Bretton Woods Second Globalisation

In the UK, the most advanced country of the period, the change of direction of economic policy was clearly signalled by the repeal in 1846 of the Corn Laws adopted in 1815 to protect domestic landowners’ interests by imposing restrictions and tariffs on imported grains. In the same period, the UK started to sign free-trade agreements with other countries. However, this process of transition to free trade was limited and short-lived: “even though we think of the nineteenth century as an era of free trade, Britain is the only large economy that maintained open trade policies for any length of time. The United States put up very steep tariffs on manufactured imports during the Civil War and kept them high throughout the century. The major continental

The differences between the two sub-periods of the Second Globalisation is highly significant and will be at the centre of the analysis pursued in the rest of the book. The second part of the book will focus on the Nneoliberal era, namely on the development trajectory starting from the crisis of the Bretton Woods era and lasting up to now. Here we anticipate just a few broad differences that distinguish these two phases of the Second Globalisation from the preceding phases and one from the other.

The world that emerged after World War II was committed to free trade much more than during the first surge of globalisation. We can see two main reasons behind the unprecedented success of free trade: (a) the conviction that the alternative instruments of competition between countries (such as colonialism and imperialism), massively deployed during the first globalisation, would lead to new devastating wars; (b) the growing influence acquired by economics that had succeeded to coalesce a widespread consensus on the desirability of free markets and free

Many distinguished economists have often repeated this opinion. Gregory Mankiw, for example, asserted in his popular blog that ″few propositions command as much consensus among professional economists as that open world trade increases economic growth and raises living standards.″ (Mankiw 2006). A host of surveys and polls confirms this opinion. For example in a 2006 survey of American economists (83 responders), "“87.5 % agree that the U.S. should eliminate remaining tariffs and other barriers to trade"” and "“90.1 % disagree with the suggestion that the U.S. should restrict employers from outsourcing work to foreign countries.".” (Whaples