1. The Weight of the Past ix
2. The Industrial Counterrevolution 1
3. Centralization versus Uncertainty 16
4. From World Economy to World War 38
5. Twilight of the Idols 61
6. The Dead Hand 86
7. Hollow Capitalism 119
8. The Rule of Lawlessness 137
9. Unpeaceful Coexistence 162
10. Recasting the Safety Net 189
11. Liberalization by Fits and Starts 215
""compelling...excellent"". (The Wall Street Journal, April 4, 2002)
GLOBALISATION is often described as an irresistible new force that, depending on your perspective, will either wreck or save the planet. Brink Lindsey provides an eloquent, much needed corrective by putting international integration into historical context.
Mr Lindsey points out that today's period of globalisation has a precursor in the free markets and economic integration of the mid-19th century. That early bout, however, was cruelly interrupted by what Mr Lindsey calls the industrial counter-revolution: an enthusiasm for collectivism, for national economic planning, and, in its most extreme cases, for communist economies. For much of the 20th century, the invisible hand of the market gave way, he writes, to the dead hand of the state.
That changed when large parts of the world emerged from communism and statism. But the process is far from finished. With his stories from the Russian steel mills of Magnitogorsk to backyard makers of ""boogis"" (bare-boned home-made vehicles) in India, Mr Lindsey explains how the effects of state ownership, price controls, trade barriers and other leftovers from the statist era still grossly impede the global economy.
He regards the failings attributed to globalisation (the financial crises of the late 1990s, for instance) as the result of a collision between markets and statism. Yes, globalisation has been unstable. The cause is less market liberalisation as such than the fact that the liberalisation remains incomplete. At times Mr Lindsey's faith in the market may be extreme, but mostly this book is full of elegantly argued good sense. (The Economist, May 2, 2002)
""...Brink Lindsey provides an eloquent, much needed corrective by putting international integration into historical context...full of elegantly argued good sense..."" (The Economist, 3 May 2002)
""...should be required reading for professional eceonomists..."" (City to Cities, June 2002)
Brink Lindsey's Against the Dead Hand: The Uncertain Struggle for Global Capitalism (John Wiley & Sons, 2001) is the most intellectually stimulating of all the recent books on globalization. Lindsey articulates a fervent defense of open markets at the same time he poses serious concerns about their future. Director of the libertarian Cato Institute's Center for Trade Policy Studies, a Washington think tank, Lindsey worries that too many people assume that the continuation of globalization is inevitable. He instead believes that globalization is in its infancy and will be threatened by a series of childhood maladies that could include national and regional financial crises, protectionist backlashes, and antiglobalization political movements.
Lindsey recasts the history of trade and commerce over the past 150 years in a highly original way that will intrigue anyone involved in international business. His thesis is that the first great wave of globalization, which lasted until World War I, arose both because of the strength of the intellectual argument in its favor and because of the technological innovations of the Industrial Revolution. But as early as the 1880s, he finds the beginnings of what he calls ""the Industrial Counterrevolution."" Starting with the writings of Karl Marx and the rise of German state socialism under Otto von Bismarck, the political opposition to free trade and globalization mounted in the late 19th and early 20th centuries, taking the form of protectionism, imperialism, and militarism.
It all culminated in World War I, which, Lindsey writes, ""provided both the means and motive for the collectivist spasm that followed."" In the social and economic chaos that gripped the world from the start of World War I to the end of World War II, the earlier progress toward globalization, writes Lindsey, ""was interrupted, its achievements demolished.""
In his view, the creation of the modern multilateral financial institutions of the international economy in the postwar years, along with the championing of free trade by the United States, slowly recreated the conditions that enable globalization, but it was a long road back. Lindsey notes that world merchandise trade as a percentage of world output has been estimated at 11.9 percent in 1913 - a level of export performance that wasn't matched again until the 1970s. And still, the ideas and movements that produced the Industrial Counterrevolution live on, he says, to distort and frustrate the world's economic development. This is the ""dead hand"" of his title.
Most of the ills commonly blamed on globalization, he argues, are caused by ""the continued bulking presence of antimarket policies and institutions"" in many of the developing and emerging market countries. The real blame for Russia's problems, for instance, should be placed on such matters as the efforts of its federal and regional governments to prop up moribund industrial enterprises from the Communist era. Such explicit subsidies, the author notes, have been as high as 8 to 10 percent of GDP in recent years. Allover the Third World, protectionism is still strong, with tariff rates averaging 13.3 percent in developing countries, compared with rates of 2.6 percent in the industrialized nations.
Yet Lindsey concludes Against the Dead Hand optimistically: ""For a century the world was enthralled by the false promises of the Industrial Counterrevolution; the chains of misplaced faith have now been broken, and the revival of globalization is one consequence. The present era, uncertain and trying as it sometimes may be, is thus a time of deliverance. Furthermore, there is good reason to believe that we are on our way to somewhere better."" (Strategy+Business, Issue 29, Fourth Quarter 2002)
""...the most intellectually stimulating of all the recent books on globalizatin..."" (Strategy & Business, December 2002)
""...the most enthralling work of economic history I've ever read."" —Gene Epstein's ""Economic Beat"" (Barron's, July 7, 2003)