The key theme of the book is that globalisation increases systemic risk - the type of risk that occurs when systems are highly inter-connected and which results from the complexity of those systems. A good summary of their narrative comes at the start of the concluding chapter:
The complexity of the world that we have built may well have escaped our models and cognitive abilities. We are overloading the global networks; we are stretching their capacity beyond what prudence recommends, and - as we have shown - too often we neglect the accumulation of a large variety of risks and the geographical concentration of activities in a small number of pivotal nodes.Goldin and Mariathasan illustrate their theme with examples from the financial sector, global supply chains, infrastructure, the environment, global health, and inequality. Only the last of these seemed to me to be a little forced, and there was a certain overlap between their views and Rodrik's, especially in terms of the financial sector.
My main takeaway from the book was the increased vulnerability of global systems to risk, with this vulnerability arising because of a lack of diversification. One of the principles of finance is diversification in order to deal with risk, and most (if not all) of the examples in the book illustrate how as societies we have reduced our diversification, relying on monocultures of certain plants and concentrated land use, lean management practices, supply chains that rely heavily on individual suppliers, financial institutions that have become 'too big to fail', and so on. We have ignored the necessity to plan for low-probability events. As Goldin and Mariathasan write:
The general problem seems to be that our current institutions fail to be prepared for the fact that "low risk is not no risk".This is a real problem, as we have seen time and again in recent years. However, while Goldin and Mariathasan despair about the short-term decision-making of managers and policy makers, they ignore the role of customers, shareholders, and taxpayers in shaping that decision-making. It is difficult for managers to build additional redundancy into their global supply chains, when that redundancy comes at additional cost and would either impose higher costs on customers (at which point, other firms that avoid those costs would be at an advantage) or lower returns for shareholders (who should be focused on long-term returns, but in the real world are not). Similarly, it is difficult for policy makers to advocate for increasing spending on infrastructure repair when that would require higher taxes (and we've been seeing the result of that in New Zealand this week). These are challenges that no amount of lessons from the past will help us deal with - we, as customers, shareholders, and voters, need to be willing to accept higher prices, lower dividends, and higher taxes, if we really want to mitigate these systemic risks and develop a "resilient globalisation".
Overall, it is a good book. It doesn't contain much that will be new to readers who have been awake to the consequences of globalisation, but the academic links are important and the overall theme is too.