Three Monkeys Online

A Curious, Alternative Magazine

Nothing New – Globalization, Economics, and the 19th Century

Just as the 60's generation erroneously thought they had discovered sex, the 90's generation could be forgiven for thinking that it discovered globalisation. The media have embraced the word, and it's vaguest of vague concepts, to the point that it's become a shorthand for almost anything and everything to do with international trade. At the same time, economists such as Professor Kevin O'Rourke from Trinity College Dublin, have been studying international trade throughout history, and would argue that in fact many of the effects and implications of what we term globalisation are far from new.

How do you define ‘Globalisation’? It's a word that confuses and means many things to many people.

I prefer not to use it, even though I do use it. My intellectual position is that it's not a terribly useful word because Trade for example is something that can be analysed. It can have a particular effect on some countries, and a different effect on others. You can't even generalise about the effects of trade on countries. If you think of one country, trade might effect it one way, migration may effect it a completely different way, and capital flows a completely different way again. So to make things concrete, the immigration of unskilled workers will have one effect on the income distribution of a rich country: if a lot of unskilled workers enter a country, you can assume that that will have a negative effect for native unskilled workers. But if you think of the immigration of skilled workers into the same economy, it will have a very different effect. So just looking at the economic variables trade, migration, capital flows, they all have different effects. So if you broaden it out even further, you're left with, analytically, a not very useful concept.

And yet, it's hard to describe the phenomena without using the word. You've pointed out that, though you dislike the word, it's one you use.

It's a shorthand. But when you actually analyse, you have to look at things like the effect of trade on country A or country B, the effects of migration separately, the effects of capital flows separately. That's the only way you can make sense of it.

As a non-economist, one of the points that interested me, reading your work, is this idea that while ‘Globalisation’ is portrayed by many as a new phenomena, it is in fact nothing of the sort. Arguments can be made that from the time of Colombus we've had it, or certainly, as you've argued, since the early 19th century.

It depends on how you define the term, and what effects you think about. If you think for example of potatoes, they had a huge effect on Ireland, and they were first imported from America. You can think of infectious diseases that crossed both ways with the discovery of America. If you think of the transfer of technology, these are things that have been going on for a very long time. The element of Globalisation that I, and my co-authors, have been interested in is trade, and the effects of trade on income distribution. We've argued that, if that's the focus, Globalisation is only sufficiently well advanced from the 19th Century to have those sorts of effects. Up until then transport costs were too high: with the lowering of transport costs you had an increase in the trade of grain, iron and steel between continents – an increase that could effect farmers and workers in one continent or the other. So from the 19th century onwards you can see that for example the life of a peasant in Russia is affected by trade policy in Britain. That dimension of Globalisation, the movement of goods and peoples between continents, and subsequent effects on the day to day lives of people is purely from the 19th Century onwards.

In lots of ways that 19th century world was as well integrated as our own today. If you look at labour markets it was probably better integrated than today, because there are so many restrictions on immigration in richer countries now, that didn't exist back then. It follows on then from that that if the 19th century was as well integrated as our own now, and we've had increases in integration in the last few decades, it means that there was a disintegration at some point – and that's precisely what happened in the interwar period. Globalisation therefore is not only not new, but it's also not irreversible.

That's an interesting point, particularly at the moment. We had a move away from economic integration and Globalisation, in the wake of the first world war. At the moment, we seem to be in another epoch making era, with the war on terrorism and the war in Iraq. Is there the possibility or the likelihood of these events changing the course of economic integration?

Well, the most plausible effect we're going to see is an effect on the movement of labour. We know already that the States are tightening up on visa conditions and security – so if you're a young scientist from the Arab World for example, you're going to find it very difficult to go and train in the States, and that will have some effect. I can't really see it leading to trade wars on the other hand, or affecting flows of capital. It's true in general that political tensions aren't good for integration. If you think of the Cold War, that cut off a whole section of Eastern Europe from the rest of the world for half a century: Geo Politics certainly does have an effect.

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