown up with dirty streets and beggars, you can't possibly imagine how big a deal it is for me to see my hometown transforming into a modern metropolis, and how my grandparents-in-law (in a different city, in a rural area) finaly have... Wait for it... A fscking toilet instead of a hole in the ground, as well as free health insurance. To me and millions of Chinese, these matters much more than being able to vote for the president. A recent study by the Democracy Perception Index shows that Chinese feel that their country is democratic. But this is ludicrous, how can this be? It's because Chinese define democracy by whether they believe their government works for their interest and whether they yield good results, not by how their government is elected. It's not just propaganda; this result is consistent with earlier studies by Harvard and York University, as well as by my own experience on the ground. https://latana.com/democracy-perception-index/ https://latana.com/democracy-perception-index/ The concept of 民主 is much more in line with the 19th century definition of democracy, when the concept was brought to China. It was only in the latter half of the 20th century that (in the west) democracy became synonymous with electorialism. So, not commenting on any other countries. But in case of China, Chinese view democracy and human rights differently. I think we should let them.
ezsmi 4y ago
This argument has been made before. https://en.wikipedia.org/wiki/The_Great_Illusion https://en.wikipedia.org/wiki/The_Great_Illusion Unfortunately, it didn't work out. https://en.wikipedia.org/wiki/World_War_I https://en.wikipedia.org/wiki/World_War_I
- hypertele-Xii 4y ago
  Economics is relative. If you go to war and win, you are wealthier than the enemy who lost. If you are confident of victory, the "cost of war" thus matters less, because you get on top anyway. Of course this only applies in a vaccuum. If there are any nations you don't attack and win, they can just build up their economy while you tank yours fighting and then swoop in to defeat you on the cusp of your victory. Basic strategy in the game of Civilization. The rest of the world gangs up against a warmonger and unless they can promptly achieve world domination, ultimately self-destruct.
munk-a 4y ago
And, in particular, the monopoly Taiwan has over precision chip making is deeply important to their national stability.
teakettle42 4y ago
It’s also very good at securing international ossification, creating a stultifying society of sameness, with the same few billionaires, multinationals, and technocrats running the show, pushing societal and international stability in service of profits. I don’t think the result is a net positive. It looks more like keeping a lid on justified dissatisfaction while preventing any upset of the status quo.
grn 4y ago
I used to believe that but have started to serious doubt it. Some counter-arguments: 1. It's reasoning a'la "It's economically inefficient therefore it's less likely to happen". In my opinions, governments are absolute experts in implementing economically nonsensical policies, international conflicts included. 2. Any link between nations can be weaponized, i.e. imposing tariffs, banning imports/exports, and so on. The greater your dependency on me the more ways I have to harm you. 3. Such weaponization will naturally harm your own citizens but you, as a decision maker, will bear very little cost. 4. The easier it is for me to replace you with an alternative the more likely I am to use that against you -- this is classic BATNA. You don't like my export quota? So what, I've got more interest than I can handle and you can build your batteries without lithium if you don't like that.
Frost1x 4y ago
You have a little feedback loop here because if you optimize only at a global scale and ignore local scale, you could create unstable local scale systems which destablize the global system as well. Hence the many current failures of neoliberalism. And of course, as you point out, if you only optimize on the local scale and ignore the global scale, you'll also create an unstable system. Hence the failures of extreme nationalism we've seen historically. Both cases can lead to instability because of their relationship to one another (the global system is composed of localized systems). You need to look at balance across the entire picture, which means you can't just ignore your own country and its people but you also can't ignore the rest of the world, either. It's tough trying to create a good stable global system that isn't disenfranchizing some large segment of the population.
exyi 4y ago
Interconnected yes, centralized somewhere out of your control? preferably no. In this case, you don't want to be dependent on one geopolitically unstable island. If there is a war, it won't be the EU's decision to start/stop it. You'd want China to be dependent on EU and vice versa, to make it costly to start a war. But if China has nothing to loose by attacking Taiwan and the West would loose all advanced electronics... This is not going to bring any kind of stability. You might only be forced to buy those chips from China, giving the potential aggressor even more leverage (and money)
PontifexMinimus 4y ago
The more interconnected the global economy is, the more single points of failure there are. No thanks, I'd rather society be more resilient.
- hypertele-Xii 4y ago
  > more single points of failure Multiple single points of failure is an oxymoron. Either there is one point of failure and it's "single", or there are multiple and by definition no longer "single".
  - dwallin 4y ago
    You are being pedantic. The expression "multiple points of failure" is commonly used to refer to a single system that can be disrupted in multiple ways. They are are clearly referring to multiple independent systems where each system has its own singular point of failure.
benreesman 4y ago
I think the parent makes a better point in concrete terms. Geopolitically interconnected trade is all well and good in theory, but putting two superpowers at odds over the consolidation of oxygen right off the coast of one of them, with a long-standing grudge between them into the bargain has obvious implications for stability. All of economics looks great on paper until basically any little happenstance quirk utterly breaks the whole thing.
- andrekandre 4y ago
  > Geopolitically interconnected trade is all well and good in theory, but putting two superpowers at odds one impression i get is that perhaps economists and leaders thought they could just leave everything to the market - interconnectedness economically through world-wide ("free" market) capitalism - and then they could politically hang up their hats so-to-speak (everything would take care of itself) because everyone would reach great prosperity obviously, as we have seen in the past 40 years, both within and without there has been alot of economic turmoil (economic crisis) instead of pure prosperity and it turns out politicians couldn't outsource their jobs to the market countries and regions need to politically strive for peace, cooperation and friendship, the market and trade isn't enough imo
pmontra 4y ago
Given the recent news I think that there is no correlation. Russia and the EU are giving each other the finger and no amount of mutual trade changed Russia's long standing attitude of taking all they can get (of course all global powers do that.) Actually, no trade at all between Russia and the EU would have made that area of the world more stable: the EU won't have to scramble to replace energy providers and no sanction could harm Russia. There would still be a war but nothing else.
trashtester 4y ago
For generic trade, yes. But 2020-2022 taught us about what happens to supply chains in emergencies. In March 2020, I made the following predictions: 1) National governments will do what it takes short to provide for their citizens, even if they have to print money to do so, and risk inflation. Check. 2) Supply chains will be shaken up, costs for most goods will go up. Check 3) National governments in Western countries will seek to have strategic industries moved back to domestic or friendly territories. Check. 4) International trust will detoriate, and international conflict will become more likely. Check. 5) As inflation goes up, central banks will try to raise interest rates, but too slowly and too little. Check. 6) At some point, interest rates will rise to a level that causes a severe recession, with rising unemployment, even though inflation still remains higher than the interest rate. As people take to the street, central banks are forced to lower the interest rate, and possibly resume QE. Still open. 7. As interest rates go down, inflation goes even higher than before step 5. It will remain like this for the best part of 10 years (with high volatility), before some countries are willing to take the Volcker medicine for real. 8. As the economic forest fire ends, debts are erased, retirees have lost their savings and the next super-cycle begins.
mushbino 4y ago
A system that doesn't rely on perpetual tension in the search for ever expanding profit would be far better for stability. It's typically been the case that the ones who have the most influence in government know how to make huge profits from instability and conflict. Take a look at the companies making huge profits from the current instability.
bradgessler 4y ago
Up to a point. Like anything, there’s trade-offs that have to be considered. Globalization, at its maximum, would centralize the production of resources to places that are most efficient. As we’ve seen, this causes huge problems when the production and/or distribution systems go down. We finally got a taste of that and are paying the price for it. Some level of decentralization will be good, but hopefully we don’t overdo it and end up too far in the other direction.

It is very important for national stability. A highly-interconnected global economy is arguably better at securing international stability.

by ISL 4y ago

It is very important for national stability. A highly-interconnected global economy is arguably better at securing international stability.

hh3k0 4y ago

bakuninsbart 4y ago
There's no contradiction in interconnected economies being both better for global stability and more volatile to global instability. On a populist level, these kinds of questions are always presented as either-or, when in reality it is a pretty delicate balancing act. No, we shouldn't be completely reliant on potentially adversarial states for our basic well-being, but intertwined economies change the cost-benefit-analysis of a lot of adversarial geopolitical actions, and that has led to a lot less war in the world.
- baja_blast 4y ago
  The USSR and United States had zero trade and never went to war. And since the fall of the USSR the number of conflicts has not gone down. Ukraine and Russia were very interconnected, but that did not prevent the invasion.
  - selimthegrim 4y ago
    Uh, we sold them grain, and they sold oil, and let’s leave aside the NEP period…
  - nradov 4y ago
    The United States sold huge amounts of grain to the USSR. Did this prevent a war, or make a war more likely? Who knows? https://coldwarheartland.ku.edu/documents/foes-or-friends https://coldwarheartland.ku.edu/documents/foes-or-friends
  - astrange 4y ago
    The USSR built their industry by hiring Americans to design more or less all of it.
tshaddox 4y ago
If you’re talking about global supply chain disruption, isn’t that more about lack of robustness than it is about interconnectedness? I don’t see how preemptively reducing global trade in the years leading up to this pandemic would have helped, unless you just mean that we would have gotten used to doing without certain things earlier.

deleted 4y ago

[deleted]

pasabagi 4y ago

> highly-interconnected I think the problem is, decision makers need to understand what interconnectedness means, and not just on an abstract level. If you make things, you're intimately familiar with just how many components come from China. You're deeply aware of the fact the machines you use are made in basically every country in the globe. That the materials you consume come from literally every corner of the planet. People tend to think about globalization as a matter of buying discrete commodities from different places: bananas from panama. They don't understand that essentially all products today are amalgams from different factories scattered across the globe. That leads to crazy weird decisions like Brexit, silly trade wars, etc. People don't realize that cutting a country out of the system is less like not talking to somebody, and more like cutting out a big chunk of one of your organs.

ajmurmann 4y ago
This is also the problem with something like the Buy American Act. I recently heard about a case where pipes(?) had to be pulled back out of the ground because it was discovered that the steel for the bolts had come from China. All this creates enormous overhead and worsens inflation, not make it better.

wazoox 4y ago

That was the main argument for global trade already in 1914. France was Germany's most important commercial partner, and vice-versa. All German rifles had stocks made from French walnut wood! All French locomotives had German-made tubing! This stupid mantra was repeated ad nauseam after 1991, too, with silly op-eds from Friedman and friends about how two countries with McDonald joints in both can't be at war and similar inanities. Surprise surprise, such wars happened many times since then (the latest being, of course, Russia vs Ukraine).

FooBarWidget 4y ago
A connected world is not a guaranteed sufficient condition for peace. But that does not mean it's not a necessary condition for peace. One could argue that without economic interconnectivity, Europe could have fought WW1 much earlier, or would have had wars much more often.
- madrox 4y ago
  While I ultimately believe you're correct (along with open borders and travel) I wish there were more rigorous proofs that this were the case. I think about the line in West Wing: "Free trade is essential for human rights...the end of that sentence is 'we hope because nothing else has worked.' ...Chinese political prisoners are going to be sewing soccer balls with their teeth whether we sell them cheeseburgers or not, so let's sell them cheeseburgers." While war and human rights are different, they're also pretty correlated.
  - FooBarWidget 4y ago
    Human rights is more than just political rights or speech. Hundreds of millions of Chinese lifted out of poverty is a huge win for human rights. When you're poor, you're not free. Having grown up with dirty streets and beggars, you can't possibly imagine how big a deal it is for me to see my hometown transforming into a modern metropolis, and how my grandparents-in-law (in a different city, in a rural area) finaly have... Wait for it... A fscking toilet instead of a hole in the ground, as well as free health insurance. To me and millions of Chinese, these matters much more than being able to vote for the president. A recent study by the Democracy Perception Index shows that Chinese feel that their country is democratic. But this is ludicrous, how can this be? It's because Chinese define democracy by whether they believe their government works for their interest and whether they yield good results, not by how their government is elected. It's not just propaganda; this result is consistent with earlier studies by Harvard and York University, as well as by my own experience on the ground. https://latana.com/democracy-perception-index/ https://latana.com/democracy-perception-index/ The concept of 民主 is much more in line with the 19th century definition of democracy, when the concept was brought to China. It was only in the latter half of the 20th century that (in the west) democracy became synonymous with electorialism. So, not commenting on any other countries. But in case of China, Chinese view democracy and human rights differently. I think we should let them.

ezsmi 4y ago

This argument has been made before. https://en.wikipedia.org/wiki/The_Great_Illusion https://en.wikipedia.org/wiki/The_Great_Illusion Unfortunately, it didn't work out. https://en.wikipedia.org/wiki/World_War_I https://en.wikipedia.org/wiki/World_War_I

hypertele-Xii 4y ago
Economics is relative. If you go to war and win, you are wealthier than the enemy who lost. If you are confident of victory, the "cost of war" thus matters less, because you get on top anyway. Of course this only applies in a vaccuum. If there are any nations you don't attack and win, they can just build up their economy while you tank yours fighting and then swoop in to defeat you on the cusp of your victory. Basic strategy in the game of Civilization. The rest of the world gangs up against a warmonger and unless they can promptly achieve world domination, ultimately self-destruct.

munk-a 4y ago

And, in particular, the monopoly Taiwan has over precision chip making is deeply important to their national stability.

teakettle42 4y ago

It’s also very good at securing international ossification, creating a stultifying society of sameness, with the same few billionaires, multinationals, and technocrats running the show, pushing societal and international stability in service of profits. I don’t think the result is a net positive. It looks more like keeping a lid on justified dissatisfaction while preventing any upset of the status quo.

grn 4y ago

I used to believe that but have started to serious doubt it. Some counter-arguments: 1. It's reasoning a'la "It's economically inefficient therefore it's less likely to happen". In my opinions, governments are absolute experts in implementing economically nonsensical policies, international conflicts included. 2. Any link between nations can be weaponized, i.e. imposing tariffs, banning imports/exports, and so on. The greater your dependency on me the more ways I have to harm you. 3. Such weaponization will naturally harm your own citizens but you, as a decision maker, will bear very little cost. 4. The easier it is for me to replace you with an alternative the more likely I am to use that against you -- this is classic BATNA. You don't like my export quota? So what, I've got more interest than I can handle and you can build your batteries without lithium if you don't like that.

Frost1x 4y ago

You have a little feedback loop here because if you optimize only at a global scale and ignore local scale, you could create unstable local scale systems which destablize the global system as well. Hence the many current failures of neoliberalism. And of course, as you point out, if you only optimize on the local scale and ignore the global scale, you'll also create an unstable system. Hence the failures of extreme nationalism we've seen historically. Both cases can lead to instability because of their relationship to one another (the global system is composed of localized systems). You need to look at balance across the entire picture, which means you can't just ignore your own country and its people but you also can't ignore the rest of the world, either. It's tough trying to create a good stable global system that isn't disenfranchizing some large segment of the population.

exyi 4y ago

Interconnected yes, centralized somewhere out of your control? preferably no. In this case, you don't want to be dependent on one geopolitically unstable island. If there is a war, it won't be the EU's decision to start/stop it. You'd want China to be dependent on EU and vice versa, to make it costly to start a war. But if China has nothing to loose by attacking Taiwan and the West would loose all advanced electronics... This is not going to bring any kind of stability. You might only be forced to buy those chips from China, giving the potential aggressor even more leverage (and money)

PontifexMinimus 4y ago

The more interconnected the global economy is, the more single points of failure there are. No thanks, I'd rather society be more resilient.

hypertele-Xii 4y ago
> more single points of failure Multiple single points of failure is an oxymoron. Either there is one point of failure and it's "single", or there are multiple and by definition no longer "single".
- dwallin 4y ago
  You are being pedantic. The expression "multiple points of failure" is commonly used to refer to a single system that can be disrupted in multiple ways. They are are clearly referring to multiple independent systems where each system has its own singular point of failure.

benreesman 4y ago

I think the parent makes a better point in concrete terms. Geopolitically interconnected trade is all well and good in theory, but putting two superpowers at odds over the consolidation of oxygen right off the coast of one of them, with a long-standing grudge between them into the bargain has obvious implications for stability. All of economics looks great on paper until basically any little happenstance quirk utterly breaks the whole thing.

andrekandre 4y ago
> Geopolitically interconnected trade is all well and good in theory, but putting two superpowers at odds one impression i get is that perhaps economists and leaders thought they could just leave everything to the market - interconnectedness economically through world-wide ("free" market) capitalism - and then they could politically hang up their hats so-to-speak (everything would take care of itself) because everyone would reach great prosperity obviously, as we have seen in the past 40 years, both within and without there has been alot of economic turmoil (economic crisis) instead of pure prosperity and it turns out politicians couldn't outsource their jobs to the market countries and regions need to politically strive for peace, cooperation and friendship, the market and trade isn't enough imo

pmontra 4y ago

Given the recent news I think that there is no correlation. Russia and the EU are giving each other the finger and no amount of mutual trade changed Russia's long standing attitude of taking all they can get (of course all global powers do that.) Actually, no trade at all between Russia and the EU would have made that area of the world more stable: the EU won't have to scramble to replace energy providers and no sanction could harm Russia. There would still be a war but nothing else.

trashtester 4y ago

For generic trade, yes. But 2020-2022 taught us about what happens to supply chains in emergencies. In March 2020, I made the following predictions: 1) National governments will do what it takes short to provide for their citizens, even if they have to print money to do so, and risk inflation. Check. 2) Supply chains will be shaken up, costs for most goods will go up. Check 3) National governments in Western countries will seek to have strategic industries moved back to domestic or friendly territories. Check. 4) International trust will detoriate, and international conflict will become more likely. Check. 5) As inflation goes up, central banks will try to raise interest rates, but too slowly and too little. Check. 6) At some point, interest rates will rise to a level that causes a severe recession, with rising unemployment, even though inflation still remains higher than the interest rate. As people take to the street, central banks are forced to lower the interest rate, and possibly resume QE. Still open. 7. As interest rates go down, inflation goes even higher than before step 5. It will remain like this for the best part of 10 years (with high volatility), before some countries are willing to take the Volcker medicine for real. 8. As the economic forest fire ends, debts are erased, retirees have lost their savings and the next super-cycle begins.

mushbino 4y ago

A system that doesn't rely on perpetual tension in the search for ever expanding profit would be far better for stability. It's typically been the case that the ones who have the most influence in government know how to make huge profits from instability and conflict. Take a look at the companies making huge profits from the current instability.

bradgessler 4y ago

Up to a point. Like anything, there’s trade-offs that have to be considered. Globalization, at its maximum, would centralize the production of resources to places that are most efficient. As we’ve seen, this causes huge problems when the production and/or distribution systems go down. We finally got a taste of that and are paying the price for it. Some level of decentralization will be good, but hopefully we don’t overdo it and end up too far in the other direction.