The prisoner's dilemma on a global scale

In an article published inNew York TimesLast week, Alexandra Stevenson referred to a second "China shock." The first, two decades ago, corresponded to the displacement of a significant portion of production from European and American factories to Chinese industries. Now, the measures promoted by the Trump administration are leading China to increase exports to developing countries in order to sustain economic growth based on a huge trade surplus. Herein lies the second "China shock": the destruction of these countries' own industrial fabric, with Chinese factories in places like Vietnam and Indonesia, where social unrest is growing. This runaway and out-of-control dynamic is a consequence of the lack of minimal global governance. Countries can decide on the level of state control over economic activity. However, on a global scale,TrumpismIt is eliminating the few globally agreed-upon regulatory mechanisms, and the world is drifting toward a rampant liberalism dominated by immediate profit and a prisoner's dilemma-like scenario: each player seeks only to maximize their own gain, regardless of the others. In this situation, the dominant strategy is betrayal, so the only possible equilibrium is for all players to betray. A bleak future awaits us if we continue down this path.