The decade before the dawning of the new century, mankind’s triumphant advances seemed to signal that the world was headed toward a new, modern era of peace and global prosperity. It was believed our shared humanity would triumph and that the modern world’s unrivaled levels of internationalism would increase understanding and extend compassion to peoples across the globe. But this liberal vision was soon overshadowed by a series of darkening clouds. The ill effects of liberal market forces undercut people’s initial excitement over the promise of internationalism. Protectionism, nativism, and xenophobia materialized in their stead.
Schumpeter’s schema is valuable for understanding the rise of hyper-globalization and the spread of liberalism in each epoch. His theory can be applied to illustrate how, during both the Second Industrial Revolution and the Digital Revolution, new innovations in transportation and communications made possible the internationalization of finance, the opening of markets, and the flow of people and products at an unprecedented level. Yet, his analysis is a much weaker tool for interpreting the responses against globalization and liberalism.
In contrast, Polanyi is hazy about the mechanisms that unleashed the double movement, but he explains much better than Schumpeter why liberalism produced anti-liberal responses. Polanyi helps us understand how in the late nineteenth century, laissez-faire policies were spread across the world, threatening existing forms of social organization. He describes how institutions that had formerly protected people began to erode as economic changes were challenging people’s livelihoods. Market mechanisms were unable to protect society from the pain and suffering caused by these transformations. All of this provided fertile ground for anti-liberal movements. Hence, Polanyi’s theory offers a much more coherent explanation for the rise of anti-global, national populism.
The following chapters will examine the kinds of changes Polanyi centers on to show that they were present in both epochs. Although it is not feasible to present historical examples of all the socioeconomic shifts that materialized in response to globalizing technological revolutions, it is possible to illustrate some of the more consequential ones. The following exposition will focus on the interconnections among these radical changes and how they helped foster social distress. Chapter 7 will examine how revolutionary technologies destroyed traditional forms of economic organization. The uprooting of people’s livelihoods occurred at the same time as increased dependence upon trade and finance made national economies vulnerable to international price shocks. Eventually, this led to globally contagious economic crises. Chapter 8 explores how the communications revolutions in both periods introduced new forms of mass media. The manner and speed with which information was able to flow presented society with newfound opportunities, but also presented grave dangers. Finally, Chapter 9 will look at how mass immigration evolved in tandem with never-before-seen modes of globalized terrorism, sparking fear across the developed world and provoking an anti-immigrant backlash at the close of both centuries.