Agenda Austria with a passionate plea against new “economic nationalism”
Does “America first” now come after “Europe first”? Isn't the regional economy the best protection against the next pandemic?
The failed trade agreement with the USA (TTIP), the tussle over Brexit and now the Corona crisis have rekindled the debate about the sense and nonsense of globalization that was believed to be over.
Some want the dependence on China and other Asian countries z. B. in the medical field. Others are pushing European and Austrian platforms and department stores to break the market dominance of Google, Facebook, Amazon & Co. And still others see “reshoring”, i.e. the relocation of productions and companies from abroad, as the solution that is clearly more crisis-proof because it is local.
“That is nothing other than economic nationalism. Protectionist efforts are a threat to peace and prosperity in Austria, ”says Agenda Austria economist Hanno Lorenz. Together with colleagues, he shows in a 40-page paper by the economically liberal think tank how much Austria benefits from free world trade – without overlooking negative developments (climate, labor market, etc.). “We have to better intercept the losers from globalization and give them new perspectives with training and further education in order to increase the acceptance of globalization,” says Lorenz.
Every second job
For the author of the study, business and consumers alike are on the winners' side. 56 percent of Austria lives from exporting its goods and services. Every second job in this country is dependent on foreign trade, directly through exports or indirectly through suppliers. And when it comes to imports, Austrians also benefit from low prices and consume internationally, be it food, clothing or the new smartphone. The same applies to the digital world, says Lorenz: “Facebook, Twitter and Instagram are part of everyday life for many – even without the Made in Austria seal of approval.”
Rather, the advancing globalization and the integration of Austria in worldwide supply chains brought the average citizen between 1990 and 2018 an annual increase in prosperity of almost 1,270 euros, Lorenz quotes a study by the Bertelsmann Foundation. “Opponents of free trade ignore that: Foreign trade strengthens the purchasing power of low incomes particularly strongly.”
Reduce the use of resources
But what about the climate? What about the proven connection between globalization, economic growth and emissions? As a climate-concerned person, doesn't one inevitably have to take a stand against environmental theft in the wake of globalization?
The authors of the study are of course familiar with the argument, but it is “one side of the coin”. Because: “Globalization and international cooperation make it possible to use new, clean and more efficient technologies all over the world, which in turn save. In some cases, international trade and thus the cost-effective production of renewable energies is even a prerequisite for their establishment, ”the study says.
And yes, it will be “absolutely essential” to achieve economic growth with less use of resources. But it is also clear that climate change does not stop at national borders. That, too, is an argument for more, instead of less, international cooperation.
