Harold James, The Creation and Destruction of Value: The Globalization Cycle. Harvard University Press, 2009.
Princeton Professor Harold James is the author of one of my favorite globalization books, The End of Globalization: Lessons from the Great Depression (2001), so I was excited to learn about his new book on the economic crisis. James is unique in his deep understanding of how financial crisis pushed globalization over the edge in the 1930s and how the current crisis compares with that devastating experience.
I know of only one person who might be James’s equal in this regard: his name is Ben and he works for the Federal Reserve. Since Bernanke isn’t free to write books about the crisis just yet, James is my go-to-guy for deep insights.
And I am not disappointed. Each chapter provides key ideas and raises questions that will draw me back to re-read this book. James’s comparison between the Crash of 2008 and the crises of 1929 and 1931, for example, helped me understand both the recent past and the Great Depression much more clearly. His chapter on the chronology of the crisis is well crafted and broadly useful. I guess I am especially drawn to the last two chapters, however, which look at power and values.
Major financial crises really shake things up. In the penultimate chapter James considers how power will shift in the international system. Will the US retain its strong position or will China or the EU rise to fill the void. James’s wise analysis reminds me of Paul Kennedy’s writings of 20 years ago — informed and useful, raising many questions.
The final chapter on values is very thought-provoking. The collapse of values leaves people confused about whom and what to trust. This is true about market values, which is what the chapters mainly discusses, but also about values more generally, which is how James concludes the book.
Regaining trust is a long and arduous process. That is why when globalization is broken, it is not easy to put it back together again. We will look for communities of virtue, but inevitably we will not find them at once. And the globalization cycle will resume, but not immediately (page 277).
James is right about this, as I argue in Globaloney 2.0. Globalization will come back, but not in the same form. Market values will come back first (see the stock market’s recent surge) but faith in broader values will not be so easily restored.