Prior to the pandemic, capital used to move seamlessly, while workers didn’t. Now, this trend could be reversed.

Globalisation, as we knew it — until the pandemic — was asymmetric. Capital was able to move almost seamlessly, while workers were generally corralled in the countries where they lived.

This increased mobility of capital, compared with the post-war decades before this phase of globalisation, was made possible by improvements in banking technology and much more flexible rules (‘open capital accounts’) on transferring capital abroad. But perhaps most important was the expectation that one could invest in far-away destinations without significant risk that the assets would be expropriated or nationalised.

The new globalisation taking shape looks asymmetric too, but exactly the reverse of the old. Labour will become increasingly global, while movements of capital will be fragmented. How did this come about?

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