Honorary Professor, Chinese Academy of Sciences

This paper discusses today’s growing protectionism using a framework for thinking about economic growth, trade, and capital flows drawn from the natural sciences. In this framework economic activity is viewed as transformations of energy—both current solar energy and vintage solar energy, stored in the form of natural resources, human capital, physical capital and technology—driven by the laws of thermodynamics. The paper explains why efficient global capital markets and high-speed communications networks accelerate global economic growth. It then uses recent developments in nonequilibrium thermodynamics (NET) to outline the link between rapid growth, accelerating trade and cross-country capital flows, and turbulence, in the form of protectionism. Finally, it discusses an approach for mitigating the harmful impact of unavoidable turbulence and protectionism on the global economy