Two decades ago, when the Soviet Union imploded, the prevalent opinion in the press as well as in the Academy, was that time had arrived for a unified or “globalized” world.
In tune with this spirit, a series of “global” forums and institutions turned to become a regular feature. Some of them (like the World Trade Organization) issued regulations enforced by sanctions, while others (like the Climate Change forum or the International Court) couldn’t overcome to be ignored by the powerful nations, according to their own interests. The skeptics and “globalifobics” went to the streets to shout protests against this “New World Order”, which seemed more like a “world for the rich and successful”.
What few had been able to tell was how this trend could be thwarted. The rise of new big players (China, India, Brazil, Korea, etc.) in the global arena seemed enough evidence of an irreversible tendency. From time to time, a local or regional crisis (Mexico, Russia, Southeast Asia, Argentina) spotted the screen, but the core of the economic dynamics seemed to remain untouched. Until the unthinkable occurred.
It is a common assumption that Nouriel Roubini was the sole economist to preview the coming crisis with accuracy. Maybe this is true in the short-term; but other observers described the mechanism by which the continuous financial spiral was untenable in the long-term. And not just among the Trotskyite fringe groups who use to predict a revolutionary apocalypse every year. Mauricio Prelooker, a self-taught economist (died in 2001) teaching in Argentine trade-unions, was one of them. Among other sources, he studied in detail Kondratiev’s “Long Waves” as well as Shumpeter’s “Business Cycles”.
Whilst Argentina’s financial suffocation (the Peso was pegged to the Dollar) was mounting since 1995, he advocated the use of a transient “non-convertible currency” to ease the outbreak of the stagnant productive machine, avoiding a painful devaluation and the leap in the dark of a sovereign default (a valuable option for the weakest European economies today) . After the two treats came true I summarized Prelooker’s forecast in an article (in Spanish) published in April 2002. Here’s an excerpt (forgive my immodesty):
The crisis that began in the peripheral industrial economies and kept Japan stalled for years has been, until now, eluded by the United States by appealing to the old trick of undertaking, one after another, successive wars of limited scope. They maintain revived for a while the industrial activity at a low political cost. But this is a limited resource and (in Prelooker’s vision) a debacle similar to 1929 is contained in the self-destructive nature of globalized capitalism.
So the near future is that of a “de-globalised capitalism” circumscribed to a few defensive economic blocs.
A number of these “defensive blocs” seem to be on the march, with a more flexible and careful design than those “free trade with inflation targets” agreements of previous decades which became a straitjacket for economies with too different levels of technology, productivity and resources. While Obama tries to seduce new Asian partners (excluding China), Latin American countries has been developing in the latest years both economic (Mercosur) and political (Unasur, CELAC) forums to care for the needs of each member (excluding the United States and Canada).
If something is desirable for Europe (before an impending outburst of street violence occurs) is to command to the attic the failed Maastricht Treaty and to substitute it for a more realistic one with –at least– “two speeds”.
PS: In this interview the great historian Eric Hobsbawm tells something similar about the Globalization and the string of crisis in the periphery along the nineties.