The objective of this paper seeks to summarize Nayyar’s article on globalisation as it relates to the history and development of two epochs and through further analysis determine how far ‘deglobalisation’ has reached after the 2008 recession and crisis.
The subject of globalisation and its impact on development is approached from a historical perspective. By comparing the first era of globalization (1870-1914) to a modern present day version (1970-2000) Nayyar demonstrates the similarities and differences that occurred in both epochs and further examines the implications of this process both in the past and in the present as it includes three main characteristics, increases in international trade, investment and finance.
Nayyar defines globalisation as a “deepening economic integration in the world economy” and is cautious to advise that this process is neither symmetrical nor new.
Paradoxically he points out that whilst globalisation in the new era advocates free trade, this freedom is limited to the flow of goods and services whilst restricting the movement in labour.
The period 1870-1914 was a true era of free trade, where the dominant ideology was economic liberalism. This was an era of rapid growth in international trade, finance and investment where statistics showed that Western Europe was the engine of this growth. In theory it was believed that trade liberalization was the sole variable responsible for the expansion in international trade. Nayyar points out that the increase in international trade was more the result of a strategy to increase trade between the developing world and the developed world than trade liberalization. Likewise international investment expanded rapidly between 1870 and 1914. This investment formed a significant part of the output for the developing and industrializing world and was a source of income for the net