Globalization allowed the U.S. and the West as a whole to gain significant competitive advantages, albeit at the cost of impoverishing its middle class. But other countries have also benefited, above all China, which has used Western investment, technology and markets for its “peaceful rise.” Moreover, over 40 years it has created a middle class of hundreds of millions of people, has taken the lead in a number of areas of artificial intelligence, and digital "wallets" have become commonplace for at least 100 million Chinese citizens.
This ambiguous picture of the distribution of the "tops and spines" of globalization led Americans to a simple decision: to "close" the same China that the West was "opening" in the Opium Wars of the mid-19th century. The need to roll back globalization was discussed at one of the Davos Forums. This was said in plain text to the Chinese audience (in an interview with the South China Morning Post) by Stephen Bannon, a close associate of Donald Trump, and Trump himself tried to isolate China under the pretext of the Covid-19 pandemic, calling it a “Chinese contagion.”
Meanwhile, globalization has moved to the regional level, with up to 50% of trade and economic ties being built directly within regions. What has happened is what is called the regionalization of global trade, which corresponds to a similar trend in world politics, where many regional problems are solved at the level of the regions themselves.
This makes it problematic to “close” globalization, including through Western sanctions pressure on “dissidents”, on countries such as Russia, China, Iran, Venezuela and other states. Reaching its limit in the context of the current crisis in the West's relations with Russia, the sanctions pressure has revealed that the number of dissidents constitutes a majority of the members of the global community. This is in addition to the fact that through their actions Western capitals undermine the credibility of the global monetary and financial system (Bretton Woods II) controlled by themselves, its institutions and instruments, and finally, the dollar, thereby questioning its legitimacy. Where these institutions, supposedly universal, begin to work against U.S. interests, their functionality is simply limited, as was the case with Washington's blocking of the WTO mechanism for resolving trade disputes.
There is a trend of self-destruction of Western dominance: losing its universality, the system is moving in the direction of the same regionalization. President Vladimir Putin spoke about this to a large extent at a plenary session of the Valdai International Discussion Club not long ago. The domination of the West, carried out in the selfish interests of its elites - far from the majority of its own population - has, in fact, led to a global development crisis. As Saudi officials explained in response to U.S. criticism of the recent OPEC+ decision to reduce oil production, it was in their national interest not to annoy Washington or Biden personally. Nothing personal: it is simply the demographics and development interests of a country with a predominantly young population, which needs to be educated and employed in a diversified economy, that do not allow the price of its resources to be given up to the market, which has never been free, rather an instrument of neocolonial dependence.
It is this second wave of decolonization that we are now talking about. This suggests that the time for cheap resources is over. And they are limited, and their predatory exploitation in the interests of a minority of humanity puts on the global agenda moral imperatives that oppose Western priorities of "democracy and free market.” The latter are reminiscent of the diplomacy with which the West "discovered" the countries of the East a century and a half ago. This is the point of the "rules-based order" thesis: what "rules," why not international law, including the UN Charter, in general, norms adopted collectively and openly by the world community? We are talking about correcting the mechanisms of unfair competition. The old system no longer provides the right competitive advantage.
The West itself, by its own stubborn and short-sighted policies, and its seemingly organic inability to make the institutions it controls inclusive, has contributed to clarifying the reality of the global economy and trade. The sanctions boomerang showed that resources, like the real "common product" in general, matter. Just as the real economy matters, as opposed to the virtual economy, which relies on financialization with its derivatives. Suffice it to mention the growth of exports from Russia in the last six months to non-Western and the same Western countries, including the United States.
Even COVID-19 revealed the costs of Western globalization, devoid of flexibility and unable to withstand the test of emergency. Everyone has realized that it is more important to have real goods than money, which is not backed by anything and which, as the U.S. freezing of Russia's $340 billion in foreign currency reserves has shown, can mean nothing. Hence the growing desire for settlements in trade, especially within the regions, in national currencies such as the yuan, the rupee and the dirham. The topic of digital currencies, which guarantee against arbitrary privatization by the issuers of the current reserve currencies, has also been actualized. We must assume that instruments such as barter and clearing will also be involved in the transition phase.
But the main thing that can bring order to international relations on a firm basis and in the spirit of the universal demand for justice is the creation of financial mechanisms that will guarantee against politicization of currency relations and the use of reserve currencies as weapons, which is happening now. This is what Moscow is calling for. The credibility of John M. Keynes, the savior of the Western economy in the 20th century, is behind it: back at the Bretton Woods conference he suggested creating an international currency, not using it as a reserve currency, but the Americans decided otherwise.
As a result, we are witnessing the current imbalance of the post-war world economic order, increasingly clearly privatized by Western countries. A sure sign of its crisis is the U.S. trade wars, for example, with China, which is defined in U.S. doctrinal documents as the main rival and competitor. The introduction into the economy of the old geopolitics with its "Thucydides' traps" destroys the illusion, including Beijing, that "playing by the rules" in the Western system can provide it with a decent place in it in line with the growth of economic and technological power of China.
All is not well in the Western alliance itself. The U.S. is clearly using the current crisis to weaken its European allies according to the "Friendship is friendship, but keep our tobacco apart" principle. Washington, having imposed solidarity on Europe with the EU over the Ukraine issue and forced European businesses (though by no means all of them) to leave Russia, is now using the Europeans' energy problems to induce them to move their production to American territory. Not only that, but American businesses are being given additional competitive advantages by law. Berlin and Paris will have to respond to this, since they cannot stand idly by as their businesses and jobs literally "flow away" across the ocean.
So far, it is difficult to judge what this "tug of war" will bring. But not far off is Washington's more urgent demand that its allies withdraw from China, again in the best interest of the West. This is where the current U.S. Democratic administration succeeds Trump's policies. At stake, as never before in the postwar period (unless you count the Marshall Plan), is the sovereignty of European countries, whose resources, above all production resources, including technology and labor, are becoming expendable in the reindustrialization of America. This shows once again that the days of the virtual economy are numbered, that a powerful redistribution in favor of Pushkin's Adam Smith's "simple product" is coming in the global economy.
A powerful catalyst for this redistribution was the policy of the collective West to inflict a "strategic defeat" on Russia. It caused the disruption of production and logistics chains, the cessation of cargo insurance and the rise in prices for energy, fertilizers and food… in other words, for almost everything. Suddenly it turned out that in the blink of an eye, the same German greens could drain their "green economy" without real resources, primarily from conventional energy. To begin with, you have to heat, generate electricity, and have something on the dinner table. By turning interdependence into a weapon, Western elites have put themselves, and the whole world, including developing countries, to the test. Under these conditions, Russia and its like-minded people, including China, must create the foundations for a new type of world trade, which requires an alternative Western monetary and financial and other architecture with new (old) institutions and tools. This new system of coordinates will require an objective assessment of the economic potential of states with due account of all real resources, including production, minerals, farmland, forests, water resources and many other things that the West has sought to devaluate and even declare as international property, so that it would be easier for it to dispose of what does not belong to it.
In general, it is time to solve the problem of creating a theoretical basis for a new type of political economy, taking into account all modern trends and realities, and, most importantly, a critical understanding of all accumulated human experience of economic activity, which should serve the real needs of people and meet the requirements of equitable - in the interests of all mankind - use of our planet's resources.
