Three globalizations, not two: rethinking the history and economics of trade and globalization

Thomas Palley

European Journal of Economics and Economic Policies: Intervention, 2018, vol. 15, issue 2, 174-192

Abstract: The conventional wisdom is that there have been two globalizations in the modern era. The first began around 1870 and ended in 1914. The second began in 1945 and is still under way. This paper challenges that view and argues that there have been three globalizations, not two. The first half of the paper provides empirical evidence for the three-globalizations hypothesis. The second half discusses its analytical implications. The Victorian first globalization and the Keynesian-era second globalization were driven by gains from trade, and those gains increased industrialized country real wages. The neoliberal third globalization has been driven by industrial reorganization motivated by distributional conflict. Trade theory does not explain the third globalization; capital’s share has increased at the expense of labor’s; and there can be no presumption of mutually beneficial country gains from the third globalization.

Keywords: globalization; trade theory; barge economics (search for similar items in EconPapers)
JEL-codes: F00 F10 F20 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (7)

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Working Paper: Three globalizations, not two: Rethinking the history and economics of trade and globalization (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:elg:ejeepi:v:15:y:2018:i:2:p174-192

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