Avoiding Autarky

WITH THE INTERNATIONAL ECONOMIC ORDER APPARENTLY CRUMBLING, it may seem increasingly sensible for individual countries to adopt protectionist policies. But the effects of climate change, the erosion of national corporate tax bases, and the splintering of global supply chains mean that the world really needs more economic cooperation—not less. The question then, is how.

There are three areas ripe for coordination. First, governments could strengthen their collaboration on international taxation. For example, they could agree to tax consumption rather than production, which would allow citizens to benefit from taxes emanating from economic activity in their country, instead of the current system, which allows companies to pay minimal taxes only where they manufacture goods—an increasingly unsatisfactory method in a digital world. Second, companies could strengthen their efforts to create a circular, or “regenerative,” economy that