A Critical Political Economy of Trade Theory and Practice
Chapter 10: Global restructuring, trade and the crisis of 2007–09
The chapter takes up the story of trade, where it left off in Chapter 2, discussing how and why trade and trade imbalances grew from the 1970s to the crisis of the late 2000s. These imbalances have been widely recognized, from different perspectives, as contributing to the crisis (Wade 2009; IMF 2011). It is argued here that they were not simply maladjustment, susceptible to a little light re-engineering, but reflected deep-seated changes in the organization of the global economy. The experience of these changes also confirms the themes of this book that trade in itself is neither good nor bad. It benefits some and harms others in particular circumstances. Trade relations are about power and need to be understood in relation to other political economic processes. The chapter is organized into four sections. The first describes the crisis of the 1970s and how that crisis provoked key reorientations in the global economy. The second section looks specifically at rich countries and changing relations between the ‘Triad’ of the US, Japan and Europe. The third section concentrates on the changing situation and increasingly outward orientation of many poorer countries. Finally, the chapter comments briefly on how trade imbalances fed the financial fragility that was revealed in the crash of the late 2000s. Trade increased enormously in the late twentieth century. The story has been widely told.
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