's colleague.
Frederic Mishkin’s The Next Great Globalization is a book that I started reading recently.
Murray Rothbard’s books that I have read do an excellent job of describing how international division of labour is broken up by economic nationalism. From a historical perspective, legal tender laws, competing currency devaluations, currency conversion controls, and other such measures have played their own part in making people across nations much poorer and their production costlier and less efficient.
The aforementioned policies are still just marginal hindrances, and to an extent, cross-border business activity in regions far apart have existed since time immemorial, despite the arbitrary rules of any regime, Roman, Arab, Persian, or otherwise. Freedom of international business is a matter of degree, as are all matters of freedom of business.
On a very rough level I would have guessed that the world as a whole is just as protectionist and restricted as it was one hundred years ago, two hundreds year ago, or before. Only in different ways or means, some new and some old.
From Mishkin’s book, there was a new perspective I got. I did not know this, but it might be an important fact.
There has been a de-globalization tendency in the 20th century, and we are far less globalized than we once used to be.
What the Far Right and the Far Left consider a new-age disruption of nation-states with a sudden torrent of globalization in recent times is actually the opposite. We had far far more freedom of international business back in the 19th century than we do now. A man on a good high paying factory wage could pick up his phone, and order from a catalog, products from all over the world, including Indian tea to sip at home. He could contact the local bank, and ask for his funds to be invested in municipal and corporate bonds in Argentina, Canada, Japan, or Ghana. He had virtually immediate access to global commodity and financial markets. This was the European story, while even protectionist America had great access to international financial markets, such as the corporate bonds that built its infrastructure.
It’s not some “neoliberal shock doctrine” that was imposed on people in recent times. It’s just that the post-WWI wave of economic nationalism - caused by a tremendous friction between nations that had just been at war - had been pushing forward for decades, but just got slowed down enough today now and then due to genuine practical reasons. All in all, the trend is only towards nationalism, not freedom of business, and any minor concession that goes against today’s ultranationalism is called globalization.
Obviously, we might be back (and a little ahead) of where we should have been. But think that even now, Indian consumers buy expensive consumer goods from racks with few available items of few brands. Foreign investment is not allowed in the retail sector here.