THIEL GETS IT RIGHT “I would bet on globalization slowly being in abeyance,” tec

THIEL GETS IT RIGHT

“I would bet on globalization slowly being in abeyance,” tech entrepreneur Peter Thiel said in a video interview with George Mason University economist Tyler Cowen. “I think with the benefit of hindsight, we will realize that 2007 was not just the peak year of the finance boom, but also the peak year of globalization, like maybe 1913.”

His reference to 1913 was surely meant to be — and should be — chilling. That was the last full year before the outbreak of World War I, a conflict in which about 16 million people died. In its wake, Communists took over Russia and Hitler took over Germany. The war made the world safe not for democracy, as Woodrow Wilson had hoped, but for totalitarianism.

The globalization resulting largely from British policies — free trade, the gold standard — was not re-established after World War I. Instead, trade protectionism and unstable currencies led to the Great Depression.

World trade fell about 90 percent between 1929-33, as shown in the famous spiral graph in MIT economist Charles P. Kindleberger’s classic The World in Depression 1929-1939. The result was not, as current critics of globalization might suggest, good for the workingman. It was economic disaster, political instability and World War II, in which about 60 million people died.