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

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  • Thomas I. Palley

Abstract

The conventional wisdom is 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 underway. This paper challenges that view and argues 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 the analytical implications of the three globalization hypothesis. The Victorian first globalization and 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 gains from the third globalization.

Suggested Citation

  • Thomas I. Palley, 2018. "Three globalizations, not two: Rethinking the history and economics of trade and globalization," FMM Working Paper 18-2018, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  • Handle: RePEc:imk:fmmpap:18-2018
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    References listed on IDEAS

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    1. Marc J. Melitz & Daniel Trefler, 2012. "Gains from Trade When Firms Matter," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 91-118, Spring.
    2. Allen, Robert C., 2011. "Global Economic History: A Very Short Introduction," OUP Catalogue, Oxford University Press, number 9780199596652.
    3. Daron Acemoglu & James A. Robinson, 2013. "Economics versus Politics: Pitfalls of Policy Advice," Journal of Economic Perspectives, American Economic Association, vol. 27(2), pages 173-192, Spring.
    4. Kalina Manova & Zhiwei Zhang, 2008. "China's exporters and importers: firms, products, and trade partners," Working Paper Series 2008-28, Federal Reserve Bank of San Francisco, revised 2008.
    5. Thomas Palley, 1998. "Macroeconomics with Conflict and Income Distribution," Review of Political Economy, Taylor & Francis Journals, vol. 10(3), pages 329-342.
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    Cited by:

    1. Albertina Dias, 2019. "Perspectives on the New Silk Road and World Dynamics," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 7(3), pages 15-21.

    More about this item

    Keywords

    Globalization; trade theory; barge economics.;

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F10 - International Economics - - Trade - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General

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