It's a New Decade, and Economic Globalization is Dead on Arrival
We are not even three months into the new decade, and the existing economic order that has been in place since 1971 is on the verge of crumbling before our very eyes. While this isn't a foregone conclusion yet, it's definitely a real possibility. Don't think leaders and policymakers will just stand by, rather than do whatever it takes to salvage the existing system. The only question at this point is whether confidence can be restored, since we're witnessing unprecedented measures to keep it afloat.
Financial-systems aside, the international order for world trade is finally about to change. For decades now, the default decision to "widen profit margins" was outsourcing and offshoring. Basically, if a multi-national corporation could make an additional 2% profit by outsourcing to an emerging economy, they would do so. Not only have we never been a fan of this concept, but we are now witnessing the utter stupidity behind this whole idea.
The fact of the matter is, there has always been global trade. Examples are: The Silk Road, Roman trade routes with China, Phoenician trade routes to the southern tip of Africa, the Indian Spice trade, and many more. Don't let anyone fool you into believing global trade is going to stop, because it won't. It may temporarily slow down, but the rules are going to change. Countries that have benefited from the short-sighted, greedy, and reckless decisions of large "American" enterprises are about to find out what happens when economic, environmental, and national security/sustainability become the main drivers behind trade policy.
It is absolutely criminal how reliant the United States has become on China for pretty much everything. For example, 97% of all antibiotics comes from China. Who decided that was a good idea? Just because outsourcing produces higher profits and a higher GDP does not make it a good idea. The Unites States doesn't even have a lead-smelting plant. In other words, the next time war comes around, we would have to rely on importing critical materials from other countries to manufacture our own bullets. But hey, at least GDP is higher! The final example we will share is America's reliance on China for rare-earth minerals. Between 2014-2017, China supplied 80% of the rare-earth minerals to the United States. These go into most, if not all, electronic devices. How would Silicon Valley react if China ever decided to stop sharing?
It is clear that in the past 3 decades, the United States has greatly neglected 3 of the 4 factors of production: Land, Labor, and Capital. Fortunately, the entrepreneurial spirit remains strong in America, which is why we're confident we will come out of this mess stronger than ever. But the truth is, we've made our land more accessible to foreign entities than American citizens. We've decimated our manufacturing infrastructure by shipping it overseas for higher profits and GDP (yay!). And we've greatly neglected our labor by choosing to send jobs overseas to save on costs and maintain access to cheap goods. News flash: Most, if not all, Americans, would be willing to pay 30% more for a product if it meant jobs stayed home. What use are cheap goods if you don't have a job and money to buy them?
It is our firm belief that a nation should only import that which it cannot produce itself. At face value, this may go against David Ricardo's theory of comparative advantage, but we have to realize that America is blessed with tremendous resources-- we pretty much have everything we need. We have to think in terms of scale with respect to this theory. Texas can still focus on oil production, and Iowa can still focus on corn production. America must refocus her efforts into being a good steward of what we already have.
Family, culture, tradition, and sustainability all matter more than economic statistics. Americans need to realize that the rest of the world would love to see us fail. It is our duty to our ancestors, and to our future progeny, to not give our adversaries that satisfaction.