Wednesday, December 7, 2016

"To properly understand globalization, you need to start 200,000 years ago...."

From Quartz:

Brace yourself: the most disruptive phase of globalization is just beginning
To properly understand globalization, you need to start 200,000 years ago.
Richard Baldwin skillfully takes on this daunting task in a new book, starting all the way back with the hunter-gatherers. For too long, he says, traditional analysis of trade has been too narrow, he argues.

The economist, who is a professor at the Graduate Institute in Geneva and president of the Centre for Economic Policy Research (CEPR) in London, has been researching globalization and trade for 30 years. As anti-globalization forces now sweep across the world, The Global Convergence: Information Technology and the New Globalization (Harvard University Press) is well timed.

Baldwin argues that globalization takes shape in three distinct stages: the ability to move goods, then ideas, and finally people. Since the early 19th century, the cost of the first two has fallen dramatically, spurring the surge in international trade that is now a feature of the modern global economy.
The standard line from politicians in recent times is that everyone wins from globalization. But the backlash from low-skilled workers who lost their jobs to cheaper labor abroad has forced a change in tone.

Mark Carney, the governor of the Bank of England, gave a candid speech on globalization in northwest England this week, where unemployment is among the highest in the country. He said:
Amongst economists, a belief in free trade is totemic. But, while trade makes countries better off, it does not raise all boats… the benefits from trade are unequally spread across individuals and time....