The failure of globalization and the return of inflation
Most of today’s political debates are at heart about globalization. Terrorists, tree huggers, and Trumpists have their cultural complaints, but the great wave of Western populism is fueled by economic anger. Owing to the large amount of money that has been printed, financial asset prices have risen. But median incomes have stagnated. There is much truth in the claim that metropolitan elites have prospered, while the unvisited hinterlands have lost out, and much danger in the myth that all stakeholders benefit equally. Has globalization failed? On its economic merits, globalization can stand tall — not through increasing everyone’s income, though it has done this in many emerging economies, but by reducing everyone’s costs.
