In his piece, Prof. Eichengreen provides a thorough overview of two distinct views of globalization and questions the common view that globalization is in reverse:
Globalisation, these observations all suggest, has been a process of progressively deeper integration. It has deepened in the past and so the suggested conclusion is that it will continue deepening in the future—assuming, of course, that it does not collapse. Since 2010, on this interpretation, globalisation has indeed shown signs of spinning into reverse. Global trade has grown more slowly than before, by just 2 per cent per annum. Global GDP, it is worth recalling, continued to expand despite all the world’s travail, at an annual average rate of nearly 4 per cent, and so the trade-to-GDP ratio, probably the most straightforward measure of globalisation, has thus been falling, not rising. More strikingly still, gross financial flows across borders are now down to half their pre-2009 levels, a development that has become known as “The Great Retrenchment.” And, contrary to widespread presumption, the global stock of international migrants actually rose less rapidly in 2010-15, by 10 per cent, than in 2005-10, when it climbed by 16 per cent.
There is, however, strong reason to favour a second view, that globalisation is a state in which societies and governments accept a degree of integration and the ceding of certain sovereign national prerogatives, but no more. This state can persist without requiring “ever deeper integration.” Indeed the experience of the last few years suggests that there is no reason why the volume of cross-border transactions can’t grow more slowly, or even decline absolutely for a time, while also allowing societies to maintain their basic commitment to openness and interdependence. Although global trade has plateaued, there has been no global trade war. While cross-border financial transactions have fallen, they have not collapsed. There has been no Schachtian constriction of international capital flows like that of the 1930s.
His argument is a nuanced refutation of the “decliners” as well as a warning that any progress to date can be reversed.