System Shift

“The Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades,” Larry Fink, the CEO of BlackRock—the world’s largest asset-management firm—wrote in the latest of his widely read annual letters to shareholders. It’s an idea gaining currency. Adam Posen, the head of the pro-globalization Peterson Institute for International Economics, says in Foreign Affairs—the flagship publication of the influential U.S. organization the Council on Foreign Relations—that the war has accelerated a “corrosion” of globalization. And the prominent American columnist David Brooks wrote in The New York Times that “globalization while flows of trade will continue, … globalization as the driving logic of world affairs—that seems to be over.” Why would a war between two countries with relatively limited roles in the world’s economy cause such a historical transformation in it?

Adam Tooze is the Kathryn and Shelby Cullom Davis professor of history and director of the European Institute at Columbia University, as well as the author of books about World War I, German economic history, the Great Recession, and the economic effects of the Covid pandemic. Recently, on The Signal, Tooze spoke about how the war has worsened already rising commodity prices and redefined global economic power through unprecedented sanctions. Here below, he addresses the ways the conflict is revealing changes in the dynamics of globalization that started a decade ago. The source of these changes, he says, is the growing hostility between the U.S. and China, and Washington’s worries about losing economic power to Beijing. But Russia’s attack put an end to one of the most deep-rooted beliefs about globalization: that countries tied together through trade would become more peaceful and law-abiding. What’s really changing now, Tooze says, is how people think about globalization.

Michael Bluhm: What’s happening with all the talk about the end of globalization?

Adam Tooze: It’s saying that the Russian invasion of Ukraine has put an end to the globalization we’ve experienced over the last three decades. It’s not saying globalization as such is coming to an end; it’s saying globalization as we’ve known it is coming to an end.