ARTICLE – Over the past few years, national-security experts and economic policymakers have found themselves at odds over the best approach to international relations. While geopolitical considerations are currently dominating the discussion, economists must continue to voice their concerns about the long-term costs of fragmentation.
PARIS – In recent weeks, there has been no shortage of speeches by prominent leaders discussing their countries’ relationships with China and the potential economic fallout of geopolitical fragmentation. This is a welcome, if much-belated, discussion. But it must address a fundamental question: Can rivalry and economic integration coexist and, if so, under which terms? The answer will determine the fate of the global economy.
In February 2020, Jennifer Harris and Jake Sullivan published an article highlighting the need for a shift in economic thinking. When it came to managing globalization, they noted, foreign-policy professionals have largely deferred to the “small community of experts who run international economic affairs.” They urged national-security specialists to step up, recommended a proactive stance on public investment, and advocated a more guarded approach to trade opening.
Geopolitics and international economics have long operated under two distinct paradigms. Foreign-policy experts often see global politics as a zero-sum game in which one country’s gain is another’s loss. By contrast, economists tend to focus on the potential for mutual gains from multilateral cooperation and market-led integration. These contradictory paradigms were married to each other by the shared belief that trade and openness were in the best interest of the United States. America’s hegemonic status had its drawbacks, but the benefits outweighed the costs.
Read the article written by Jean Pisani-Ferry on the Project Syndicate website.