» Lesen Sie diesen Artikel auf Deutsch

The true hardliners want to answer with a European digital tax on all products sold by US tech companies. They assume that the dealmaker will respond to such pressure by finally realizing how great the advantages of free world trade are for all concerned.

Those who favor stiff resistance are arrayed against the appeasers who want to mollify Trump by meeting him halfway. Thus, in pro-industry circles the idea has gained currency that, to carry out its »green transformation« Europe will need enormous quantities of liquid natural gas (LNG). And so, they continue, it is a fortunate coincidence that the USA is richly endowed with gas and seems happy to export it all over the world.  In this way Europe could at least counter Trump’s argument, at least to some extent, that Europe imports too little from the United States. In point of fact this proposal – however questionable from the perspective of climate policy – would cater exactly to Trump’s demands.

»Is the powerful idealization of an unconditional commitment to growth and global free trade still a position consistent with the tendencies of our time?«

There are specific pro and con arguments that could be brought to bear on both kinds of responses. In fact, the European Union’s tentative, middle-of-the-road approach reflects that ambiguity. Yet one can’t help but notice that both lines of argument start from a certain premise, whether explicit or implicit: that, all things considered, the current structure of the world economy and world trade is a wonderful thing that must be defended at all costs. But is the powerful idealization of an unconditional commitment to growth and global free trade still a position consistent with the tendencies of our time? Extreme and partially escalating warming of the climate, the worrisome loss of biodiversity, a water crisis that may soon come to haunt us, the unfair terms of trade between rich and poor countries, and the glaringly unequal distribution of income and opportunity both within and between those countries all tend to prove just the opposite. Expressing outrage about the egocentric man in the White House and his crude ideology of »American supremacy« will not be enough. We should think more deeply about how economic activity and world trade will look in the future.

»To drift into dependency on the USA for our supply of natural gas will do nothing but considerably prolong the life of the fossil fuel energy system.
 

Diversification in exchange relationships is basically a good thing. That is something that Germans, of all people, have not taken sufficiently into account and even today don’t think about rigorously enough, whether in relation to industry or politics. Thus, for a long time there was a consensus in this country concerning the supply of cheap energy from Russia – in spite of numerous red flags. Have we learned from this? Not likely. The plan – one-sided reliance on the USA for our supply of natural gas – would require building the appropriate new infrastructure while locking us into new path-dependencies. That choice would accomplish little but to prolong considerably the life of the fossil-fuel energy system, with all of its destructive consequences.

It is simply rational to avoid such cluster risks in both our economic life and our choice of trading partners. But in the end far more fundamental matters are at stake when it comes to defining the shape of economic globalization. What should be traded, in what proportions, and under which standards and conditions of fairness? How deep should the global division of labor go, how long and complex should supply chains be, and what degree of dependence and vulnerability do we want to tolerate in those chains? What lessons can be drawn from past crises?

Reducing risks through deglobalization

One of the central lessons to be learned from the ongoing Ukraine war as well as from the coronavirus pandemic and the climate and energy crises is that the global division of labor has gone too far in many branches of economic activity. We now need selective deglobalization, a policy or re-regionalization, and the intelligent minimizing of risks. 
To cite one example, those who save energy, use it efficiently, and generate it from decentralized, renewable sources will be more resilient and less vulnerable to external shocks. Economists might point out that such policies would be replacing expensive imported energy by the services of domestic engineering, industry, and small-scale skilled trades.

Organizing agricultural, forestry, and food economies in sustainable, ecologically sound ways will improve the security of regional supplies, enhance both the creation of value and the quality of life, and reduce climate risks. By the same token, marketing durable and easily repaired goods helps save resources and costs, contributing to the creation of a flourishing circular economy. And governments that establish a high-functioning regional health care system while keeping the production of necessary medicines in their country or at least nearby, will be more autonomous in times of crisis and more capable of taking action than countries which have rationalized, centralized, or offshored everything on the grounds that previous forms of economic activity were inefficient.

»Let goods be homespun whenever it is reasonable and conveniently possible.« (John Maynard Keynes) 
 

In his 1931 essay entitled »National Self-Sufficiency,« John Maynard Keynes – arguably the most renowned economist of the twentieth century – wrote that »Ideas, knowledge, art, hospitality, travel – these are the things which should of their nature be international. But let goods be homespun whenever it is reasonable and conveniently possible…But I am not persuaded that the economic advantages of the international division of labour today are at all comparable with what they were.«  
That observation was truly visionary, and its message was highly positive: openness to the world, freedom, and free trade are not the same things. In principle it is totally legitimate to set boundaries to free trade on ecological, social, or even cultural grounds. For example, if in the future the EU should desire to protect its own steel, produced with green hydrogen, against steel fabricated using fossil energy, it goes without saying that the Union would be entitled to enact a CO2-based border adjustment –  i.e., something like a climate tariff. Likewise, if a country in the Global South wished to protect its still-developing industrial sectors against devastating imports priced at dumping levels, it should be able to impose limitations on such imports via tariffs or quotas. And by the way, it is noteworthy that many industrialized countries did the same thing as a matter of course earlier in their histories.

Globalization in light and shadow
 

The ecological and social impacts of economic globalization that has been un- or under-regulated are extensive, so it will suffice to cite just a few examples here. They include the huge emissions of constantly expanding transportation by air, land, and sea, the captivity of many nations of the Global South in the one-sided role of raw materials exploiters, and the industrialized agriculture in developed countries which, due to their enormous imports of animal foodstuffs, contribute to the destruction of tropical rainforests and wetlands.

»In an asymmetric world economic order, some will specialize in winning and others in losing.«

However, globalization can have fundamentally positive effects such as the possibility of mutual learning through encounters, communication, and the exchange of knowledge or the more rapid diffusion of sustainable technologies, processes, and lifestyles. The point is not that every country should now build its own cars, smartphones, and solar panels itself. Because countries display differential capabilities and experiences, resource endowments, natural, political, legal, and cultural conditions, there will always be exchange, trade, and specialization, but all of it must happen according to rules that are fair to everyone. Otherwise, in an asymmetric world economic order, some will specialize in winning and others in losing.

A central idea of Catholic social teaching is the so-called subsidiarity principle, according to which regulation at a higher level can be dispensed with as long as something can be implemented just as well or better at a lower level. That doctrine dovetails nicely with the Keynesian postulate that says: Let goods be homespun whenever it is reasonable and conveniently possible – and in this way make yourselves more independent and resilient. Let us not forget that Europe is our home.

Thus, it is not a matter of achieving autarky, but rather greater autonomy manifested in new balances between provision for oneself and provision for others, domestic markets and exports, market versus social orientation, competition and cooperation, sufficiency and efficiency, resilience and sustainability. Skeptics often object that by now Germany simply is an exporting nation, the welfare of which depends strongly on sending goods abroad. For the time being, that argument is not wrong, but it would be logical to expect at least two future developments.

»Whoever manages the integration of industry and services most successfully will have bright prospects on future markets.« 

  For one thing, the integration of industry and services will proceed apace. Whoever manages that process most successfully will have bright prospects on future markets. Therefore, it is of questionable value to focus too intensively on industrial production. As time goes on, much will depend on integrated schemes of mobility, a sharing economy featuring communal ways of using durable goods, 3-D printing, and »prosumer« networks in which rigid boundaries between producers and consumers are increasingly erased. Furthermore, notions such as co-creation, co-making, co-working, collaborative consumption, and even creative self-making will play an increasing role.

 For another, once we have a structural policy which emphasizes the principle that we must be future-capable, numerous new value-creating activities and stable employment sectors should emerge. As far as energy is concerned, the focus will be on renewables, the efficient electrification and digitalization of buildings and industrial plants, mobility, and heating.
Resource efficiency and the circular economy, economic activity based on nature, and indeed everything intertwined with human health and well-being will become enormously more meaningful. Likewise, urban design and landscape planning, labor processes, uses of free time – and whatever else enhances Europe’s digital autonomy will gain significance, including above all education, education, and education.

In other words, our answer to Trump must be »Europe.« Once that is taken as a given, it makes sense to strive for fair terms of cooperation with neighboring continents.