The Past Speaks

by Kevin Hjortshøj O’Rourke

I’m sharing the abstract of an important new paper.

The paper surveys three economic history literatures that can speak to contemporary challenges to globalization: the literature on the antiglobalization backlash of the nineteenth century, focused largely on trade and migration; the literature on the Great Depression, focused largely on capital flows, the gold standard, and protectionism; and the literature on trade and warfare.

This new working paper deals with a really important issue. Especially since 2016, the term de-globalization has entered common currency, and not just in the financial press. I’ve seen this term being used by banking executives who are trying to make sense of the current state of the world’s political and economic system. In fact, I see evidence that the growing belief among executives that significant de-globalization is imminent has influenced the strategies of important firms such as HSBC and Barclays. For that reason, I think that the key sentence in O’Rourke’s paper is this:

just as economic historians’ first instinct was to try to temper some of the ‘globaloney’ of the 1990s (Susan Strange 1998), so their first task today should perhaps be to calm talk of the imminent demise of globalization. 

O’Rourke’s paper makes very effective use of the extant literature in cycles of globalization and deglobalization in economic history, but unfortunately the author has overlooked the relevant literature in business history, the parallel body of research done by scholars in management scholars. In particular, O’Rourke’s paper could have been improved had the author looked at an edited collection that appeared a couple of years ago called  The Impact of the First World War on International Business Strategy. The papers in the collection, which were mostly firm-level studies, supported the thesis that the First World War, which is commonly seen as inaugurating a de-globalization phase in world economic history,  merely changed the nature of globalization by forcing multinational firms to adopt different organizational forms.