The coronavirus pandemic — yes, they’ve finally called it that — is the latest challenge to globalization. Perhaps even the final one.

The widening scope of lockdowns and restrictions on travel and local movement — all to contain the virus — have delivered a rare and empirically interesting sucker punch to both supply and demand in the world’s economy. Because Chinese workers were unable to report to work, global supply chains have everywhere been disrupted. Meanwhile the world’s buyers (many of whom are the Chinese themselves but now the rest of the world as well) are immobilized by quarantines and their take-home pay decimated by illness or enforced idleness. Result: shops closed, zombie airplanes flying empty, and the opening of Mulan postponed. Both supply and demand shocks — but especially their still unknown duration — have cut drastically into expected future earnings of companies and caused an epic rout in the stock markets. The Wall Street collapse will in turn have the expected wealth effects on the heavily stock-invested US consumer, further worsening the blow to consumer spending and to firms’ profits. The last Jenga block to be pulled out may be a crisis of the financial system and seizing up of lending. Huwág sana (Let us hope not).

All this is happening when interest rates are still at all-time lows (even negative) and most governments are already running large deficits. Only imagine: you’ve pushed the gas pedal down to the floor but the engine is still stalling. With any luck, the world may yet see its worst recession since 2008-2009. (The direction of impact for the Philippines was ably tackled earlier in this column by colleague Romy Bernardo — I would only revise the size of the hit — so we can skip that exercise.)

But taking a longer and more reflective view (easy to do when stuck in community quarantine), the larger question is whether this coronavirus crisis is the watershed moment (or not) that finally ends the globalization trend that powered many of the world’s economies into greater or lesser wealth since the late 1960s. Beginning with the Kennedy Round of GATT, that trend probably reached its peak with the formation of the European Single Market with its audacious attempt at open borders for goods, services, capital, and, most of all, people. All of which seems long ago and far away. The exuberant picture of young people cheering atop the Berlin Wall as it fell contrasts sharply with the dystopian images of our time: masked men in hazmat suits spraying the deserted streets of Wuhan and flying drones barking warnings at stray elderly citizens to stay indoors.

This pandemic is itself an offshoot of globalization. The ease, speed, and low cost of travel that facilitated the spread of the virus are shining achievements of technological innovation and economic efficiency. The liberal movement of persons across and within borders is a concomitant of a frenetic search for bigger markets — for tourists, students, workers, and new business — as well as evidence of newfound prosperity among a rising global middle class. In an interesting negative feedback loop, however, a consequence of globalization is itself threatening globalization.

At the very least, the current crisis exposes the vulnerability of modern patterns of production and consumption based on scale and cost. A fundamental rethinking may be in order. Global supply chains have hitherto achieved the highest productivity and profits based on an extreme degree of specialization, concentration in the cheapest locations, intensive resource-use, and just-in-time deliveries founded on efficient logistics. But firms must now consider that easy profit must be balanced against resilience in such systems amidst the uncertainty “black swan” events such as pandemics, natural calamities, terror events, and political upheavals. Firms, for example, may increasingly have to maintain redundant capacity and excess inventories and diversify suppliers, all of which impact profits. After this major supply disruption, Taiwan’s Foxconn (the supplier of Apple among others) will doubtless speed up its plans to diversify out of China (sorry, to Indonesia, not the Philippines). Even Trump’s red-in-the-face demands for re- and onshoring of services and manufacturing may find a more favorable response.

Similarly, the viability of consumption patterns based on simultaneous mass consumption may be due for a re-examination. The vivid example is the cruise liner industry and mass tourism more generally. “Overtourism” was already a problem even before the coronavirus struck. Giant cruise ships were already being banned from the Venetian Lagoon, and destinations from Amsterdam to Bhutan to Yosemite were already imposing taxes on short-term tourists or severely limiting visitor numbers. The continuing flight of empty planes (emitting huge amounts of greenhouse gases in the process) in the midst of the pandemic also speaks to a deeper irrationality not easily captured in a company’s bottom line. The serious spread of infection during pandemics and the growth of human activity beyond the carrying capacity of natural environments will put question marks on the indefinite growth of such industries. For both production and consumption, the larger question is whether the human footprint has not already become too large in its present form for the natural and cultural environment to accommodate. If we cannot cut off our toes, should we at least change our shoes?

But the further threat to globalization from this crisis is not just economic but also political, particularly if the US suffers another deep recession that causes it to withdraw further from a rules-based political and economic order.

The bald fact is all hitherto known episodes of expanding trade, travel, and exchange of knowledge and culture have been associated with great-power dominance: Pax Romana (27 BCE–14 CE), Pax Britannica (1815-1914), and Pax Americana (1949-?). (Some scholars also recognize a Pax Mongolica (1200s-1300s) for Asia. In all these past periods, some hegemonic power always provided a guarantee of international order and stability (no matter how skewed in its favor) that left just enough room for some lesser countries and peoples to insert themselves in crannies of economic prosperity and intellectual flowering. In their turn and under various hegemons, America, Germany, Japan, Korea, and the NIEs, and now China have all historically benefited from this externality. Nor is the principle anything new: order and security promote exchange; greater exchange promotes specialization and productivity (Douglass North meets Adam Smith).

A significant difference in our time, however, is that the position of the current hegemon is under threat with no replacement in sight (Pax Sinica still exists only in a mayor’s dreams). For all the Trumpian bluster, the fact is America has been on its back foot since at least the Great Recession — its finances precarious, its social consensus fractured, and its foreign stance diffident. “America first” and MAGA are not the rants of a kingpin; they are pleas of the beleaguered. Rather than standing behind a rules-based order where it can prosper from a position of strength along with others, the US has withdrawn from its treaty obligations (e.g., on climate, human rights, defense), waged trade wars and imposed sanctions solely on its account, and half-folded its deterrent umbrella. This has de-legitimized international and multilateral organizations and provided an opening for demagogues, tin pot tyrants, and plain terrorists to hatch their own plans to disrupt or withdraw from the discipline of international rules in order to victimize their own peoples. In a remarkable example of unintended consequences, it was the halfhearted US intervention in Syria and Libya that caused the surge of immigration of refugees into Europe which in turn provided the opening for racist and nationalist movements to arise in many countries — in the UK most notably leading to Brexit. The same hegemonic equivocation or absence permitted Russia’s annexation of Crimea and China’s occupation of Panatag. The result overall has been an environment of greater uncertainty in security, trade, investment, and migration.

With a global recession now in the offing, with a likely further weakening and self-absorption of the current hegemon, and patterns of production and consumption under question, globalization at the moment must be adjudged a PUM (persons under monitoring). Self-quarantine will be the metaphor for the fate of countries that must survive without the benefit of international rules of conduct.

Emmanuel S. de Dios is professor emeritus at the University of the Philippines School of Economics.