Abroad Thoughts from Home

I wonder if it's like this for you. A couple of days ago, I was skyping with a friend I've known for decades. He not British and lives abroad, but keeps a flat in London where he's a regular visitor. Over the years his friendship is something I've come to value deeply. We were talking economics, as usual, and suddenly it dawned on me that quite possibly I might not see him again for years. After all, if there's no effective vaccine against Covid 19, then the chances are that international travel will involve doctors appointments & certificates, quarantines at both ends of the journey, and air ticket prices running at multiples of what we're used to. How often will he get over to London; how often will I get over to his city? I mourned, surprised at how much this mattered to me.

Last night, when I found myself awake at three or four in the morning, I fell to pondering about how one should think about de-globalization. Of course, my first recourse is to economic data, and it was all I could do to restrain myself from fetching my 'British Historical Statistics' (the most valuable book in my library) to see if I could find a similar period of deglobalization. Europe in the 16th century after the 30yrs War perhaps? Britain's 17th century during the Protectorship? The 19th century from the Congress of Vienna to the 1848 revolutions?

And I found myself also wondering about how of AIDS and HIV changed behaviour and expectations.

My mood, and my expectations, are darkening mainly because I'm beginning to wonder if, in any real sense, we will ever get to a time 'after coronavirus'. I am sceptical that scientists will be able to create a vaccine that is of more than transitory use; I am alarmed at the bewildering targets Covid can hit (lungs, heart, kidneys, liver, gut, brain, blood); I read the news that those having survived it once are not only not immune, but are more vulnerable to a re-infection; and I take seriously the possibility that this virus was bred as a 'red team' monster in the Wuhan lab against which they were training to fight future hazards.

If there's no cure, the best we can hope for in the medium term is a better range of treatments which can make it at least a more survivable sickness. Like HIV.

At this point of the early morning, the thought 'de-globalization' generated a picture in my mind, a movie in which people were hacking at the thick trans-Atlantic cables through which our data flows. Great trunks of optical fibres being chopped off as they emerge from the sea. It was that picture which turned the tide: it was an absolutely ridiculous vision.

The networks of information, of finance, of commerce, of ideas and friendship which span the globe and structure our lives are far too ubiquitous, dense, multi-faceted, and valuable to be lost. Even without a vaccine, Covid-19 will not drive us into a de-globalized world. Even without a vaccine, Covid-19 cannot drive us into a de-globalized world.

But it can and probably will change the terms of globalization. Once again, I'm thinking of how HIV changed the world's gay sex-life. Not that I'm any sort of expert, but the trajectory from the 1970s pre-AIDS careless promiscuity to the closure of the last San Francisco gay bath-house in 1987, to the current respectability of gay-marriage seems fairly clear. From casual to committed.

Maybe that is what Covid-19 will do to globalization: by raising all sorts of costs, what is at risk is not globalization per se, but casual globalization. Casual globalization - the habit, the assumption, that you can just jet off to somewhere without thought - for holiday, for work, for a stag night. Let's face it, we've all done it. As an economist based in Hong Kong I spent a large portion of my life on planes, either running around Asia to write country reports or (save me!) the sovereign sections of IPOs or bond offerings, and then marketing them to the rest of the world. After I left that part of the industry, I rented a flat in Beijing for a few months to learn Mandarin. And so it has gone on and goes on.

Is this frenetic global cirumambulation really less casual than the gap year in Goa, the school trip to Namibia to 'help build a school', or even the stag-night in Prague, the rave in Ibiza?

Yet when I examine who I have really admired on these travels, it is precisely the committed globalists who spring to mind. It would be embarrassing to name names, but what they share is a longstanding committment to the country they've chosen to live in. A surprising number of them have books to their names, though words are not their living. Others have laboured for decades building or supporting businesses. They are the robust human infrastructure which allowed us 'casual globalists' to know that the options were open, the possibilities wide. I don't think Covid is going to make much difference to their lives. Most likely, however, it will simply make them more valuable for the cultures which they straddle.

The eclipse of 'casual globalization' can be expected shuffle the winners and losers. The immediate comparative winners will be local-specific companies servicing their domestic economies. They can be expected to diverge from the cookie-cutter model of product supply and delivery which accompanies globalization. If so, the second winners will be local stockmarkets. Yes, it may be that the emerging market managers' favourite theory - de-correlation of markets - may finally begin to deserve some credit.

Two final thoughts. Committed globalist companies will find their costs rising even as their immediate growth prospects recede. But in the longer term, they will also face less competition, and less casual cut-throat competition. In the long term, the winnowing out of the casual globalists will be good news for them. And last, but certainly not least, if the casual globalization model has been a significant factor in the distortion of Western capitalism, as I believe it has (see Out Time: Where It Went Wrong), then, who knows, its eclipse may yet lead to a rediscovery of growth through investment, earnings through productivity improvements, and economic resilience through a less imbalanced balance between the eternal trilemma of efficiency, equity and sustainability.