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WORK TITLE: The Great Convergence
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CITY: Geneva
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COUNTRY: Switzerland
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http://graduateinstitute.ch/home/research/centresandprogrammes/ctei/ctei_people/baldwin_home.html * http://www.ictsd.org/about-us/richard-baldwin * http://www.hup.harvard.edu/results-list.php?author=21978 *
RESEARCHER NOTES:
PERSONAL
Male.
EDUCATION:University of Wisconsin-Madison, B.A.; London School of Economics and Political Science, M.Sc.; Massachusetts Institute of Technology (MIT), Ph.D.
ADDRESS
CAREER
Economist, educator, researcher, consultant, writer, and editor. President’s Council of Economic Advisors, Washington, DC, senior staff economist, 1990-91; Graduate Institute, Geneva, Switzerland, professor of international economics, 1991-; Centre for Economic Policy Research (CEPR), London, England, program director of International Trade program, 1991-2001, policy director, beginning 2006, president, 2016-; National Bureau of Economic Research, Cambridge, MA, research associate. Also a visiting professor at the Massachusetts Institute of Technology (MIT), Cambridge, MA, 1998-99, 2002-03, and Oxford University, Oxford, England, 2012-15. Work-related activities include serving as an elected member on the Council of the European Economic Association, 1999-2004 and 2006-11 and as vice chair of the Academic Advisory Committee of the Peterson Institute for International Economics, Washington, DC. Also worked as consultant for numerous governments, the European Commission, Organisation for Economic Co-Operation and Development (OECD), World Bank, European Free Trade Association (EFTA), and United States Agency for International Development (USAID).
WRITINGS
Contributor to periodicals. Comanaging editor of Economic Policy, 2000-05; found and editor-in-chief of Vox, 2007-.
SIDELIGHTS
Richard E. Baldwin is an economist whose primary interests are international trade, globalization, regionalism, and European integration. He has worked as consultant for numerous governments and international organizations and also served in the administration of George H. W. Bush as a senior staff economist. Baldwin is the author or coauthor of numerous books and articles, including several articles written with the noted American economist Paul Krugman.
In his 2016 book, The Great Convergence: Information Technology and the New Globalization, Baldwin discusses the dramatic change going on in world economics and provides his thoughts on how economic policies need to be adjusted to meet this change. Baldwin points out that the major impetus for the changing economic world stems from a combination of advanced technologies, especially in the realm of communications, and low wages. These factors have led to industrialization in developing nations while developed nations such as the United States have undergone a dramatic period of deindustrialization. For example, Baldwin notes that the wealthy nations of today saw their share of world income grow from twenty to seventy percent over the period of 1820 to 1990. However, since 1990 that share has plummeted.
Baldwin calls the period when wealth was streaming into rich counties the “Great Divergence.” In turn, he names the current period of the reversal of this trend the “Great Convergence.” Baldwin begins with an extensive history of globalization, dating back to the early nineteenth century. He points out that early means of sea transportation via wind power and land transportation via animals meant that production was tied inextricably to relatively local consumption because few things could be shipped profitably over long distances. Baldwin refers to this situation as the forced “bundling” of production and goods.
Although the global trade of some goods can be traced back centuries, forced bundling began to change dramatically with the development of steam-powered ships and trains. The next significant change came with the development of communication technologies enabling fast and inexpensive movement of ideas as well goods. “Mr Baldwin’s grand theory of globalisation is of a series of unbundlings, driven by sequential collapses in the cost of moving things and ideas across space,” noted a contributor to the Economist. Baldwin details how the movement of ideas was expensive until the end of the twentieth century. For example, to send a document by overnight courier cost around $50 and an international phone call was priced at around $5 a minute. As a result, Baldwin writes that industries tended to cluster in relative proximity to one another.
The next phase in globalization began around 1990 and resulted from digital and communications technologies. These technologies loosened the constraint on ideas and enabled easy monitoring and control of supply chains that once had been confined to one economy. The twenty-first century has seen the control of supply chains broken down in numerous stages that could subsequently be handled by various producers around the world based on costs and efficiency. “Baldwin describes very well how this changes the simple country-by-country focus of comparative advantage, with some real-world case studies,” noted Financial Times Online contributor Alan Beattie, pointing to Baldwin’s discussion of how the Korean car industry went from a national to an international industry.
Baldwin also examines how technologies developed in rich countries have been transferred to poorer countries, which began to industrialize, often taking jobs away from unskilled workers in richer countries. Baldwin goes on to detail his thoughts about how to change economic strategies and policies in rich and poor countries to provide a more stable worldwide economy, from better rules concerning intellectual property and training of workers in rich countries to doing away with protectionist policies in poorer countries.
“Baldwin’s 21st-century policies involve setting common rules and standards to make companies feel secure that their supply chains will work,” wrote a contributor to the Economist. In his review for the Financial Times Online Beattie remarked: “Baldwin’s work seems likely to become a standard, perhaps indispensable, guide to understanding how globalisation has got us here and where it is likely to take us next.”
BIOCRIT
PERIODICALS
Economist, November 19, 2016, “The Third Wave; Globalisation,” review of The Great Convergence: Information Technology and the New Globalization, p. 71.
Publishers Weekly, September 19, 2016, review of The Great Convergence, p. 60.
ONLINE
Financial Times Online, https://www.ft.com/ (November 24, 2016), Alan Beattie, review of The Great Convergence.
Foreign Affairs Online, https://www.foreignaffairs.com/ (August 12, 2016), Richard N. Cooper, review of The Great Convergence.
Graduate Institute, Geneva Website, http://graduateinstitute.ch/ (June 20, 2017), author faculty profile.
International Centre for Trade and Sustainable Development Website, http://www.ictsd.org/ (June 20, 2017), brief author profile.
Richard Baldwin
Professor of International Economics, Graduate Institute, Geneva
Richard Baldwin is Professor of International Economics at the Graduate Institute, Geneva since 1991, Policy Director of CEPR since 2006, Editor-in-Chief of Vox since he founded it in June 2007, and an elected Member of the Council of the European Economic Association. He was a Senior Staff Economist for the President's Council of Economic Advisors in the Bush Administration (1990-1991) following Uruguay Round, NAFTA and EAI negotiations as well as numerous US-Japan trade issues including the SII talks and the Semiconductor Agreement renewal. He was Co-managing Editor of the journal Economic Policy from 2000 to 2005, and Programme Director of CEPR’s International Trade programme from 1991 to 2001.
Richard Baldwin is Professor of International Economics at the Graduate Institute, Geneva, and President of the Centre for Economic Policy Research (CEPR), London.
Richard Baldwin
Professor of International Economics
Richard Edward Baldwin is Professor of International Economics at the Graduate Institute, Geneva since 1991, Policy Director of CEPR since 2006, Editor-in-Chief of Vox since he founded it in June 2007, and an elected Member of the Council of the European Economic Association. He was a Senior Staff Economist for the President's Council of Economic Advisors in the Bush Administration (1990-1991) following Uruguay Round, NAFTA and EAI negotiations as well as numerous US-Japan trade issues including the SII talks and the Semiconductor Agreement renewal. He was Co-managing Editor of the journal Economic Policy from 2000 to 2005, and Programme Director of CEPR’s International Trade programme from 1991 to 2001.
The author of numerous books and articles, his research interests include international trade, globalisation, regionalism, and European integration; he has worked as consultant for the numerous governments, the European Commission, OECD, World Bank, EFTA, and USAID.
He wrote his PhD at MIT under the guidance of Paul Krugman, with whom he has co-author a half dozen articles the most recent of which was published in 2004. His M.Sc. is from LSE, his B.A. from the University of Wisconsin-Madison; he was awarded an honorary doctorate by Turku School of Economics and Business in 2005.
______________________________
Richard E. Baldwin
Professor, International Economics
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Address : Richard Wagner 1,
5th Floor, Room 501
Email : Baldwin (at) graduateinstitute.ch
Phone : +41 22 908 59 33
Courses taught:
* Advanced Doctoral Seminar : Trade l
* Microeconomics I
* Microeconomics II : Trade Theory and Policy
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BOOKS
The Economics of European Integration, 3rd Edition
Richard Baldwin and Charles Wyplosz, 2009
Multilateralising Regionalism
Ideas for a WTO Action Plan on Regionalism
Richard Baldwin and Phil Thornton, 2008
Economic Geography and Public Policy
Richard Baldwin, Rikard Forslid, Philippe Martin, Gianmarco Ottaviano, and Frederic Robert-Nicoud, 2003
Nice Try: Should the Treaty of Nice be Ratified?
Richard Baldwin and Erik Berglof, Francesco Giavazzi and Mika Widgren, 2001
Towards an Integrated Europe
Richard Baldwin, 1994
Richard Baldwin (economist)
From Wikipedia, the free encyclopedia
Richard E. Baldwin is a professor of international economics at the Graduate Institute of International and Development Studies in Geneva.[1][2][3] He is also President of the Centre for Economic Policy Research (CEPR) since 2016 and Editor-in-Chief of VoxEU, which he founded in June 2007.[4][5] He is a research associate at the National Bureau of Economic Research, where he has been researching globalization and trade for the past 30 years.[6] He was twice elected as a Member of the Council of the European Economic Association.
He has published in the areas of international trade, regionalism, WTO, European integration, economic geography, political economy and growth.[7] His most recent work, entitled The Great Convergence: Information Technology and the New Globalization, was published in November 2016.[8]
He wrote his PhD at MIT under the guidance of Paul Krugman, with whom he has co-authored half a dozen articles. He received honorary doctorates from the Turku School of Economics (Finland), University of St. Gallen (Switzerland) and Pontifical Catholic University of Peru (PUCP).[9]
In 1990–1991 he followed trade matters for the President's Council of Economic Advisors in the Bush White House. He has consulted for many governments and international organisations including the EU, the OECD, the World Bank, EFTA, USAID. He worked as an Associate Economic Affairs Officer for UNCTAD in the early 1980s.
Richard Baldwin is Professor of International Economics at the Graduate Institute in Geneva as well as President of the Centre for Economic Policy Research (CEPR) in London, and Editor-in-Chief of the economic policy portal VoxEU.org (which he founded in June 2007).
Before coming to Geneva, he was a Senior Staff Economist for the President's Council of Economic Advisors in the Bush (the Elder) Administration (1990-1991) following trade negotiations such as the Uruguay Round, NAFTA and numerous US-Japan trade disputes.
He has been a visiting professor at Oxford (2012-2015) and MIT (2002-2003 & 1998-1999), having started his academic career as a professor at the Columbia School of Business in New York.
The author of numerous books and articles, his research interests include international trade, globalisation, regionalism, and European integration. His latest book, The Great Convergence: Information technology and the New Globalisation, was published by Harvard University Press in November 2016. He provides advice and consultancy for numerous governments and international organisations on international trade issues.
He wrote his PhD at MIT under the guidance of Paul Krugman, with whom he has co-author a half dozen articles. His MSc in economics is from LSE, his BA in economics from the University of Wisconsin-Madison and he has honorary doctorates from the Turku School of Economics and Business in Finland (2005), the University of St. Gallen in Switzerland (2012), and the Pontifica Universidad Católica del Perú (PUCP), in Peru (2014).
He was Vice Chair of the Academic Advisory Committee of the Peterson Institute for International Economics in Washington (2008 - 2012), and an Elected Member on the Council of the European Economic Association, (1999-2004, 2006-2011).
The Great Convergence: Information Technology and the New Globalization
263.38 (Sept. 19, 2016): p60.
Copyright: COPYRIGHT 2016 PWxyz, LLC
http://www.publishersweekly.com/
The Great Convergence: Information Technology and the New Globalization
Richard Baldwin. Belknap, $29.95 (322p) ISBN 978-0-674-66048-9
[ILLUSTRATION OMITTED]
In this meaty treatise, Baldwin, an economics professor at the Graduate Institute, Geneva, argues that we're in the process of a major shift in world economics and economic policy needs to be adjusted accordingly. He begins by identifying 1990 as the point when the historical funneling of wealth to rich countries--the "Great Divergence"--began to be reversed, in the "Great Convergence." Baldwin posits globalization as the gradual undoing of a forced "bundling" of production and consumption, due to the decreasing cost of moving goods, ideas, and people. Baldwin takes readers through a lot of history, from the introduction of the steam engine, which caused the first unbundling, to the development of information and communication technology, the second unbundling. He seeks to reassure pessimists by showing that recent changes--typified by the offshoring of jobs--are not out of line with historical experience, but also cautions that a broad range of policies need to be reconsidered. Most interestingly, he writes that we are close to the technology--telerobotics, telepresence, and "virtual immigration"--that would allow citizens of developing nations to offer their labor remotely. Baldwin has put together an intriguing and compelling case, but the dense, academic language is likely to keep it out of the hands of laypeople. (Nov.)
Source Citation (MLA 8th Edition)
"The Great Convergence: Information Technology and the New Globalization." Publishers Weekly, 19 Sept. 2016, p. 60+. General OneFile, go.galegroup.com/ps/i.do?p=ITOF&sw=w&u=schlager&v=2.1&id=GALE%7CA464352761&it=r&asid=eb160d46f9e79f8c56609bca27ef3b23. Accessed 3 June 2017.
Gale Document Number: GALE|A464352761
The third wave; Globalisation
421.9016 (Nov. 19, 2016): p71(US).
Copyright: COPYRIGHT 2016 Economist Intelligence Unit N.A. Incorporated
http://store.eiu.com/
Easier movement of things, then of ideas, fuelled globalisation. Moving people may be the hardest
BILL CLINTON once called globalisation "the economic equivalent of a force of nature, like wind or water". It pushes countries to specialise and swap, making them richer, and the world smaller. In "The Great Convergence", Richard Baldwin, a Geneva-based economist, adds an important detail: like wind and water, globalisation is powerful, but can be inconstant or even destructive. Unless beloved notions catch up with reality, politicians will be pushed to make grave mistakes.
In an economist's dream world, things, ideas and people would flow freely across borders. Reality is stickier, and stuff less mobile--so much so that it trapped humankind's ancestors into village-level economies. Constraints on trade once bundled consumption and production together, limiting their growth.
Mr Baldwin's grand theory of globalisation is of a series of unbundlings, driven by sequential collapses in the cost of moving things and ideas across space. From the domestication of the camel around 1,000BC to the first commercial steam engine in 1712, the first great wave of globalisation unbundled production and consumption. From 1820, British prices were set by international demand, and cafe-goers could sip Chinese tea sweetened with Jamaican sugar.
Though moving goods became cheap, until the very end of the 20th century moving ideas was expensive. Mr Baldwin invites readers over 50 to remember international calls costing $5 a minute, or the $50 price of sending a single document by an overnight courier. This encouraged industries to cluster. The hubs of economic activity emerged in the countries we now know as the G7. In this form of globalisation, national teams of ideas and workers battled for market share, and became richer in the process. Mr Baldwin uses the analogy of two sports teams swapping players to improve their performance.
But since the 1990s globalisation has changed radically, as the internet has lifted the cost of moving ideas, and fuelled a second unbundling. Now that co-ordinating international production is cheaper, faster and safer, supply chains ignore borders to go sprawling across the world. A Canadian aeroplane-maker can direct a team of Mexican engineers. Apple can combine American design with Chinese assembly lines. With many products made everywhere, trade has been, in effect, denationalised.
The pace of change and the new ease with which rich-world companies can outsource work have eliminated the old boundaries around knowledge and created a new, more unsettling trade landscape. Once, textile-mill workers in South Carolina had exclusive access to American technology. Although it might seem that they have lost out to competition from Mexican workers, more accurately they face an altogether more formidable competitor: Mexican workers made more productive by American know-how.
Continuing the sports analogy, Mr Baldwin says that today's trade is like the coach of a top team being allowed to offer his services to underdogs. The coach gets rich from the doubled market for his services, while the better team gets a sudden surprise from the newly skilled competition. Mr Baldwin says that discontent with globalisation stems in part from an "ill-defined sense that it is no longer a sport for national teams".
To placate voters by raising tariffs is to tackle 21st-century globalisation with tools better suited to the 20th (or even 19th) century. Given the new world of global supply chains, a tariff is like erecting a wall in the middle of a factory. Mr Baldwin's 21st-century policies involve setting common rules and standards to make companies feel secure that their supply chains will work. These are the goals of trade deals like the Trans-Pacific Partnership, or Britain's membership of the European Union's customs union--both under threat. And he says little on how to win over disgruntled voters, save a few lines on support for workers rather than jobs, and a vague plea to share gains between winners and losers.
Mr Baldwin is too sanguine about the politics of globalisation. His rosy vision of the future imagines globalisation unshackled from its third constraint, as labour is made mobile by robots allowing people to offer their services remotely. In a different world, perhaps. A quip from his conclusion, written before America's presidential election, has unintended weight. "Not even the future is what it used to be."
The Great Convergence: Information Technology and the New Globalization.
By Richard Baldwin.
Source Citation (MLA 8th Edition)
"The third wave; Globalisation." The Economist, 19 Nov. 2016, p. 71(US). General OneFile, go.galegroup.com/ps/i.do?p=ITOF&sw=w&u=schlager&v=2.1&id=GALE%7CA470492799&it=r&asid=e66f13a7503cd292eca4ddcfb491018b. Accessed 3 June 2017.
Gale Document Number: GALE|A470492799
The Great Convergence: Information Technology and the New Globalization
by Richard Baldwin
Reviewed by Richard N. Cooper
In This Review
The Great Convergence: Information Technology and the New Globalization
Richard Baldwin
The first part of this book offers a breathtaking overview of the four phases of globalization that Baldwin argues have taken place during the past 200,000 years. Baldwin then focuses on the third phase, which lasted from 1820 until 1990, and the fourth one, which is still ongoing.
The third phase began with the steam engine and other significant improvements in transportation, which led to increased trade in goods among different parts of the world. The fourth phase has involved the transfer of rich-country technologies to workers in poor countries, which has raised productivity in those places and enabled them to industrialize—sometimes at the expense of unskilled workers in rich countries. This outcome, Baldwin argues, calls for a reorientation of strategy and policy in both rich and poor countries. Rich countries need to craft better rules governing foreign investment and intellectual property rights, and they should focus on the training and well-being of workers rather than the preservation of particular jobs. Poor countries should pursue industrialization by first importing technology and attracting investment and then building up capacity at the local level, all the while remaining open to trade rather than pursuing protectionist policies.
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November 24, 2016
by: Alan Beattie
Every newspaper picture editor knows the score. If it’s a story about trade, it gets illustrated with a photo of a gargantuan cargo ship piled high with containers. And every amateur apostle of the free market, along with a few government ministers, knows that all you need to do to win an argument about trade is to cite the theory of comparative advantage and you’re pretty much done.
Much public understanding about trade and globalisation is either scant or trapped in models and realities that owe more to the 20th century, and sometimes the 19th, than to today. At a moment when the downsides of trade and globalisation are cited as causes of Brexit, the election of Donald Trump and the rise of rightwing populism in Europe, getting the analysis right is a matter of rather more than academic interest.
Enter, with exemplary timing, this excellent book by Richard Baldwin, an academic with a strong applied focus, who combines a professorship at the Graduate Institute in Geneva with the presidency of the Centre for Economic Policy Research, a renowned network of economists.
For its time and as far as it goes, the 19th-century theory of comparative advantage is fine. Countries specialise in what they are relatively good at: high-wage and capital-rich 19th-century Europe did higher-technology industry, poorer countries such as India did agriculture and small-scale manufactures. Thus, given the productivity gains in manufacturing, began the “Great Divergence” that meant the richer countries pulling away from the rest.
But Baldwin’s analysis notes this was only one form of globalisation. His framework posits three “cascading constraints” that hold back the globalisation of markets, namely the costs of moving goods, ideas and people. Initially, all were bundled together: early societies stayed where they were, passed down information to the next generation and ate what they grew. The first wave of globalisation that created the Great Divergence expanded markets via the falling cost of transporting physical goods, thanks to the steamship and the railway.
Workers load containers on to trucks at a container terminal in Sydney, Australia, November 2015 © Reuters
But the globalisation that began around 1990 and led to the astonishing rise — in fact, re-emergence — of China and other emerging market giants reflected a relaxation of the constraint on ideas. Digitisation and communications allowed the monitoring and control of supply chains that had previously been bundled together in one economy to be split up into dozens or hundreds of stages, which were then allocated to producers around the globe according to efficiency and cost.
Baldwin describes very well how this changes the simple country-by-country focus of comparative advantage, with some real-world case studies. South Korea, for example, shifted from its original model of operating an entire car industry at home to setting up an international automotive supply chain. With production processes being broken up into individual pieces and tasks, the sophistication goes to finer degrees. Some groups of workers, who can provide the necessary skills for the cheapest rate, prosper; some languish. Manufacturing sectors in rich countries require workers with very different skills, historically more typical of the service sector, such as management and design.
Just as South Korea has changed, so newly industrialising countries are less keen on setting up entire industries at home and instead try to insert themselves into global supply chains. Sometimes this means changing, not just exploiting, their comparative advantage. Baldwin cites Vietnam, which joined Honda’s supply network by starting to manufacture motorcycle parts using production and technical expertise imported from the parent company. Thus Vietnam’s existing advantage of low-cost labour joined with the management and technical know-how of Japan to create a new specialism. Those economies that succeed can grow very quickly, producing a “Great Convergence” of poor and rich that provides the book’s title.
This framework explains a lot about current tensions around globalisation. For one, the stricken manufacturing towns of the American Midwest, many of whose poorer inhabitants switched to voting for Donald Trump, have experienced first-hand what it feels like rapidly to become a redundant link in a global value chain. (Much of this also owes to changing technology, not trade, but as the US trade representative Michael Froman is fond of saying, no one gets a vote on technology.)
Second, it shows why modern trade deals, such as the proposed Transatlantic Trade and Investment Partnership between the US and EU, are centred on rules protecting patents and copyrights, and allowing foreign corporations to sue governments if they feel their investments are being expropriated. Multinationals are less concerned with goods tariffs, which are now generally low and belong to an earlier era of trade governance, than they are with trying to protect the specialist knowledge on which their global supply chains depend.
It also foresees the future of globalisation once technology has relaxed the third constraint, the movement of people. The easier it becomes to manage processes from afar — improved videoconferencing, remote-controlled robots — the more virtual immigration can substitute for actual and the specialisation of global supply chains proceed even faster.
Baldwin’s work seems likely to become a standard, perhaps indispensable, guide to understanding how globalisation has got us here and where it is likely to take us next. There can be few more vital subjects today that will benefit from this sort of clear and comprehensive exposition.
The Great Convergence: Information Technology and the New Globalization, by Richard Baldwin, Harvard University Press, RRP£22.95/$29.95, 344 pages
Alan Beattie is the FT’s Brussels leader writer
Photographs: Reuters