End of Globalization

"Globalization" is here. Signified by an increasingly close economic interconnection that has led to profound political and social change around the world, the process seems irreversible. In this book, however, Harold James provides a sobering historical perspective, exploring the circumstances in which the globally integrated world of an earlier era broke down under the pressure of unexpected events. James examines one of the great historical nightmares of the twentieth century: the collapse of globalism in the Great Depression. Analyzing this collapse in terms of three main components of global economics--capital flows, trade, and international migration--James argues that it was not simply a consequence of the strains of World War I but resulted from the interplay of resentments against all these elements of mobility, as well as from the policies and institutions designed to assuage the threats of globalism. Could it happen again? There are significant parallels today: highly integrated systems are inherently vulnerable to collapse, and world financial markets are vulnerable and unstable. While James does not foresee another Great Depression, his book provides a cautionary tale in which institutions meant to save the world from the consequences of globalization--think WTO and IMF, in our own time--ended by destroying both prosperity and peace.

This is a carefully crafted book on a topical subject. The scholarship is first rate. James demonstrates why he is rightly regarded as the leading historian of the political economy of the interwar period., This book is a major contribution to the field of international economic history. It gives us some very powerful insights on the effects of globalization on institution building and destruction. It also provides very detailed and valuable information on the deglobalization experiences of many countries in the interwar period with respect to the breakdown of the financial system and the backlash on international trade and migration., James argues that the Great Depression was the result in part of the failure of three institutions that had evolved to handle the consequences of an increasingly globalized world: tariff systems, central banks, and immigration legislation. James also detects modern-day parallels in the popular backlash against the World Trade Organization and NAFTA, the collapse of long-term capital management, and the meltdown of Asian economies. Though he does not foresee another depression, James does warn that another reverse of the pendulum might today threaten both peace and prosperity., Harold James points out one of the more amusing side effects of downturns through history--the countervailing boom in articles about economic crises. His own thesis is less doom-laden than the title suggests, but he points out some telling parallels. The Great Depression ended a long period during which the nineteenth-century technologies of rail, steam, and telegraphy integrated the world's economies as never before., Globalization is a hot topic today, and the backlash against the increasing internationalization manifested in protests at recent meetings of the World Trade Organization has attracted considerable public attention. Globalization is not, however, a new phenomenon. The late 19th century saw a pronounced movement toward increased international economic integration. This earlier era of globalization came to a dramatic end during the Great Depression of the 1930s. James explores the history of this earlier episode of globalization to identify lessons for our own age. The core of the book tells the story of the interwar financial crisis and the resulting depression and then traces the paths through which the collapse of monetary and financial institutions led to trade and immigration restrictions and an increased emphasis on national economic policies...[James] provides a clear and accessible version of this story and explicitly focuses on the lessons it offers for the present.

Harold James is the Claude and Lore Kelly Professor in European Studies and Professor of History and International Affairs at Princeton University.