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World Economy

Globalization past and future

One of the alarming features of the current crisis is that way in which the short run protectionist pressures it is giving rise to are being superimposed upon longer run pressures that having been undermining support for globalization for some time — in particular, the feeling that it is harming poorer workers in richer countries. Equally alarming is the fact that all this is happening at the start of a century which will be marked by a shifting geopolitical equilibrium — which is always risky — and by renewed concerns about resource scarcity — which is riskier yet.

An essay just published by Bruegel tries to provide some historical context for all of this. Anyone interested in learning more can read this book.

2 replies on “Globalization past and future”

Kevin, timely and though-provoking essay. It is a call to arms for vigilance against crisis-inspired protectionism. The longer-term pressures on the liberal economic order you describe mean that any backsliding will be hard to reverse.

It will be interesting to see what course Obama will choose. I sense he is a instinctive multilateralist. But he faces a sceptical democratic party and country. Should he spend political capital fighting for multilateralism — the new trade round, more influence by developing countries in the IFIs, cooperation on climate change — or save it for putting out inevitable protectionist fires like the Buy American provisions?

But is there any real controversy about the claim that globalisation is “harming poorer workers in richer countries”, at least in relative terms, and at least from time to time in absolute terms ?

Overall, everyone gains, but there is a noticeable skewing of the gains towards those with greater endowments of skill. They, or I should say “we”, also pay less of the costs.

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