For a less literary take we can turn to the International Monetary Fund's Anne Krueger, who said in a 2002 speech given in Melbourne:

The phrase "emerging market" only came into common use in the 1980s, but capital flows into developing countries of course have a much longer history. Stock markets were operating in Turkey by 1866, India by 1875, and Brazil by 1877. Widespread sovereign borrowing--in the sense that we think of it now--got under way in the late eighteenth century, when the spread of constitutional forms of government led to more stable nation-states that recognized continuing liabilities to lenders....

International flows of investment capital were particularly robust in the late nineteenth and early twentieth centuries, against a backdrop of free trade and exchange rates fixed under the gold standard. Indeed, flows to developing countries were larger in relation to the world economy during this first "golden age" of financial globalization than they are today. Here in Australia, capital flows financed half of all domestic investment in the late 1880s.

Or, in the words of James Petras: "From the 15th to the 19th century Latin America's external trade and investment had greater significance than in the 20th century. Similarly, one-third of English capital formation in the 17th century was based on the international slave trade." Capitalism was relentlessly global until World War I; the 1920s effort to restore the old order failed miserably in 1929. Capitalism's retreat to national economies and trading blocs was a sign of crisis. At the end of World War II, one of capital's main tasks was to restructure the international monetary system, and Washington laid great emphasis on getting the world trading system going again. A return to economic health required that the global mechanisms be restored.

Globalization is thought to be the source of many economic ills. Is it? We First Worlders have to be very careful when complaining about its pressure on living standards, since the initial European rise to wealth depended largely on the colonies, and we still derive benefit from cheap labor and cheap resources. It's embarrassing to hear echoes of Pat Buchanan in the complaints by Ralph Nader and his associates that NAFTA and the World Trade Organization threaten US sovereignty. Washington has abused the sovereignty of scores of nations over the decades.

I won't deny that plant relocations to Mexico have put a sharp squeeze on US employment and earnings, or that the threat of those things has reduced workers' bargaining power. But how much has this contributed to downward mobility and increasing stress? Econometricians say that trade explains about 20-25 percent of the decline in the US real hourly wage during the 1970s and '80s. While not insignificant, that still leaves 75-80 percent to be explained, and the main culprits there are mainly of domestic origin. And why, if globalization was so decisively immiserating, did the real hourly wage rise after 1995, reversing a two-decade slide, even as NAFTA took effect and trade penetration increased?

An important reason that trade doesn't explain more of our economic history since the early 1970s is that 80 percent of us work in services--and a quarter of those in government--which are insulated from international competition. What did "globalization" have to do with Teddy Kennedy and Jimmy Carter's transport deregulation, or with Reagan's firing of the air traffic controllers, or with Clinton's signing of the welfare bill? What does "globalization" have to do with tuition increases at public universities or attacks on affirmative action? While lots of people blame corporate downsizings on globalization, the more powerful influences were Wall Street portfolio managers, who are always demanding higher profits.

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