The Two Faces of Globalization: Against Globalization as We Know it

30 Pages Posted: 15 Aug 2002

See all articles by Branko Milanovic

Branko Milanovic

World Bank - Development Research Group (DECRG); University of Maryland

Date Written: April 2002

Abstract

The paper shows that the current view of globalization as an automatic and benign force is seriously flawed. It is mistaken because it focuses on only one, positive, face of globalization while entirely neglecting a malignant one. The two key historical episodes that are adduced by the supporters of the "globalization as it is" (the Halcyon days of the 1870-1913, and the record of the last two decades of development) are shown to be misinterpreted. The "Halcyon days" were never Halcyon for those who were "globalized" through colonization since colonial constraints prevented them from industrializing. And they were even less "Halcyon" for those who were taken into slavery. Even among the Western economies, the 19th century globalization, contrary to some views, failed to bring income convergence. The record of the last two decades (1978-1998) is shown to be uniformly worse than that of the previous two (1960-78). It is thus only by a serious misreading of the recent evidence that the partisans of globalization are able to argue for its unmitigated beneficence. Should globalization be abandoned and everyone retire behind protective national walls? Absolutely not. But globalization led by capitalist interests alone is likely, akin to what it accomplished a century ago, to produce a wild global capitalism with social exclusion, unbridled competition and exploitation. Global capitalism needs to be "civilized" in the same way that national capitalisms of the 19th century were "civilized" after World War II-period which then witnessed the fastest growth in history. Yet the civilizing role cannot be done by individual states, but, because of the global nature of capitalism, by global institutions.

Keywords: globalization, inequality, world economic history

JEL Classification: F02, 015, N30

Suggested Citation

Milanovic, Branko, The Two Faces of Globalization: Against Globalization as We Know it (April 2002). Available at SSRN: https://ssrn.com/abstract=320287 or http://dx.doi.org/10.2139/ssrn.320287

Branko Milanovic (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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HOME PAGE: http://econ.worldbank.org/staff/bmilanovic

University of Maryland ( email )

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