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In the 1990s, globalisation was often characterised as inevitable and irreversible. Politicians like Bill Clinton and Tony Blair saw it as the unstoppable wave of the future and sought to ride it for all it was worth. Today that sense of inevitability has been cast into doubt, and the question being asked is whether our own era of globalisation could soon be undone, just as a remarkable earlier era of economic integration across political borders at the turn of the 20th century—which also affected trade, migration and investment—came unstuck during the era of the two world wars.
In the United States presidential campaign, Donald Trump’s pledge to resist new trade deals and renounce existing ones has forced Hillary Clinton, as a rear-guard electoral action, to reverse her previous support for the Trans-Pacific Partnership trade agreement. The victory of “Leave” in the British referendum on European Union membership is likewise held up as foretelling the end of 21st-century globalisation. “Brexit,” the former World Bank economist Homi Kharas lamented in Newsweek, “represents the first tangible retreat from globalisation in my lifetime.”
In this view, Brexit is a manifestation of a mounting backlash against ever-deeper international entanglements in general, not just entanglements with the EU. It reflects the sense that, with all the dismantling of national economic controls, and the ceding of power over trade and the like to global bodies such as the World Trade Organisation (WTO) the nation state has fundamentally lost control of its destiny, surrendering to anonymous global forces. And what is true of Britain is true of other countries such as France, Germany and Sweden, where the ultra-right Front National, the anti-euro Alternative für Deutschland (Alternative for Germany, or AfD) and the anti-immigrant Sweden Democrats are all capitalising on the same populist, nationalist, and anti-globalisation sentiment. Their growing support is cited as evidence that globalisation is poised to shift into reverse.
One reason for taking these predictions with a pinch of salt is that we have heard them before. In 2002, the economic historian Harold James published The End of Globalization, in which he pointed to the collapse of international trade and payments in the 1930s and warned that the same could happen again. In 2005, Niall Ferguson argued in…