Stresses of Globalization (rerun)

Unfortunately in the year XXXX the whole world was one large international workshop. A strike in the Argentine was apt to cause suffering in Berlin. A raise in the price of certain raw materials in London might spell disaster to tens of thousands of long-suffering Chinese coolies who had never even heard of the existence of the big city on the Thames. The invention of some obscure Privat-Dozent in a third-rate German university would often force dozens of Chilean banks to close their doors, while bad management on the part of an old commercial house in Gothenburg might deprive hundreds of little boys and girls in Australia of a chance to go to college.

Except for the archaic language, this might be a contemporary description of the risks and stresses of our increasingly-interconnected world. It is actually a passage from Hendrik Willem Van Loon’s book The Story of Mankind, published in 1921.

The date that appears in place of XXXX is 1914.

(I posted the above in 2008…today’s market action, combined with various ongoing political crises, suggested that this might be an appropriate time to repost it)

4 thoughts on “Stresses of Globalization (rerun)”

  1. So true. I have just read Niall Ferguson’s “THE ASCENT OF MONEY.”
    His history of finance shows financial crises happening over and over down through time. Always the same thing. Too much of a good thing, especially with borrowed money and asset bubbles. It’s human nature to overdo it I guess.

  2. The economic panics and depressions that happened before World War I were absolutely devastating. Only the unmatched awfulness of the Great Depression makes us forget what rough sledding it was.

  3. The panic that led to the great depression was no worse than any of the other cyclic panics that affected American economic life before it. What turned it into the depression was the government response started by Hoover and tripled down on by Roosevelt, with the addition of a vastly expanded government regulatory apparatus to put icing on the cake.

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