The Great Rewiring
History isn’t a straight line. It’s a volatile cycle of booms, busts, and forced reboots. Here is the operating system for the next decade.
History has a way of looking like a straight line when viewed from the rearview mirror. We tend to view globalization as an inevitable, linear march toward a singular, borderless economy. It is a comforting narrative. It suggests that despite the noise, the signal always points toward integration.
If you look closer at the data, however, the story changes.
The process of binding nations together isn’t a steady climb. It is a volatile cycle of booms and busts, a series of aggressive expansions followed by violent contractions. We are currently living through one of those contractions.
To understand where the “Business Rockstars” of the next decade will find their footing, we must understand the mechanics of this machine. We have to look at the three pivotal eras of integration: the initial explosion before World War I, the constrained rebuild after 1945, and the hyper-globalization that defined the turn of the millennium.
This isn’t just history. It is the operating system of our current reality, and right now, that system is undergoing a forced reboot.
1.0 The Beta Version: The First Wave and the Crash (1870–1914)
In the late 19th century, the world experienced a level of capital integration that wouldn’t be matched until the 1980s. This was the first great startup phase of the global economy.
Technology was the driver. The steamship and the railway collapsed physical distance, while the transatlantic telegraph cable, completed in 1866, collapsed temporal distance. Suddenly, prices in London and New York could converge in near real-time.
During this era, capital had no passport. Titans like J.P. Morgan moved money across oceans with a freedom that modern compliance officers would find terrifying. Britain financed railways in Latin America; France underwrote the economic expansion of Russia.
The movement of people was equally staggering. Between 1901 and 1910, nearly 11% of the Italian population and 8% of Norwegians emigrated. They moved from labor-rich Europe to the labor-scarce New World, seeking a better return on their sweat equity in a massive, unregulated labor arbitrage.
Success, however, was the system’s undoing. This rapid integration disrupted power structures. New industrial titans like Germany and the United States began to challenge the Pax Britannica. The elites of the Old World, facing rising unrest from a newly formed urban working class, used nationalism as a distraction from domestic inequality. It worked too well.
The system didn’t just stop; it shattered. The outbreak of World War I proved that economic interdependence is not a guarantee of peace. It can be the very friction that sparks the fire. The resulting thirty years of war and depression served as a brutal lesson in the dangers of unmanaged entanglement.
2.0 The Firewalled Rebuild (1945–1980s)
When the architects of the post-war order gathered at Bretton Woods to rebuild, they didn’t want to restore the old open-source version of the world. They were haunted by the chaos of the interwar years. They wanted a walled garden.
The new consensus was that volatile, short-term capital flows had exacerbated the Great Depression. So, they caged the beast. Under this new regime, international finance was “severely controlled.” The goal was domestic stability first, global integration second.
The focus shifted entirely to the movement of physical goods. Through the General Agreement on Tariffs and Trade (GATT), tariffs on manufactured goods were slashed to an average of 4%, fueling a postwar industrial boom.
This era defined the “company man.” Because capital was relatively immobile, corporations invested heavily in their domestic workforce and infrastructure. It was a deliberate, managed integration. Yet, like all contained systems, the pressure eventually found a leak. By the 1970s, the fixed exchange rates broke, inflation surged, and the capital controls began to dissolve, setting the stage for a massive deregulation.
3.0 Hyper-Globalization: The Supply Chain Revolution (1990–2008)
This is the era most of us recognize. It was defined by a confluence of revolutionary technological change and historic geopolitical shifts.
The rise of the internet collapsed communication costs, making it virtually free to coordinate complex activities at a distance. Simultaneously, the end of the Cold War and the entry of China, India, and the former Soviet Union into the global market effectively doubled the world’s supply of workers from 1.5 billion to 3 billion.
This was the “second unbundling.” Corporations like Apple and Nike didn’t just sell abroad; they manufactured the very concept of the “Global Factory.” Production was fragmented into sprawling Global Value Chains (GVCs). The iPhone became the ultimate symbol of this era: designed in California, using microchips from Taiwan and Korea, displays from Japan, and assembled by hundreds of thousands of workers in China.
To understand the physical reality of this era, we have to look at the unsung hero of globalization: the standard shipping container. It turned the chaotic, dockside business of break-bulk shipping into a streamlined, intermodal science.
We saw a massive shift in value appropriation. Corporate profits in the US as a share of national income rose from 7% in 2001 to 13% by 2006. The efficiency was brutal, lifting millions out of poverty in Asia while simultaneously leading to wage stagnation for blue-collar workers in the West. The gains were privatized, while the social costs were socialized.
4.0 The Glitch: The Great Slowdown and Backlash (Post-2008)
The narrative that globalization was unstoppable hit a concrete wall in 2008.
The global financial crisis originated not in a developing backwater, but in the heart of the liberal financial order. It was the first body blow. Banks, once the arteries of global finance, retreated behind national borders to lick their wounds.
Then came the political backlash. For years, economists argued that free trade was a net positive and that the “winners” could compensate the “losers.” The data tells a different story. Economists David Autor, David Dorn, and Gordon Hanson documented the “China Shock,” revealing that American communities most exposed to Chinese manufacturing imports saw substantial, lasting job losses and depressed wages. The compensation never arrived.
By 2016, the consensus had fractured. The election of Donald Trump and the Brexit vote were not random anomalies. They were the market correcting itself against an establishment that had ignored the localized trauma of hyper-efficiency.
The political upheaval of the last decade wasn’t just about culture; it was rooted in profound economic displacement that the established models failed to predict.
The final knockout punch was COVID-19. The pandemic didn’t just pause trade; it exposed the terrifying fragility of “just-in-time” inventory systems optimized for cost above all else. In April 2020, Mexican car exports plummeted by 90% because parts couldn’t cross the border. We entered the era of “Slowbalisation,” where cross-border investment and trade stagnated relative to GDP.
5.0 Homeland Economics: The New Operating System
We have now entered a new paradigm. The global operating system has shifted its primary objective function from Efficiency to Resilience and Security.
This is the era of “Homeland Economics.”
Governments are no longer leaving markets to their own devices. They are aggressively intervening to merge national security with economic policy. We see this in the massive industrial subsidies of America’s CHIPS and Science Act and the Inflation Reduction Act, which pour billions into domestic manufacturing.
The goal is to bring strategic industries home, or at least to friendly shores (”friend-shoring”). Intel is building massive foundries in Ohio; auto giants like Ford and GM are scrambling to build domestic battery supply chains to qualify for federal credits. The logic of the boardroom has changed. Executives are no longer praised for shaving a cent off the supply chain if it exposes the company to geopolitical blackmail. The new strategy is “just-in-case” rather than “just-in-time,” even if it means higher costs for consumers.
This is a fractured world. The global economy is splitting into rival blocs. On one side are democratic allies trying to rewire their supply chains; on the other is an autocratic bloc led by China and Russia that has grown significantly in economic power since the end of the Cold War.
The battleground for this new economic war isn’t just steel or soybeans. It is computing power. The fight for semiconductor supremacy perfectly encapsulates the shift toward Homeland Economics, where technological dominance is seen as existential.
6.0 Conclusion: Navigating the Rocky Landscape
The history of globalization teaches us that these backlashes are not bugs in the system; they are features. The cycle of integration inevitably generates the tensions that lead to its own reversal.
The danger we face now is not a complete return to the autarky of the 1930s. The world is too digitally and financially entwined for a total divorce. The danger is the entrenchment of a meaner, less efficient, and more expensive world order.
“Homeland Economics” is a massive gamble. It promises security through redundancy, but it guarantees higher prices and slower innovation. As nations build new tariff walls and subsidy regimes, we risk creating a zero-sum game where countries fight over pieces of a shrinking pie rather than cooperating to bake a bigger one.
For the entrepreneurs and leaders navigating this landscape, the lesson is clear. The era of easy, frictionless global scaling is over. The new winners won’t just be the most efficient; they will be the most politically astute, capable of navigating a world defined by borders, tariffs, and geopolitical friction.
The world isn’t flat anymore. It’s rocky, and you had better have the right gear to climb it.
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