It’s easy to make light of the horsemeat fiasco: I thought the 3.30 at Haydock Park was a race, but it turns out to have been a menu. But it has a serious side, in that it highlights a danger of a globalised economy.
One effect of companies outsourcing their supplies overseas has been the creation of long international supply chains: the horsemeat sold by French firm Spanghero passed through more of Europe than Phileas Fogg. Such supply chains are, however, difficult for managers to oversee fully, leaving them vulnerable to errors and fraud.
One effect of this affair, therefore, might be that food retailers and manufacturers shorten their supply chains to make them more manageable. Insofar as they do so, the increased globalisation we've seen since the 1970s will go into reverse.
In truth, this is already happening. In the US, several manufacturers such as General Electric and Apple, have started to deglobalise, shifting production from China back to the US. One reason for this has been concern over the quality of Chinese production, and fears that their goods are being copied illegally.
The difficulty of managing global supply chains is, however, only one force tending to reverse globalisation. There are others.
■ Credit constraints. International trade needs financing, not least because overseas customers tend to be even tardier payers than domestic ones. It's for this reason that one effect of 2008's financial crisis was a slump in world trade. Companies' fears that credit lines might be cut, even if they are currently available, thus tends to deter them from seeking new export markets.
■ Volatility. Although exchange rates have been relatively stable recently, this might not last. Talk of "currency wars" - even if overblown - introduce more uncertainty for exporters and importers. This too threatens to deter the search for new export markets and overseas suppliers.
■ The home bias. Recessions, Harvard University's Ben Friedman has shown, tend to make us less tolerant. You might be able to put up with an Indian call-centre in good times, when you think that globalisation is making us all better off. But in bad times you regard it as a threat to British jobs. And episodes such as the horsemeat affair have only increased distrust of foreign practices. Even if companies wanted to offshore, therefore, doing so will meet increased customer resistance.
In saying all this, I'm not doing mere futurology, but describing existing trends. Figures from the OECD show that globalisation is already slowing down. It estimates that import penetration in developed economies - the share of imports in total final spending - rose from 13.4 to 21.4 per cent between 1993 and 2007 - a rise of 0.5 percentage points each year. But in the five years since then, it has risen a mere half percentage point, to 21.9 per cent.
It's in this context that we should regard the announcement of talks to create fully free trade between the US and EU. The proposals represent not so much an effort to increase globalisation, but to offset the pressures for deglobalisation.
You might wonder whether this is just airy-fairy bigthink waffle of the sort investors can ignore. It's not. To see why, imagine what would happen if you had to become self-sufficient like Tom and Barbara Good in the 1970s. You'd struggle to achieve subsistence, because you lack the farming and weaving skills to feed and clothe yourself. And as for electricity… You're much better off 'exporting' the skills you have to your employer and importing food, clothes, electricity and much else. "The greatest improvement in the productive powers of labour," said Adam Smith in the first paragraph of the Wealth of Nations, "seem to have been the effects of the division of labour".
What's true for individuals is true for countries. Just as the division of labour between you and the farmer raises both your living standards, so too does the division of labour between countries.
It's for this reason that EU and US officials hope that lower trade barriers between the two regions will boost incomes. Research by Harvard University's Marc Melitz has shown how. When trade barriers come down, he says, exporting companies expand while domestic companies competing with imports tend to contract. But because exporters tend to be more productive - they have to be to compete against overseas firms - the result is an increase in aggregate productivity, which means higher incomes for all.
But there's an obvious counterpart to this. If globalisation slows - as it has done - the increase in the division of labour slows down and this tends to retard productivity growth.
To put this another way, the discovery that globalised supply chains are not as efficient as we thought means that global productivity cannot grow as quickly as hoped. The "abrupt and substantial reassessment of future economic prospects" described by Sir Mervyn King isn't wholly due to the financial crisis, but to a realisation that globalisation has its limits.
It is, therefore, no accident at all that the slowdown in globalisation has come at a time when labour productivity growth has slowed down - and not just in the UK.
And this has direct implications for asset allocation. As I've said, stagnating productivity is a big reason why index-linked gilt yields are negative - not least because the absence of productivity growth depresses growth expectations and hence equity valuations. If a slowdown in globalisation continues to retard productivity, it will therefore help to keep index-linked yields and share valuations low. In this sense, equity investors and future buyers of annuities should hope that globalisation does resume. Those horseburgers you've been eating might not have affected your health, but they could affect your wealth.
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Chris blogs at http://stumblingandmumbling.typepad.com