The globalized system allowed countries to hyper-specialize in high-value production, like Germany in manufacturing or Korea in memory chips. As this system breaks down, nations lose access to global supply chains and must revert to being generalists, causing a catastrophic drop in technological capability and standard of living.
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The move toward a less efficient, more expensive global supply chain is not a failure but a strategic correction. Over-prioritizing efficiency created a dangerous dependency on China. Diversification, while costlier in the short term, is a fundamental principle of long-term risk management.
The strategic competition with China is often viewed through a high-tech military lens, but its true power lies in dominating the low-tech supply chain. China can cripple other economies by simply withholding basic components like nuts, bolts, and screws, proving that industrial basics are a key geopolitical weapon.
The Western belief that free trade would cause authoritarian states like China to liberalize has proven false. Instead, this policy created a powerful manufacturing competitor whose interests diverge from the West's. The current era of deglobalization is an unwinding of this flawed foundational premise of the post-war order.
To maintain imperial control, the Soviet Union intentionally spread the manufacturing of complex goods, like airplanes, across different republics. This policy backfired catastrophically upon dissolution, as each new nation inherited fractions of a supply chain, rendering them unable to produce finished goods and crippling their economies.
The playbook of leveraging a large, low-cost workforce to become a manufacturing power is obsolete. Future competitiveness will be determined by automation density (robots per 100,000 people), making it impossible for nations like India to simply replicate China's industrial rise.
When trade policies force allies like Canada to find new partners, it's not a temporary shift. They build new infrastructure and relationships that won't be abandoned even if the political climate changes. The trust is broken, making the economic damage long-lasting and difficult to repair.
The advanced GPUs essential for AI require a fully globalized supply chain. As globalization breaks down, producing these chips may become impossible. Therefore, the current frenzied build-out of AI data centers, while a bubble, strategically installs critical infrastructure before the window of opportunity closes for good.
The current geopolitical shift toward resource nationalism is focused on critical metals and minerals, not oil. The crude market is relatively well-supplied by producers like the U.S. and potentially Venezuela, making the 'death of globalism' primarily a story about securing supply chains for industrial and technological metals.
Despite narratives of higher purpose, the bedrock of modern life is economic specialization. This system ensures survival and allows for hyper-specialization, which is why economic disruptions so easily unravel societal stability and lead to global conflict.
Globalism was highly successful, lifting millions from poverty. Its failure wasn't the concept itself, but the lack of strategic boundaries. By allowing critical supply chains (like microchips and steel) to move offshore for cost savings, nations sacrificed sovereignty and created vulnerabilities that are now causing a predictable backlash.
