Locks, Water Levels and Globalisation, from Nigel Davies
There's a metaphor that keeps popping into my head whenever I think about markets these days. It's that of a lock, the device for raising and lowering boats between stretches of water of different levels on river and canal waterways.
Now suppose that thus far the world economy has thus far been a system of canals and waterways which has thus far functioned via locks. And what if globalisation is breaking this down so that the economic streams have started growing beyond limiting pathways. What would be the effects?
It seems to me that the waters must burst out of the canals and then level off, meaning that the geographic disparities in land values, currency and wages will gradually erode. Such an outcome would seem to be a very positive one in the long run, but meanwhile we've got a lot of flood water to mop up.