Rapidly Changin’

The world’s economy has run with remarkable efficiency for decades.  Coming out of World War Two, trading to some extent started becoming more coordinated.  While not a perfect system (is there one?), trade relationships offered reasons for peace.  This transnational approach to commerce helped lift standards of living across many parts of the globe.  Just-in-time manufacturing dominated the approach and worked well, and then it didn’t.  A worldwide pandemic threw a wrench in the mechanism which has yet to be removed. 

Now the U.S. is turning more inward, concentrating on just-in-case scenarios.  For instance, America is currently supporting private endeavors with subsidies that have ushered in new investments in semiconductor manufacturing.  Support is also helping boosting capital outlays for alternative energy forms and other “green” infrastructure.

Our nation’s more inward tactics could be escalating similar efforts elsewhere.  According to this article from the Economist, India is putting up half the costs for a private company to build a microchip plant.  South Korea is offering generous tax breaks for this kind of investment also.  Nations with reserves of critical commodities are catching on as well.  Indonesia has banned exports of nickel, an important battery component.  There’s even talks between Argentina, Bolivia, and Chile to possibly create a cabal to oversee lithium mining.

Geopolitics is difficult.  Periodically, leadership changes come with new priorities.  The world seems to be heading toward a less cooperative reality.  Countries are beginning to be driven by a different motivation.  Populist policies are emerging in all corners of the world.  Even Japan is making efforts toward a more robust military to potentially fight for itself should the need arise, funding its largest buildup since World War Two.  The nation which invented the just-in-time approach which ushered in globalization in the mid-1900s is now opting for its own unique just-in-case model. As Bob Dylan put it here in 1964, The Times They Are A-Changin’.