The Great Convergence: Information Technology and the New Globalisation, by Richard Baldwin

What does the domestication of the camel tell us about the economic dynamics of globalisation? You’re doubtless there already, but your assumptions will be confirmed by The Great Convergence, in which economist Richard Baldwin argues that it was one of the key factors in the growth of international trade about 1,000 BC, facilitating the transport of goods made in one place to be sold in another. Other similarly decisive innovations or events over the millennia have included refinements in sailing technology and improved coastal access; the Black Death, which shocked Western Europe out of its moribund rural feudal equilibrium in the 14th century; the end of the Napoleonic Wars in the 19th century and of the two world wars in the 20th, with peace a major enabler of trade; and, more recently, tariff liberalisation driven by the International Monetary Fund, and the deregulation of foreign direct investment.

This is by no means an exhaustive list, of course, of the factors promoting globalised trade through the ages, but it gives you some sense of the ambitious historical sweep of Baldwin’s book. In this congenial volume, he adroitly covers 200,000 years of human trading practices, deploying insights from archaeology, anthropology, climate science, economic history, political science, development studies and other disciplines as he goes. He takes us on a journey from the ancient world to the 21st century, and from the global North to the developing South, in order to set the scene for the past 25 years of globalisation.

This recent period, Baldwin argues, has been largely positive for those developing countries able to participate in global value chains – in other words, to compete in particular areas of component supply to international markets. Their participation has been hugely facilitated by developments in information and communication technologies, which, like the domesticated camel, have abolished a major obstacle to global trade, namely the previously high cost of transmitting information and communicating ideas and knowledge over distances.

Baldwin is an enthusiastic proponent of what he sees as the merits of contemporary globalisation. He concludes that what he calls “New Globalisation” brings with it the know-how and good jobs that eluded developing countries in earlier phases of globalisation. However, there has been massive social fallout associated with globalisation to date. Rust Belt unemployment is one social cost. Those who still have work – even skilled creatives and knowledge workers, perhaps including you – are increasingly forced into precarious and low-paid contracts. This is one aspect of online outsourcing that Baldwin argues will be ramped up through developments in “remote intelligence” in the years to come. Finally, the populist and nationalist politics that have recently emerged in the industrialised world reflect the huge anxieties of those excluded from the spoils of globalisation.

Baldwin acknowledges some of these uncomfortable developments, but only in passing. He argues that a new social contract will be essential to protect those worst affected by globalisation, and proposes a radical rethink of industrial, training and skills policies. However, given the austerity through which many of us are now living, there seems to be little prospect of, for example, stronger social welfare protection in the Atlantic or European economies; in fact, quite the reverse.

Juliet Webster is visiting senior fellow in media and communications, London School of Economics, and visiting professor in the Internet Interdisciplinary Institute, Open University of Catalunya, Spain. She is co-editor, with Keith Randle, of Virtual Workers and the Global Labour Market (2016).

The Great Convergence: Information Technology and the New Globalization
By Richard Baldwin
Harvard University Press, 344pp, £22.95
ISBN 9780674660489
Published 24 November 2016