Globalization is ineffective at solving global issues---COVID proves.

The IMF is worried about the risk of a return to the 1930s. It fears the current trend towards deglobalisation will result in trade barriers going up, countries adopting their own technological standards – and rival reserve currencies emerging to challenge the supremacy of the US dollar. Bad all round, in other words.

But hang on a minute. Greater international cooperation is a good thing, to be sure. There are global problems that need global solutions, as the IMF’s managing director, Kristalina Georgieva, rightly noted at a press conference yesterday.

Yet there isn’t much evidence that the current model of globalisation is much good at solving them. As the IMF itself notes in its latest world economic outlook, the debt-relief process is unfit for purpose. A properly functioning globalisation would have resulted in a fairer distribution of Covid-19 shots rather than vaccine apartheid. There would be more effective action to tackle the biggest collective problem of all: the climate crisis.

The mistake is to see globalisation as synonymous with multilateralism rather than the particular variant of international capitalism that has emerged in the three decades since the collapse of communism. Funnily enough, countries managed to find ways of trading with each other in the years before the Berlin Wall came down.

China, the big winner from the past 30 years, has seen a marked reduction in poverty but has achieved it by retaining strong control over its economic policy and movements of capital. Wary of the sort of shock treatment administered to Russia in the early 1990s, Beijing has liberalised its economy in its own way and at its own pace. India has liberalised cautiously.

The rhetoric of globalisation is all about smooth-running and efficient supply chains. An international division of labour and the lack of any controls on capital moves production to where labour costs are lower, and helps keep prices in the shops down.

But as we are now finding out, there is no guarantee that long and complex supply chains are an impregnable defence against inflation. On the contrary, when global production lines get gummed up – either due to a post-pandemic surge in demand or the shockwaves from war – cost of living pressures surface. The past couple of years have brought home to governments the benefits of self-sufficiency: be it in food, fuel, personal protective equipment or Covid-19 drugs.

Moreover, despite all the hype, globalisation has not led to faster growth and more rapid advances in living standards for most of those living in the UK and other developed nations. For the rich, of course, it has been a different story. They captured the gains from global growth and salted them away either in offshore tax havens or – in the case of Russian oligarchs – in the London property market.