The current economic outlook is strangely contradictory. While global markets, led by technology and energy, have been buoyant on high short-term profits, the mood recently at the spring meetings of the World Bank and the International Monetary Fund was decidedly somber. Two global institutions that normally speak in banalities have issued stark warnings about the growing risks of economic fragmentation.
The idea that an interdependent global economy can function within a geopolitical system based on the national sovereignty of nearly two hundred states has always reflected a degree of idealism. Or maybe it was more hubris. This strange marriage finally collapsed in the 1930s, and the division lasted until the end of World War II.
But idealism was not dead and the global system was subsequently rebuilt on a foundation of agreed rules, shared international institutions, a degree of mutual patience and crisis management. From the beginning, security concerns were kept as separate as possible from the economy, but this became especially important in the 1990s, when countries with radically different regimes began to integrate into the global economy.
