In this interview with LSE Review of Books Managing Editor Anna D’Alton, Ben Chu discusses his new book, Exile Economics. The concept captures the turn away from globalisation and towards protectionism and self-sufficiency prevalent in the past decade, particularly associated with Donald Trump’s trade policies. Exploring how the shocks of the pandemic and Russia’s invasion of Ukraine impacted key goods like food and energy, Chu interrogates the viability of self-sufficiency in practice. His research reveals that the interdependence of globalised trade is more complex to unpick than protectionist political rhetoric would have us believe.

Exile Economics: What Happens if Globalisation Fails. Ben Chu. John Murray Press. 2025.

How do you define exile economics? Is it a new phenomenon? 

I was trying to find a phrase which encapsulated the currents in policymaking globally from the past 10 years in countries like the United States, China, India and to some extent countries in Europe, too. And there were three main currents. First, a denial of the reality of interdependence between nations. Second, the downgrading of the importance of multilateral collaboration and cooperation between nation states. And third, a striving for greater national economic self-sufficiency. 

I brought these together under one umbrella and called it exile economics, and thought, let’s try and kick the tyres of it as a concept. Importantly, exile economics isn’t the same as deglobalisation, which involves simply reversing globalisation. Exile economics instead purports to build something which is more progressive, to deliver more security and more prosperity. It aims to be something better than globalisation. The book looks at whether the promise of exile economics, and its exponents will actually deliver on this, or not. 

What factors or circumstances have caused this move towards exile economics? 

There’s been a degree of disenchantment with globalisation for quite a long time. In the US and Europe, it probably goes back to the deindustrialisation of the 1980s. But it really took off after the global financial crisis in 2008-9, where people felt vulnerable because of global interdependencies and interconnections and experienced stagnating or declining living standards. 

More recently, two big global shocks which have people feel vulnerable in a globalised economy: the pandemic in 2020, followed by the global energy crisis in 2022, which pushed up oil and gas prices and contributed to an inflationary shock in most of the world. The impact of those two events on supply chains made people feel globalisation has delivered insecurity rather than security, a cost-of-living shock rather than the prosperity that was promised. Now, there are problems with both of those interpretations, and I talk about them in the book. It’s that combination of events that have prompted people to consider whether there’s an alternative out there to the globalised economy we’ve had for the past 70-80 years.

You examine different commodities, how they’re produced and traded, how they’re impacted by global shocks, and nations’ desires for self-sufficiency on key goods. An example from the book is wheat, a staple food. How was its availability impacted by Russia’s invasion of Ukraine in 2022, and how did nations respond to shortages? 

Ukraine is a huge wheat producer. Russia and Ukraine together provide most of the grain that countries in the Middle East and Africa import, for example, 90 per cent of Egypt’s wheat. Russia’s invasion of Ukraine meant those wheat supplies couldn’t get out of the Black Sea, and this put a rocket under global wheat prices. In the early stages of the war, it went up to about $450 a tonne for wheat, when before it had been only $300 a tonne, and many countries, fearing a global supply problem, panicked and started curbing their own wheat exports. Other countries put export controls on fertiliser as well. The lesson many countries drew from this is that it’s dangerous to be reliant on other countries for food imports, and there were calls in many countries for more self-sufficiency in food. Farmers strongly supported this idea too, because it’s obviously in their interest to get more subsidies and have more local production rather than competition from imports. 

When it was invaded by Russia in 2022, Ukraine couldn’t harvest the ample grain it produces – they had to rely on the World Food Programme to feed their own people. It shows that even if a nation produces all its own food, it could be hit by a shock.

But this a dangerously misleading lesson to draw about the about the supposed security provided by self-sufficiency in food. For a start, it’s simply not feasible for every country to do this. There’s a study from 2020 which shows that if you were to draw a hundred-kilometre circle around everyone in the planet, only 25 percent of the world’s population could feed themselves with staple foods produced within that boundary. On average, the circle would have to be 2,000 kilometres in radius to supply staple foods to everyone. That tells you that if you’re going to feed the planet, trade in food is essential. 

The second point is that Ukraine itself demonstrates why relying on domestic production does not guarantee a secure food supply. When it was invaded by Russia in 2022, Ukraine couldn’t harvest the ample grain it produces – they had to rely on the World Food Programme to feed their own people. It shows that even if a nation produces all its own food, it could be hit by a shock. It could therefore be beneficial to have imports coming in as an alternative. 

Turning to energy, another major fallout of Russia’s invasion, how did nations respond to the energy shocks? For example, what happened with policy on renewables, China’s push to invest in them and the effect of this on the global market? 

Global oil and gas prices went through the roof in 2022, and similar to the approach to food, many countries (especially in Europe) felt, we shouldn’t be reliant on other countries for our energy imports. In particular, we shouldn’t rely on an “enemy” country like Russia because we are at their mercy if they want to turn off the gas tap. This had a beneficial effect because it led to a big increase in investment in renewable energy, which a lot of politicians argued, reasonably, we have more control over. Plus, it dovetails well with the imperative of decarbonisation. 

There’s a very clear trade-off there between timely decarbonisation and self-sufficiency in renewable energy.

However, like with food, there is a false impression of self-sufficiency when it comes to renewables, because, of course, those renewable technologies often need to be imported from other countries like China, which is by far the world’s biggest supplier of solar panels. In theory, you could roll out solar energy production in Europe to make states there more self-sufficient, but it’s not realistic to have the entire supply chain in Europe given the amount of critical minerals which go into them, which are dispersed right across the planet. And crucially, China is the world’s biggest supplier of solar panels, it has such a head start in their production, and in other green technologies like electric vehicles, batteries and wind turbines. 

So, there’s a very clear trade-off there between timely decarbonisation and self-sufficiency. The other point is that self-sufficiency is going to be extremely expensive, and countries and populations will bear the cost of it. The energy shocks revealed a fragility in the public consensus in favour of decarbonisation because of the costs to households and businesses. Politicians have to be very careful about adding to that cost instead of choosing to import the technologies. 

Something you discuss in the book is that the political rhetoric – including phrases like “energy independence” and “food self-sufficiency” – makes things seem simple. But this masks the complexity of the entanglement between nations, which comes through in your case studies. Why do you think there is this gap between rhetoric and reality? 

One issue is that politicians and populations have quite an outdated view of trade. You often hear discussion of trade as if it’s all in finished goods. But 50 per cent of traded goods are intermediates, parts that go into making other goods which are sent across borders to be finished. To take the car industry as one example, when Donald Trump declared he would impose 25 per cent tariffs on Canada and Mexico, the car industry pointed out that actually a single component can cross the borders between Mexico, Canada and the US about eight times in the assembly of a single vehicle. If you’re going to tax it at 25 per cent every time it enters the US, that will have a catastrophic impact on the supply chain and the final price of that vehicle. 

The more I studied the practicalities of exile economics, the clearer it became that it was a false promise. 

I think there’s a real challenge to put across the complexity of these networks. Many of us think, why can’t we just produce vital things like food, energy or medicines domestically – even if there’s a cost, surely it’s bearable and ultimately worth it for the security? The reality is a lot more complicated, and the trade-offs a lot greater than people realise. 

You ultimately conclude that exile economics won’t deliver on this promise of prosperity or security that politicians would have people believe. What do you think is the best alternative strategy for nations to protect themselves against shocks 

I should say that I started out the book with an open mind. I saw the downsides to globalisation and the fragilities in supply chains that the global shocks of 2020 and 2022 exposed. I, like many others, thought maybe there could be a case for, if not deglobalisation, perhaps a downgrading of the level of interconnection between countries. But the more I studied the practicalities of exile economics, the clearer it became that it was a false promise. 

That said, there are other ways for nations to make themselves more secure in a globalised economy without retreating behind fortresses and trade barriers. I came up with three recommendations. First, nations should map supply chains a lot more comprehensively than they have in the past. Simply knowing where the vulnerabilities are is crucial. We saw that in the pandemic, where it wasn’t clear previously A, how import-reliant countries were for things like masks and personal protective equipment (PPE) and B, where these items were coming from. If we’d known that, we would have been much better prepared for the shock. 

If countries redistribute their reliance over more countries, it will make them more secure and resilient to future shocks.

The second recommendation is stockpiling. To look again at the pandemic, if nations like the UK had had larger stocks of masks, vital medicines and PPE, they would have been much more secure in the crisis. Stockpiles went out of fashion in the globalised economy because they have a cost to them. But I think that is a cost worth paying, because it protects against crises. 

The third point is diversification. To look again at Egypt’s overreliance on Russia and Ukraine for their wheat before the invasion, there are other wheat producers like France, the US, Australia. If governments like Egypt had worked with the private sector to diversify their wheat sources, their food supplies wouldn’t have been under such catastrophic pressure in 2022. If countries redistribute their reliance over more countries, it will make them more secure and resilient to future shocks.

Each of these recommendations enables resilience while remaining open to the global economy. 

But protectionism is still very much around, as Donald Trump’s actions since taking up office for the second time have demonstrated. What way do you see things going in terms of nations’ trade policy, either towards or away from exile economics? 

What I’ve seen since Trump came to power and threatened to put on his extreme tariffs is not the retaliatory measures in response, or the general collapse in trade we thought might happen. It’s an encouraging sign that even though the US is trying to excise itself from the global economy, other countries are not following suit. As we’ve seen with the new trade deal between the UK and India, or between the European Union and Latin American, nations and trading blocs are saying, we still see the benefits of globalised trade, and we’re even going to deepen international ties. So, there are signs that the show will stay on the road. 

Another hopeful sign is that, even if the global goods trade doesn’t become more liberalised, there’s a strong chance that the exchange of data and services across borders will continue. It’s much more efficient to tap into the global labour supply through Global Capability Centres. These are essentially firms in countries like India and Bangladesh which provide digital back-office services to Western multinationals. Maybe that’s what will keep trade flowing, albeit in a slightly different form. 

I can’t tell you what the future will bring – I can only outline certain possibilities, which range from the catastrophic to the relatively hopeful.

Note: This interview gives the views of the author and not the position of the LSE Review of Books blog, nor of the London School of Economics and Political Science.

Ben Chu will speak about the book at a public event at LSE on Wednesday 9 July, Exile economics – what happens when globalisation fails.

Image: Me dia on Shutterstock.

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