Global Capitalism: Its Fall And Rise In The Twentieth Century Paperback – Mar 27 2007
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Frieden, an academic, traces the history of globalization from the late 1800s to the present, telling us, "Global economy and culture form a nearly seamless web in which the national boundaries are increasingly irrelevant to trade, investment, finance and other economic activity." Globalization is a choice formed by politics and policy decisions. It is now considered the norm, a fact of life that will continue. However, the author points out that this was also true from the end of the 1800s to 1914 and the start of World War I. The foundations of preexisting global economic order disintegrated, reemerging in the 1970s but not thriving until the 1990s. International integration usually expands economic opportunities and benefits society, but global capitalism, which does not address those ill-treated by world markets (e.g., the unemployed, the poor, children and the elderly), has driven societies toward conflict and class warfare. This is an excellent, readable history of globalization with important lessons for our society today. Mary Whaley
Copyright © American Library Association. All rights reserved --This text refers to an out of print or unavailable edition of this title.
“Frieden has a wonderful way of weaving together politics and economics, past and present in an accessible narrative that is...even-handed and objective.” — Washington Post
“This is an excellent, readable history of globalization with important lessons for our society.” — Booklist
“An economic history of the twentieth century that makes the whole thing come alive.” — David Warsh (economicprinciples.com)
“Broad and ambitious in its sweep.... One lesson with enormous contemporary resonance emerges: globalization is neither inevitable nor irreversible. Governments can choose to retreat into isolation and have often done so.” — Alan Beattie (FTmagazine)
“Essential reading for anyone who wants to understand the history of globalization from 1870 to the present.” — John Bruton (Irish Independent)
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The first era of globalization (1870 to 1914) had many of the same characteristics as today's. There was an unprecedented cross-border movement of goods, capital, and labor. (Labor more so in the first era.) During these years huge amounts of capital moved overseas to America, Canada, and Argentina mainly due to the reduced costs of communication and transportation. The technologies driving this globalization were the telegraph and railroads. It was also facilitated by the fact that most currencies were convertible to gold. The investment in the Americas was also followed by a huge immigrant population. In these years, America, Canada, and Argentina had much larger immmigrant populations at the turn of the 20th century than today.
The main thing that distinguishes the present globalization from the first is what happened in between. After the Great Depression and World War II remedies were put into place to mitigate the damaging effects of these economic and social catastrophes. Social benefits such as unions, minimum wage, healthcare and pensions were established as safety nets. In the era between the two globalizations when economies were mostly national the safety nets were part of the social contract between capital and labor.
In 1980, when our current era of globalization begins, capital began to move overseas again in order to find countries with lower labor and social costs. This time, however, labor did not follow. The industrialized countries now have large middle classes with social benefits promised who are not certain about how they are going to be paid. This is causing many in the industrialized world to have second thoughts about our current phase of globalization.
Frieden has a guarded optimism about global capitalism and thinks it is still the best system for distributing wealth. Yet, his last chapter "Global Capitalism Troubled" points to some more clouds on the horizon. There seems to be a growing gap between those who control capital and those who work for a living. People understand that globalization is inevitable but they want a new set of rules to address the growing inequalities.
Frieden is a cheerleader for a more equitable capitalism that can deliver both social benefits and robust economic growth.
However, I came across the book at my library and gave it a chance, and I was not disappointed. It is a book that does a creditable job of summing up the ups and downs of the world economy over the past hundred years and more. And it also does a fairly good job of raising some issues and problems with the world economic system, and how the system had evolved to meet those issues and problems. On the whole, I think it's a balanced book, pointing out the critical need for free and integrated markets to raising millions in the world out of poverty, as well as some of the problems facing them.
The only reason why I gave the book a four rather than a five is that it is not an easy read, and it is best read with some thought and analysis on the reader's part. Not necessarily a bad thing, but not something for everyone.
By the way, do ignore those reviews that pretend to tell you what the author was saying in his book. I'm not sure that he's actually saying what they say he is saying.
Read the book for yourself. It's worth the time and effort.
The strength of the book is that it mentions every event of consequence, most of them in passing. A reader can sense the inevitable buildup of economic and political pressures, and watch them explode one by one. That America allows itself to be drawn into the morass, time after time, is testament to the linguistic capabilities of our well heeled charlatans, toadying academics and ignoramus politicians, who always manage to capture the public forum, and who continue to retain it even after the latest disaster which ought to have made even them consider reality just this once. Don't hold your breath. For those for whom globalization pays it pays really well. Until the rest of us digest the lessons of books like this one, the music can be expected to continue as more and more chairs are drawn away.
Professor Frieden displays respectable academic virtues and remains even handed toward the concerns of both rich and poor. You won't get a radical suggestion out of him. It is tempting to suggest that America should turn its back on the global economy, and put its population to work here at home making what we need. It is more tempting to suggest that the beneficiaries of global money flows should be taxed progressively (and then some), that banks should be returned to productive lending and broken into manageable pieces, that large corporations should be progressively taxed on their capitalizations rather than on what they choose to report as earnings, and that land should be taxed at its unimproved value instead of under the conventional method which endlessly rewards those whose ancestors grabbed it first (and a succession of buccaneer tycoons shrewd enough to bamboozle the bankers who allow them one way options to step into inheritor shoes). All of these gestures would help and none of them is likely to be tried, at least until things become dramatically worse. The only certainty is that our present course is not going to work, but at least many of us will have plenty of time to become experts in economic history. They say it helps to understand why one is being $crewed.
Between 1914 and 1945 there was a period of greatly reduced international investment, due originally to the First World War and then to the Depression and Second World War. The 1920s were a period in which some nations tried to restore the pre-war conditions, but failed. The Depression reduced trade and economic growth directly, thus discouraging investment, and in addition goverments often took protectionist measures or instituted controls on foreign investment which further reduced investment. After the Second World War the Bretton Woods system increased international trade, but still allowed for controls on investment. Additionally, many poorer nations took up a strategy of import substitution, which was not compatible with much international investment, although foreign direct investment often still took place. Finally, it took about 15-20 years for investors to associate international investment with potential profits rather than probable disaster.
The 1970s were an unpleasant period of transition.
The author, a Harvard professor, writes clearly and I enjoyed the book.
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