'This article focuses on the ongoing inflation debate. What caught my eye is the reference to reshoring as an inflation risk, "But that doesn’t rule out a very different form of global cost-push inflation – namely, the confluence of supply-chain congestion (think semiconductors) and protectionist clamoring to reshore production."'
An observation courtesy of Michael Murphy - National Delegate - FP7 Security at Enterprise Ireland
The Ghost of Arthur Burns https://www.project-syndicate.org/commentary/fed-sanguine-inflation-view-recalls-arthur-burns-by-stephen-s-roach-2021-05
The line at the end, protectionist clamouring to re-shore production, is the note I will comment on. The simplistic nativist splendid isolation world view is based on a belief that national sovereignty trumps trade and international commerce. Under this view each national economy is a closed system of consumption and production, ideally independent and isolated from others. It holds the false belief that commerce with/in the world, with 'outside' nations can be a one-way street, that the my sovereignty can gain access to outside finance, markets, technologies, knowledge without reciprocating in turn to your sovereignty. It is a profoundly narrow, reductionist and dangerous outlook that ignores both externalities (consider the environment and the climate disaster) and inherent efficiencies, some places are just better at some things than others (tropical fruit, pelagic fish, manufacturing semiconductors). Further, it devalues the global good of diversity of cultural distinction (music, language, arts etc) - difference is exotic, expanding, and valuable.
