Valdai Club

A new edifice of the world economy cannot be built overnight, but, obviously, the process of its construction has already begun. We can see firsthand that although the current crisis has complicated international economic communication, at the same time it has awakened many new forces that are willing to seize the moment to take a better place in the global economy, writes Valdai Club Chairman Andrey Bystritskiy.

The modern world is trapped in a crisis, and the crisis is worsening. It is obvious that, in general, the general bitterness is growing; the fault lines between different parts of the world, states, and opposing forces are deepening. However, at the same time, the interdependence of countries upon one another has not gone away, and, in a certain sense, is even increasing.

So, the dimensions of the global crisis unfolding in recent years include an intellectual one: you need to understand what things depend on each other and how. Perhaps, by the way, this is the most important thing: after all, to resolve any difficult situation, you need not only the strength, or, for example, the will, but also the ability to foresee, to develop intelligent solutions in which it will be possible to look for ways to resolve even the most complicated situations. Whatever one may say, the main difference between a person and other living beings lies precisely in the ability to imagine, predict the future, and to come up with ways to achieve what you want, despite obstacles that sometimes seem insurmountable.

I have written before that in many respects, the reasons for the current, very complex and dangerous state of affairs lie in the fact that over the past decades, if not centuries, interdependence in the modern world has been growing, while the ability to regulate this dependence has obviously lagged behind. Whatever sphere of life we explore, the connectedness of mankind increases everywhere. The most obvious sphere, in my opinion, is communications. Incredible communication platforms have grown before our eyes, powerful social networks have appeared; people have massively plunged into the waves of a raging information ocean, in which confident navigation has turned out to be impossible. The technological revolution has overcome national, state, religious, and in general any borders and unambiguously raised the question of the ability of mankind to regulate this sphere, to develop some kind of rules that can be followed throughout the world. Alas, so far, the results of various attempts to develop the rules and regulations are, to put it mildly, extremely sad. The rules did not emerge. Nation states faced a difficult choice of necessary measures to protect the national information space, ways to provide the population with reliable information about what is happening.

The communication sphere is the most important in people’s lives, since it creates sociality, that is, a space in which people can act as they want. For example, they can love, choose a profession, achieve success, and so on. It is clear that the economy — and it has always been, in fact, a material form of communication between people — is highly connected with communication, with the interdependence in which the world is immersed. Accordingly, the immersion of the entire communication sphere in the digital environment has had the most decisive impact on the situation in the global economy.

To a certain extent, imperceptibly we found ourselves in a world of various apocalyptic forecasts. Digital slavery has arrived. The manipulation of data, including personal data, has become common practice. Even the notorious cryptocurrencies were “under surveillance”. Why this happened is a separate question.

The very idea of sanctions, the effectiveness of which, has always been in question, is a consequence, on the one hand, of interdependence, and on the other hand, of the asymmetry of the location of the key control points for the technological platforms of the modern economy. It turned out that payment systems like Visa or MasterCard can easily disable tens, if not hundreds of millions of users in an instant at the behest of the authorities of just a few countries. Various systems, like SWIFT, also turned out to be a means of manipulation and punishment, disrupting established economic ties. The notorious convenience of the dollar in international settlements also turned out to be a trap for those countries that decided to choose an independent path of development.

In general, of course, the ease with which the elites of Western countries rushed to force the whole world to follow their decisions is simply amazing. Some observers, by the way, saw this as evidence that the economy turned out to be subordinate to the political will, that monetary, mercantile interest is subordinate to values. Well, values, as Max Weber once noted, are extremely important for the development of capitalism. But the current crisis has rather shown that the fear of losing a dominant position in the world, the fear of direct and open competition with new economies, such as China, India or Russia, is what drives Western elites. The crisis also showed that all sacred, seemingly capitalist shrines, such as free markets or fair competition, can be easily rejected when it comes to the well-being of the Western elite strata. Not without reason, by the way, the current crisis, to a certain extent, completely revived the modern left: they understand it as a crisis of the modern capitalist system.

But back to where I started: interdependence has not gone away, the need for world trade and world economic cooperation has not gone away either. In addition, most of the world does not want to take part in the Western attempts to weaken Russia, which would be dangerous for the whole world. On the contrary, most countries of the world (and some Western countries too) want to somehow establish and maintain economic ties. Nevertheless, this requires rules, financial infrastructure, means of payment and systems for them. They need regulatory tools that could be reliable and that would not end up in the same hands.

It is clear that a new edifice of the world economy cannot be built overnight, but, obviously, the process of its construction has already begun. We can see firsthand that although the current crisis has complicated international economic communication, at the same time it has awakened many new forces that are willing to seize the moment to take a better place in the global economy. These new forces exist in Russia and in many other countries, for example, in China, India, and Malaysia. While there is much to worry about or grieve about today, we still see some very definite positive signs.

By the way, in principle, such a system cannot and should not exclude any country in the modern world.

These and other issues will be discussed at the traditional session of the Valdai Discussion Club as part of the St. Petersburg International Economic Forum. This year’s theme of the session is “The New World Economy — Not Global, But Interconnected”.