Fri Aug 15th, 2008 at 05:18:48 AM EST
Paul Krugman reminds us, in his NYT Op-ed, that globalization is not a new phenomenon: there was a previous era of world free trade from the late nineteenth century to World War One.
Op-Ed Columnist - The Great Illusion - Op-Ed - NYTimes.com
If you’re wondering what I’m talking about, here’s what you need to know: our grandfathers lived in a world of largely self-sufficient, inward-looking national economies — but our great-great grandfathers lived, as we do, in a world of large-scale international trade and investment, a world destroyed by nationalism.
Writing in 1919, the great British economist John Maynard Keynes described the world economy as it was on the eve of World War I. “The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth ... he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world.”
And Keynes’s Londoner “regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement ... The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion ... appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalization of which was nearly complete in practice.”
Then came war, depression, more war. Krugman highlights recent food market problems and "protectionist" reactions to them as one possible sign of a crumbling of current globalization (he doesn't mention, though he could, the recent collapse of the Doha Round at the WTO). Then he says:
And now comes “militarism and imperialism.” By itself, as I said, the war in Georgia isn’t that big a deal economically. But it does mark the end of the Pax Americana — the era in which the United States more or less maintained a monopoly on the use of military force. And that raises some real questions about the future of globalization.
Right, wrong? Good thing, bad thing?