‘Entanglement’ era is coming: Oxford University professor

On the final day of the 25th World Knowledge Forum on the 11th, Arthur Laffer, Chairman of Laffer Associates, discussed with Lee Soo-hyung of the Bank of Korea, warning that tax increases on corporate, income, and unrealized capital gains could harm global growth. (Han Joo-hyung)

The world today has moved beyond mere interconnectedness and entered an era of ‘entanglement,’ according to Professor Ian Goldin of Oxford University.

Goldin made his remarks during the 25th World Knowledge Forum hosted by Maekyung Media Group at The Inspire Entertainment Resort in Incheon on Wednesday.

“Humanity may or may not enter an ‘era of shared prosperity,’ where many of the problems we‘ve faced since the beginning of time can be overcome through tremendous technological advancements,” he said.

At the forum, leading scholars strongly refuted claims that the ‘end of globalization’ has arrived as protectionism, such as tariff barriers, become more widespread.

In the past, globalization was simply about ‘connectivity,’ they argued, during which there were negative reactions thanks to conflicting national interests. But what is now paradoxically occurring is entanglement, where cross-border ties become inevitable.

This outlook suggests that the fate of countries will diverge depending on how they capitalize on this entanglement.

Goldin noted that “goods, services, people, and ideas are transcending borders in both physical and virtual spaces, creating a more pronounced form of globalization.”

For his part, William Lee, chief economist at the Milken Institute, commented, “A new wave of globalization is unfolding as technological services, rather than goods blocked by tariff barriers, increasingly cross borders.”

Tufts University Professor Michael Beckley added that “it is wrong to talk about ‘de-globalization’ as trade and movement between countries is driven by strong human needs.”

This ‘entanglement’ is expected to increase volatility not only in the economy but also in various fields such as geopolitics and climate change.

“Countries around the world have become like an intricately entangled community of shared destiny due to this new form of globalization,” Goldin said, warning that “in this situation, a lack of cooperation between countries could exacerbate global threats like climate change, pandemics, and financial crises.”

New York Life Investments chief investment officer Jae S. Yoon predicted that “the year ahead will be a highly volatile and potentially unstable period.”

For his part, Laffer Associates Chairman Arthur Laffer, a former key economic advisor to the Trump administration who is also a candidate to become the next Federal Reserve chair, emphasized tax cuts as a solution to untangle this complexity.

“The United States experienced economic booms whenever it implemented tax cuts,” Laffer, who is known for his ‘Laffer Curve,’ said. “Each time taxes on the top 1 percent were reduced, the U.S. economy flourished, while high taxes on them led to economic stagnation.”