"It is late 20-century conceit that we invented the global economy just yesterday. We read stories about Boeing dueling with Airbus, Japanese investors buying New York real estate, BMW opening a plant in South Carolina, or world stock market quivering on news from Europe; and we image that we live in an unprecedented global village. Surely our great-grand-fathers could not have conceived of a world grown so small!
And yet a century ago Chicago meatpackers were acutely aware of their competition with New Zealand. The railroads that converged on the city, bring beef and wheat destined for Europe markets, were largely built with European capital-indeed, on the eve of the First World War Great Britain's overseas investments were larger than its domestic capital stock, a record no major country has ever come close to matching since.
The chemical companies that provided old Chicago with dyes for its fabrics and asprin for its headaches were primarily headquarters in Germany. And the Chicago futures market was every bit as sensitive to news of droughts in the Ukraine and frost in Brazil as it is today.
To be sure, international money transfers took a few hours instead of a millisecond, and one did not decide to make an overnight trip to Buenos Aires on two days' notice. In terms of the serious substance of economic affairs, however, Chicago 1894 was arguably as much a part of a global market as Los Angeles today.
We all know modern technologies are what make a truly global economy possible; but it turns out that the key enabling technologies were the steam engine and the telegraph."
Paul Krugman on Globalization 10/25/2008 00:40
"It is a little known but startling fact that the world trade as a share of world production did not return to its 1913 level until about 1970; it is even more startling that net international flows of capital (as opposed to complex financial operations that do not finance real investment) were a considerably larger share of world savings in the years preceding Wold War I than they have been even in the "emerging market" boom of the last few years. Surely everyone who thinks about it is aware that for all our current hysteria, international migration was far larger in an era that could actually build the Statue of Liberty to welcome immigrants than it has ever been since."
xiaoqiang at 10/25/2008 00:48
cathy2thousand at 10/25/2008 23:36
xiaoqiang at 10/25/2008 23:48