The 2008 financial crisis and the long, slow recovery set off a sequential chain, particularly when taken together with the growing electoral strength of nationalist and populist parties that reconfigured political processes. The emergence of new parties, the changing character of established parties, Brexit and the election of Trump in the 2016 US presidential election can all be understood within this context.

Populism and nationalism were, however, not the only element within the processes unleashed by the financial crisis. There were other economic shifts. Some of these were visible whereas others were subterranean. Some were the result of policy measures pursued by governments whereas others had a more unplanned and unforeseen character. Some extended the process of globalization whereas others held it in check or countered it. This chapter offers a balance sheet by assessing the extent to which the globalizing processes of the 1990s and the first decade of the new century were in overall terms stalled or perhaps even reversed in the decade or so that followed the financial crisis. On this basis, we should ask whether terms such as “deglobalization” or “deglobalizing processes” can be legitimately used or if some other descriptor should be found.

The “great trade collapse”

The financial crisis quickly found its way from the USA to other countries and just as quickly hit the wider “real” economy. Real GDP growth, the most common measure of a country's economic health, crashed in the second half of 2008. As demand slumped and production seized up across much of the developed world, there were inevitably consequences for the flow of world trade that contracted sharply between the third quarter of 2008 and the second quarter of 2009.

It has been dubbed the “great trade collapse” because, although there had been drops amid the oil shocks of 1974–5, again in the early 1980s and then at the end of the dotcom boom at the turn of the new century, it was “the steepest fall of world trade in recorded history and the deepest fall since the Great Depression” (Baldwin 2009). Whereas global GDP dropped by 2 per cent between the third quarter of 2008 and the second quarter of 2009, world trade fell by about 15 per cent over the same period (European Central Bank 2010: 16).

As different chapters of this book have argued, the jury is still out on the debate around deglobalization. This is because much of the empirical evidence presents us with a highly variegated picture. There is no metanarrative – whether it be continuing globalization, deglobalization, slowbalization, reglobalization without China or de-risking – that adequately captures the totality of processes and developments over recent years. Instead, all these processes are evident alongside each other. Indeed, they overlap and interweave.

“Deglobalization” should therefore be understood as a conglomerate or composite of different processes each with its own pace and governing logic. Some “fit” alongside each other and are complementary whereas others clash and abrade against others.

Polanyi's double movement

To the extent that there were slowdowns, reversals, rollbacks and efforts to counter the effects of globalizing forces, these can be seen, as has been argued by growing numbers of commentators, through the prism of the “double movement”.

The concept of the “double movement” is tied to the work of Karl Polanyi. In his 1944 book The Great Transformation, Polanyi charted the ways in which the spread of industrial capitalism and the “disembedding” of the economy in the late eighteenth and early nineteenth centuries, so that it was seemingly self-regulating, broke up traditional English communities. These had, it was argued, offered a degree of security and social protection, which were then displaced by wage labour and commodification (Polanyi 2001 [1944]). For landless labourers and the emerging proletariat, working-class life was brutal. The relentless logic of the unregulated market would leave individuals isolated, poor, vulnerable to disease and the business cycle and locked into endless uncertainty: “man was detached from home and kin, torn from his roots and all meaningful environment” (ibid. 2001: 87). Put another way, market forces would, if unchecked, lead to the annihilation of “the human and natural substance of society” (ibid.: 3).

Polanyi argued, however, that the self-regulating market economy could never be fully realized (Block 2001: xxiv–xxv). This was because processes of “marketization” inevitably and necessarily spurred a double movement in which industrial capitalism and market liberalism gave rise to counterforces that offered shelter from the storm of market forces.

The terms “globalization” and, as a corollary, “deglobalization” defy easy or straightforward definition. They can refer simply to trade or exchange. Or they can describe the ways in which the production of commodities takes place across different countries. Or they can go beyond economic arenas and refer to the speed and ease of communications across much (but certainly not all) of the globe and the extent to which national borders are broken down.

If we turn to more formal definitions these reproduce the everyday usages but put them in more rigorous terms. Globalization has for example been defined as “the freer movement of goods, services, ideas, and people around the World” (Micklethwait & Wooldridge 2003: xix). Put another way, it “is a process that erodes national boundaries, integrates national economies, cultures, technologies and governance, and produces complex relations of mutual interdependence” (Gygli, Haelg & Sturm 2018). Or it can be understood as “the widening, deepening and speeding up of global interconnectedness” (Held et al. 2004: 67). It might also be defined as “the growing interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information” (Peterson Institute for International Economics 2022). Or we can again go well beyond markets and flows and understand globalization as “a spatial concept referring to a set of social processes that is transforming our present condition of conventional nationality into one of globality” (Steger 2023: 3).

Some definitions go a stage further and spread from processes to effects. Globalization, it has been argued, has had decisional, institutional, distributive and structural impacts (Held et al. 2004: 70). It has for example reconfigured decision-making by changing the architectureof potential costs and benefits while also changing the overall policy agenda. At the same time, globalization has led to shifts in the distribution of power and wealth and in the character of the economic and political structures within which individuals, interests and constituencies are located (ibid.).

Efforts have also been made to operationalize and measure the extent and scale of globalization and, in more recent years, deglobalization. As with the definitions that have been proffered, they inevitably struggle to establish the bounds of the concept.

Globalization, multinational firms, migration, supranationalism and the overall process of cross-national economic integration were subject to bitter opposition even before the term “globalization” was in wide circulation. This chapter looks at how and why opposition to globalization (increasingly framed by sections of the right in terms of “globalism” and “globalist ideology”) was mainstreamed within a comparatively short-run time-period.

There are, however, methodological hazards. Just as it is difficult to establish the history of globalization, identify its scope and bounds, and ascertain the significance of earlier globalizing waves, it is similarly difficult to chart the history of opposition to, or revolts against, globalization. Some rough and ready choices have to be made about what should be included and what should not be considered. The rise of nationalism and fascism in the interwar period can be understood as a reaction to the first globalizing wave ahead of 1914 and as an attempt to reassert and rebuild nation-states and, on this basis, construct empires across Europe, East Asia and Africa. The isolationist impulses in the USA, preventing it from participating in the League of Nations, can be seen as a “heartland” backlash against global entanglements. If protests against immigration or those regarded as being without national roots are considered, the history is a very long one. Anti-Semitism has been tracked back long before the fourteenth-century plagues were ascribed to Jews, and centuries later, Martin Luther called for their slaying. Up until the Second World War, London's East End was not only seen in terms of poverty and danger but as a bastion of “alien” peoples. In the postwar years there was widespread opposition to immigration in western Europe regardless of whether newcomers came from the former colonies or as “guestworkers” serving the industries that prospered during the boom years of the 1950s and 1960s. Furthermore, the USA’s emergence as a global hegemon and the ubiquity of American corporate brands and entertainment during this period led to periodic waves of protests from sections of both the right and left. They sought to assert their national traditions and campaigned against what was depicted as a US strategic, cultural, political and economic takeover.

During the heady days that followed China's entry into world markets and the conclusion of the Cold War during the early 1990s, the term “globalization” appeared to define the era. For many it was a relatively new word and was suddenly to be found everywhere (Cyr 2001).

As already noted, globalization can be defined narrowly or broadly. Almost all the definitions, however, imply or indeed assert that states and societies are, or perhaps were, being increasingly submerged within global systems and networks. Within this context there is both a broadening and an acceleration of economic processes. All in all, to borrow from an important analytical essay, globalization has four dimensions. It rests upon the increasing extensiveness of interactions, exchanges, connections and relations so that they span and incorporate areas of the world that were once largely isolated, the increasing intensity of those interactions, exchanges, connections and relations, the rising speed or velocity of those interactions, exchanges, connections and relations, and their growing impact upon communities and societies (Held et al. 2004: 69).

As a consequence of changes over recent decades in the character of these four different dimensions and interconnectedness more broadly, small-scale shocks and events in one country or region can have very serious repercussions across the globe (Manzi 2019: 471). For example, given the extended character of supply chains, events in perhaps a small part of China could have a dramatic impact upon the availability and use of mobile phones in the USA or Europe. And, as the 2008 financial crisis demonstrated, there was a sequential chain of events as consumer credit was made widely available in the USA: property prices peaked, individuals faced increasing challenges repaying bank loans, thereby placing the financial instruments created on the basis of those loans in jeopardy, and this in turn led to a credit crunch triggering severe global repercussions.

Arguably, as this implies, the concept of globalization involves more than increases in the volume of trade, exchange and investment but it also entails a fundamental shift to a “new economic structure” (Hirst & Thompson 2004: 99). Another definition makes the same point but goes further, representing globalization as an even more radical shift. It is “a material and ideational phenomenon or process which reduces the spatial distance between distinct geographical regions.

The turn against globalizing processes has encompassed emerging trade wars and the efforts, in the wake of successive crises, of “de-risking” through the diversification of supply chains or their reshoring. Populism and nationalism have also become an increasingly salient feature of politics and the ideas around which they coalesce have increasingly been mainstreamed as both centre-right and centre-left parties have sought to recapture the votes that they have lost to these new forces.

This chapter considers the growing use of “industrial policy”, particularly within the Western countries that had formerly proclaimed their allegiance to the efficacy of free market economics. Industrial policy refers to the proactive use of state resources and powers to promote economic development in chosen sectors or the expansion of chosen firms that are selected as “national champions”. The turn to industrial policy has been accompanied by a revived faith in government economic interventionism more broadly and an increasing scepticism, or at least caution, towards markets and market-based outcomes.

This chapter argues that the increasingly large-scale use of industrial policy, which has been endorsed and supported, albeit in different ways, by governments on both the left and much of the right, is coming to play a pivotal role in fuelling deglobalizing processes. Indeed, even though the East Asian countries used industrial policy and “developmentalism” to secure their place in the world economy, it may well become an important “driver” of deglobalization. By its very character, industrial policy inevitably gives credence to zero-sum forms of economic thought whereby countries can only secure gains by winning advantage over others. It contains an inherent nationalist edge.

The “new Washington Consensus”

Edward Luce of the Financial Times has argued that there is an emerging paradigm that is broadly shared across North America and Europe and is largely bipartisan in character. He develops this description by invoking the concept of a “New Washington Consensus” (Luce 2023). From this perspective, and while it may seem eccentric or perverse amid the bitter partisan divisions in Washington, DC, both Republicans and Democrats offer more or less the same message based on visions of American decline and the rise of China as a threat and a competitor.

During his 2012 presidential re-election campaign, Barack Obama attracted Republican opprobrium when, in a speech, he pointed to the ways in which US businesses depended for their existence on government backing not only because of its social and economic programmes but also through infrastructural provision such as roads and bridges. “You didn't build that”, Obama said in words that were frequently thrown back at him. He was, Republican campaign commercials charged, insulting self-made firms.

In a similar vein to former President Obama, I should say that I didn’t build this book. It has been helped enormously by others to whom I owe an immense debt of gratitude. In particular I should extend my thanks to Alison Howson of Agenda Publishing, who proposed the original idea and has guided the project from beginning to end, for her support and ability to apply pressure with an astutely judged mix of kind-heartedness and resolution. I should also extend my gratitude to colleagues and friends at Copenhagen Business School and the Sino-Danish Center for Education and Research. A special word of thanks goes to Sebastian Ahistich, Torben Juul Andersen, Jens Gammelgaard, Thomas Heitmann, Bersant Hobdari, Steven Hurst, Mads Dagnis Jensen, Lars Bo Kaspersen, Bent Petersen, Jan Stuckatz, Grahame Thompson, Alex Waddan and Ayca Uygur Wessel. Last, but certainly by no means least, I am grateful to Gravens Rand for providing a hospitable home from home as the book took shape and developed. It goes without saying that I am alone responsible for errors, omissions and judgements.

Edward Ashbee

Copenhagen