Economic nationalism will replace globalisation | Tip TV Master Investor Show

Economic nationalism will replace globalisation | Tip TV Master Investor Show


Good morning and welcome to the Tip TV Master Investor Show. I’m Swen Lorenz from Master Investor. I’m taking the position of Nick today to interview our guest. It gives me great pleasure to welcome Victor Hill. You are our second star author behind Jim Mellon. You have the most hits on our website, your views that always combine a commentary of the markets and of investments with history and a broader political context have become very, very popular in recent months, and we have come here to speak to you about our latest issue which we can take a brief look at. It’s called ‘The end of globalisation’. Explain to us first, Victor, what exactly should we understand as globalisation, one of those overused terms? It is an overused term. What we’re saying is that basically in the history of capitalism, different ideological orthodoxies rise and fall, and for the last 30-50 years globalisation has been at the centre of economic thinking. And that is basically an idea which says that nation states are passé, that international borders are inimical to international economic development, that labour and capital should be free to flow across borders just as goods are without any restriction, and it also follows on from that that companies find it natural to relocate their manufacturing activity in those centres where labour rates are cheapest. And what I’m saying is that that is now coming to a juddering halt for a number of reasons that we can discuss. And during those last couple of decades of globalisation there have been a number of companies or groups of companies that have been great beneficiaries of that trend. Can you name a few names? Undoubtedly. I mean almost every so-called multinational corporation has benefited from this trend of globalising. But let’s be clear, you don’t have to relocate your manufacturing activity overseas in order to be a globalised company. And we’re living in a world of digital globalisation where we are all connected to one another even if we don’t leave our desks because we have social media, we have the Internet, we have international media and we have a constant flow of information. So manufacturing was one part of this particular story and to some extent is the most important because the relocation of employment to overseas centres has had huge social impact on the indigenous working classes of most major manufacturing countries. And those indigenous working classes have now started to rise up as we’ve seen – Brexit, Trump, Italy. And what is following, what comes after globalisation if we’re now seeing the end of it? Well, what we are experiencing is a global backlash against the ideological elite, the metropolitan elite represented by both right of centre and left of centre who have perpetuated this particular policy to the detriment of many of their own core supporters. And one of the aspects of that is we’ve actually seen a detachment of the traditional working classes from their Labour affiliation so that you’re going to see, for example, a huge increase in support for UKIP in northern England to the extent that Labour could actually be wiped out in a forthcoming election. So these are, these trends have huge political implications. Which then play into the investment world as well, is that correct? Very much so, very much so. And we’re going to see in Europe, we’re going to see the impact of a rising sympathy for right-wing parties. And let’s be honest, there’s right-wing and there’s right-wing. I’m not talking about, you know, the Austrian example over the weekend. 47 percent of the voting population actually turned out and voted for a far-right party. Which is extraordinary when you think about it. Indeed. It’s unimaginable, it would have been unimaginable 20 years ago. And if you had to come up with a new name for what’s ahead now, what comes after globalisation, would you have a good term for us? What I’m saying is that the opposite of globalisation is not protectionism necessarily. I call it economic nationalism. Some people would call it economic rationalism. It just means you put your own economic interests first in terms of employment, investment, economic policy, and you discourage those entities which want to take capital and resources out of the country to the detriment of your own. And in a sense that’s what countries have always done anyway because Russia and China never signed up to this globalisation credo. You know, their whole economic strategy has been based on growing their own economies, and more so in the case of China because Russia is obviously oriented very much more towards natural resources but the Chinese have become a global manufacturing nation without adopting a notion of globalisation. So in a way we are going back to what used to be normal in the olden days. Is that the right way of putting it? In a sense this is a reversion to a multipolar world, a world of great powers, a world of great power rivalry which is dangerous in a sense but it could also come with opportunities for economic development and co-operation. I do not see isolationism ahead of us under Trump and under Brexit. I think co-operation will be the mainstay. I think you will see a realignment of economic allegiances. For example, when the UK leaves the single market, as seems extremely likely, there will be other opportunities to link up with other English-speaking countries, in the first instance Canada, Australia, New Zealand but why not India and, you know, why not beyond. So, you know, for every closing door another one opens. Yes, and we love to hear about opportunities because we are an investment magazine that likes to look at opportunities, and we’ve spoken about the winners from globalisation. Can you tell us a bit more about who you see as the winner from that new economic nationalism or whatever you want to call it? Who’s going to win in the new era? Yes. I think that we’re going to see an increase in defence expenditure in both the United States but also in Europe and in the major European military powers, France and the UK in particular. And that the message that Mr. Trump is perpetrating to Europe, that they have effectively got a free ride on America’s military coat tails is going to actually get through and that there will be a response to that. So we can expect the large defence contractors to do well. I’m very impressed by what I see of Lockheed Martin because in the past we’ve discussed new technological trends, robotics, artificial intelligence, the bringing together of various new technologies, and Lockheed Martin is absolutely at the centre of that. What they’re doing in terms of aerospace, they’re actually designing already probes that can go to Mars, so that’s a very exciting company. That’s robotics, technology, economic nationalism all wrapped into one. Artificial intelligence is accelerating. Obviously we all know that Google is pioneering that field but it is going to be a major theme of the next decade. I also see… Give us one more. Yeah. I think that food production has been very much a sackcloth and ashes industrial activity and yet it’s absolutely paramount. And food security is going to become an increasing concern in the next 10-20 years both for political reasons but also because of climate change. So in the UK, for example, if we think that we consume, 60 percent of the food that we consume comes from overseas. Which is extraordinary. It’s imported. I mean, that’s worrying in a world post-globalisation and I think we’re going to see efforts to stimulate our agriculture and a lot of people, Associated British Foods and others, are going to benefit from that. Speaking of Britain, one last and short question. Where do you see the Pound going in this entire context in the next couple of months? The French elections are coming up, what’s happening there? I think the Euro is actually at a very critical moment because you have a political storm brewing, what I’m calling the European Spring, about to happen in 2017. That sounds dangerous. Which will make the Arab Spring of 2011 look like a tea party. I mean, I think every government in Europe is likely to change next year. That, combined with the fact that the Eurozone financial system is in a state of extreme fragility, gives us cause for concern. So, you know, in a word, the Euro is under downward pressure. The Pound will benefit to some degree from that. Good, I think many of our viewers will love hearing about that. Holidays in Europe will become cheaper. Indeed. But that’s not really what we are reporting about. We’re reporting about investments for your portfolio, shares, bonds, all sorts of investments that you can buy on the financial markets. And that’s what you can read about as follower of Master Investor on the website www.masterinvestor.co.uk where the latest issue of our magazine is now online. You can download it for free and you can hear about it regularly, as you know, on the Tip TV Master Investor Show where we were very grateful and appreciative of having Victor Hill travel to London to come here and give us his insights. If you want to read more from Victor follow us on our website. You can subscribe to our daily newsletter as well, and you see Victor is publishing about 1-2 articles there on average per week which we are absolutely delighted about. Thank you so much, Victor. Thank you.

2 thoughts on “Economic nationalism will replace globalisation | Tip TV Master Investor Show

  1. I think economic nationalism has an ugly side from the thoughts of Trump, Steve Bannon and Dugin. it is unfortunately related to white nationalism and fascism. But being Mexican I can't help but feel a little bit of inspiration from them… what if we all start look after our countries like they're actually our home. they have a whole crazy right wing ideology about fake news, post modernism and Neo fascism which I find ridiculous and hateful. but they also propose. an interest insight about pride and economic strategy that I can't help but start thinking of ways of applying that in Mexico in the way we run businesses and labor

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