HASver the past three years, the Covid-19 pandemic and the war in Ukraine have exposed the vulnerabilities arising from deep global economic integration. Today, governments and businesses around the world place great importance on shortening supply chains, rebuilding domestic production capacities and diversifying suppliers. These responses are motivated by pragmatic risk management considerations, but also by an objective of economic self-sufficiency. But this aspiration threatens to derail a lasting restructuring of the global economy.
In his 2022 State of the Union address, US President Joe Biden promised to create an economy in which “Everything from the deck of an aircraft carrier to the steel in highway guardrails is made in America, from start to finish. All “. These commitments were crystallized by laws (CHIPS and Science, Inflation Reduction Act), which offered considerable subsidies and tax breaks to domestic manufacturing. The Biden administration has also seized on the concept of “friendshoring”, which represents a kind of regional self-sufficiency based on normative and national security arguments. In response, President Emmanuel Macron proposed that the European Union pursue its own strategy “made in Europe”. This decline in domestic production was not limited to advanced economies. Indian Prime Minister Narendra Modi also pledged to create a “Self-reliant India”. Even before the pandemic broke out, China’s quest for autonomy was already well underway, with President Xi Jinping resurrecting a slogan from Mao Zedong (1893-1976) in 2018, “regeneration by one’s own efforts”.
Self-reliance differs from protectionism in that the stated goal is not to protect specific businesses or sectors, but to strengthen national resilience in a less secure world. As a defensive, inward-looking strategy, rather than a punitive, outward-looking strategy, it seems benign, even sensible. But it nonetheless remains an illusion. Although self-sufficiency is an understandable response to a world moving away from economic openness, it risks fueling even greater systemic instability.
Develop national capacities
Current autarkic tendencies are a symptom of the disappearance of the Pax Americana. The intensifying rivalry between the United States and China and the growing divide between democratic and authoritarian regimes have increasingly compromised America’s ability to keep the global market economy open. However, a hegemon trust that enforces global rules and provides global public goods is a prerequisite for keeping international markets open. When the predominant power no longer has the means or the will to play this role, markets suddenly become inaccessible. It will in fact resort to protectionism to contain new competitors and preserve its own global status, while reducing its international commitments. In response, new challengers, like China today, will undermine the international system by contesting its legitimacy.
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