Global Trade and Global Finance Textbook Chapter 28 PDF

Chapter 28 Global trade and global finance mat thew watson Framing Questions How has the Covid-19 pandemic changed the experience of global trade and global finance? Given the recent rise of populist nationalism and the associated retreat of liberal globalism, are the political premises on...

Chapter 28 Global trade and global finance mat thew watson Framing Questions How has the Covid-19 pandemic changed the experience of global trade and global finance? Given the recent rise of populist nationalism and the associated retreat of liberal globalism, are the political premises on which economic globalization has been managed for so long now in terminal decline? As the global economy is so good at allowing some people to own untold riches while many others have too little money to meet basic subsistence needs, is the historic record of global economic governance institutions one of conspicuous failure? Reader’s Guide it bears down upon them as an additional pressure to perform basic low-paid work. The chapter reviews the This chapter introduces students to important issues extent to which these asymmetries can be said to be in the conduct of global trade and global finance. It deliberate design features of the global regulation of shows that the two spheres are regulated by different trade and finance. The pattern of prevailing regulatory governance institutions, but that disturbances in one norms reflects a hierarchical structure in which some can result in related disturbances in the other. This cor- countries are systematically better than others at suc- responds to one of the most widely cited definitions cessfully imprinting their interests. The desire of the of economic globalization, in which globalization is rich and powerful to enhance their advantages has understood as the increased sensitivity of one part of generally overridden the search for systemic regulatory the world economy to events originating elsewhere. coherence, increasing the degree to which difficulties However, such increased interconnectedness does not in either trade or finance create knock-on problems in mean that everyone everywhere experiences the global the other sphere. The recent rise of populist national- economy in the same way. For some, globalization has ism has challenged the dominance of global elites, but increased their access to consumer goods and provided its ‘victories’ will do nothing to enhance systemic regu- higher standards of living as a result; for many others, latory coherence. 442 matthew watson 28.1 Introduction Global economic governance institutions appeared to financial and human resources during the pandemic to be much less visible during the Covid-19 pandemic than observing, scrutinizing, and comparing a wide range of at any time in the previous four decades. Governments national responses. Their data analysis experts played around the world were placed in unprecedented circum- an important role in tracking both public health and stances in which they were required to restrict which economic trends as countries chose their own solutions businesses could remain open, encourage everyone who about how best to balance the competing imperatives could to work at home, and create furlough schemes in of protecting lives and protecting livelihoods. However, which those who could work but now had no job to go to they were denied the political space to foster a truly were temporarily paid using public money. Global gov- global response, even if there had been the will within ernance institutions have become accustomed to play- the institutions to attempt one. As regards the invasion of ing a coordinating role, writing a series of rules to define Ukraine, the institutions of global economic governance the context in which economic activity takes place, had no mandate to act unilaterally against Russia. The both within and across national borders. Yet as the pan- case for compulsory withdrawal from any of the insti- demic drove a hole through previous standard operat- tutions is difficult to pursue within the established legal ing procedures, it was left to national governments to framework if the member continues to abide by its finan- come up with their own solutions to see them through cial obligations, as they were set up to regulate cross-­ the disruption the pandemic had imposed on everyday border activities in normal times, not in times of war. The economic life. Most countries enacted an avowedly go- most they were able to do was warn the Russian leader- it-alone approach, and a genuinely global response to a ship about the extent of economic damage it was inviting global public health crisis never materialized. upon itself and the future difficulty it was likely to face in The Western response to Russia’s February 2022 discharging its dollar-denominated debts having had its invasion of Ukraine largely followed the same pat- access to international financial markets revoked. tern. The European Union attempted to maintain a The Russian invasion of Ukraine came hard on the united front for as long as possible, but was always con- heels of Covid-19, which itself followed a surge in popu- scious that the foreign and economic policy interests list nationalism. While its specific content has differed of its member states were likely to promote different from one country to the next, wherever in the world national preferences for the joint response. The United right-wing populist nationalism has made headway it has States attempted to play a coordinating role through harked back to the country’s perceived golden age. This is a NATO, but also came up against limits on what it could time before globalization, when national society was sup- do because of the divergent opinions of its members. posedly a more authentic version of itself than it has sub- Western countries did vote en masse at the United sequently become under the influence of globalization’s Nations to condemn the invasion and insist upon homogenizing forces. The populist nationalist instinct has the immediate cessation of hostilities. It was notice- been to place significant restrictions on people moving able, however, just how many other countries chose freely between countries in an attempt to protect the per- not to endorse the resolution, thus preventing it from ceived purity of the national community. Governments’ becoming a genuinely global denouncement of Russian economic response to the pandemic was focused on how aggression. It was therefore left to individual countries to support workers and businesses whose normal activi- to decide how much defensive military hardware they ties had to be suspended once controls on population were willing to donate to Ukraine’s war effort, as well as movement were enacted to help limit the spread of the how much damage they were willing to inflict on their virus. The public health emergency therefore reinforced own economies when targeting Russia’s. Western coun- the cultural and political turns that populist national- tries did all enact an economic sanctions regime, yet ists had already taken away from liberal cosmopolitan- once more a go-it-alone approach prevailed in terms of ism as borders were closed to international travel. It is which Russians got sanctioned and to what extent. when those who are outsiders by birth seek access to the In both instances, the International Monetary national community that populist nationalists’ perfor- Fund (IMF), the World Bank, and the World Trade mative interest in sovereignty is most readily manifested Organization (WTO) were reduced to a largely watching in practice (see Chs 18 and 26). The pandemic required brief. They devoted a considerable amount of their own borders to be shut to people, if not to capital or goods,  Chapter 28 Global trade and global finance 443 and they were slow to reopen to their pre-pandemic lev- the prevailing model of globalization because of its ten- els. Russia’s invasion of Ukraine complicated this picture dency to foster ever greater inequality both between somewhat. The re-emergence of an external threat to countries and within them. They asked instead for a national self-determination seemed to fit well with popu- more humane globalization that put need-satisfaction list nationalists’ deglobalizing project of re-bordering, above profit-making, long-term planetary survival but many such leaders found that their prior praise of above short-term economic growth. This was always Russian President Vladimir Putin was now being used only secondarily a challenge to the institutions of global against them politically. They were often shamed into regulation and primarily a challenge to the neoliberal declaring their commitment to Western liberal values ideology that determined the content of their regulatory they had previously opposed, and the public’s demand output. Since the mid-2000s, however, we have seen an for Ukrainian refugees to be treated with cosmopolitan increasing challenge to the system itself, with populist hospitality was a source of considerable embarrassment. nationalist leaders seeking to repatriate policymaking From the general economic crisis of the 1970s to powers that had sometime previously been delegated the overlapping financial crises of the 2010s, develop- to global governance institutions. Former US President ments within world politics seemed only to be head- Donald Trump is perhaps on the extreme edge of popu- ing in one direction. We were told that the momentum list nationalist political opinion in routinely questioning behind economic globalization was unstoppable, and global governance institutions’ right to exist, but their that the more people experienced the benefits that a bullishness about their successful transformation of global economy could deliver the greater the likelihood the world economy and their more general aura of self- that they would elect parties that wished to see more assurance are nowhere near as noticeable today as they of the same. However, this was always something of once were. Putin, it should be noted, is also not a fan. an overstatement. For at least a decade from the mid- Where economic globalization was once presented as a 1990s, significant numbers were mobilizing politically one-way process without end, now we see a much more in favour of an alternative economic globalization to complex pattern of globalization and de­globalization the one on offer. Pro-development progressives rejected existing side-by-side. 28.2 The globalization of trade and finance The political cleavage between today’s populist nation- the 1970s, but it also tends to be used—with varying alists and the liberal globalists who were dominant degrees of analytical precision—to describe the pattern until the global financial crisis is activated by different of interdependent economic flows which has resulted answers to the question of who has benefited from eco- (see Chs 2 and 3). There have certainly been large nomic globalization. Populist nationalists will say that increases since the 1970s in the integration of national only a global elite has profited, whereas liberal global- markets for both traded goods and financial flows, but ists will argue that economic globalization has allowed this does not in itself mean that the ensuing market everyone to bask in new wealth, as it has created oppor- arrangements incorporate all countries of the world tunities for increased production and increased con- in any way evenly. In fact, when we disaggregate the sumption around the world. There is no denying the data at hemispherical, regional, national, and local lev- fact of globalization, only disagreement over the way els, it becomes clear that we are looking at a complex that it touches down in people’s lives. Populist national- geographical picture on a spectrum between significant ists depict a global elite disconnected from the national globalization hotspots and areas that have been almost community and seemingly owing no allegiance to it, completely bypassed by globalizing trends. It is there- but liberal globalists counter with the image of a rising fore important to differentiate between the ‘intensity’ tide lifting all boats. and the ‘extensity’ of supposedly global flows of trade However, it remains an unresolved issue in the aca- and finance (Held et al. 1999). Intensity measures reveal demic literature just how prevalent the trend towards the degree to which national borders are now traversed genuine economic globalization actually is. The word by such flows: they indicate whether there are higher ‘globalization’ has become synonymous with the time volumes of flows than previously, but remain silent on period of enhanced national market integration since their geographical character. Extensity measures, by 444 matthew watson contrast, focus on the geographical dispersal of con- The most frequently cited indicator of economic glo- temporary trade and finance: they ask not simply about balization is the dramatic increase since the 1970s in overall volumes of flows but also whether they system- world trade (see Box 28.1). Liberal globalists paint this atically incorporate more countries of the world, as well increase as evidence of how the reduction of economic as more areas within those countries. The distinction, barriers between countries has helped to lift huge num- then, is between the speeding up and the spreading out bers of people out of poverty, but populist nationalists are of flows of trade and finance. Somewhat confusingly, happier citing selectively from beneath the headline fig- the single word ‘globalization’ is frequently used to ures to argue that the gains from trade are being monop- describe both phenomena, even though it would clearly olized by foreigners and that the domestic in-group is be preferable to keep them analytically distinct. losing out by comparison. The political interpretation of The post-pandemic period will provide an inter- the same economic data can therefore lead in very differ- esting case in this regard. Politicians from virtually ent directions. But what do the numbers themselves say? every country went public at an early stage in the Taking the 2000 figure as the baseline number pandemic with their yearning for normality. But what of 100—which itself corresponded in value terms to will post-pandemic normality look like, especially approximately $8.6 trillion of world trade—this com- with the fallout from Russia’s invasion of Ukraine to pares with standardized annual numbers of 22 for factor in on top? Will it be an attempt to recreate what 1970, 37 for 1980, and 54 for 1990. In other words, in was actually there before, a globalization that seemed this take-off and early maturation stage of economic to privilege the experiences of consumers who are globalization, the volume of world exports grew by already able to enjoy living standards considerably roughly a factor of 4.5 between 1970 and 2000, a factor higher than the global average? Will it be an attempt of 3 between 1980 and 2000, and a factor of 2 between to create for the first time what liberal globalists have 1990 and 2000 alone. However, this accelerating trend always said was the ultimate promise of globalization, has not survived the fallout from the global financial a structure of global economic rewards from which crisis and the dawning of an era of new uncertainties. nobody is excluded? Or will it be an attempt to fur- The aggregate annual value of world trade on merchan- ther embed the populist nationalist agenda, a strate- dise goods stood at $17.6 trillion in recorded exports gic deglobalization that seeks to assure the domestic in 2020, or $17,582,919,000,000 when written out in in-group that it is making gains at the expense of full. This is up from $16.2 trillion in 2008, immediately out-groups? Only in the second of these scenarios before the fallout of the global financial crisis impacted can extensity measures of globalization be expected trade volumes, and also up from $16.0 trillion in 2016, to win out over intensity measures, but the prevailing following further aftershocks of the global financial cri- configuration of global politics makes it seem least sis almost a decade after its onset. Yet it was down from likely (see Case Study 28.1). Partly this is an issue $19.0 trillion in 2014, the pre-2016 peak, and also down of development, because the organization of cross- from $19.6 trillion in 2018, the current annual record. border economic activities has historically tended to What we now seem to have, then, is not the prom- focus only on the most advanced sectors of the world ise of year-on-year increases in the volume of merchan- economy (see Ch. 27). Partly it is an issue of politi- dise goods being traded across borders, but oscillations cal asymmetries in the regulatory system for global between good years and bad, and it is possible that the trade and global finance, with the advanced industri- trend rate of world trade has already topped out. The alized countries keeping most of the economic gains Covid-19 pandemic has merely added a new dimension from globalization for themselves. The rise of popu- to existing cyclical effects, the impact of Russia’s inva- list nationalism in those countries is likely merely to sion of Ukraine on world energy and food prices another. enhance such dynamics, but the fact that they exist at The volume of world exports fell by 7.53 per cent in 2020, all has helped to trigger the rise of populist national- which was actually much less than originally forecast. ism in other countries. Western governments seemed to have learnt at least one of the lessons of the global financial crisis, when they Watch the video on the online resources to see did not intervene aggressively enough to counteract the the author discuss the political impact of popu- impact on traded goods. World leaders took a laissez- list nationalism on governing the global trade faire approach on that occasion, and they watched as the system. value of merchandise exports fell by 22.31 per cent in a  Chapter 28 Global trade and global finance 445 Case Study 28.1 The Covid-19 vaccination programme and global economic recovery doses that they would never use in preference for diverting them to where they would have greatest effect. Its Director-General, Tedros Adhanom Ghebreyesus, made it clear that a ‘me first’ approach of the richest countries vaccinating their own popula- tions while allowing the virus to transmit freely in poorer coun- tries ran the risk of facilitating new variants that would push the global vaccination effort back to square one. Western nations’ self-interest could therefore be appealed to as a reason for taking a truly global approach to vaccinations, with the WHO’s Eurasia Group putting an eye-catchingly large number on the potential gains. It estimated that G7 economies stood to be better off by at least $500 billion over a four-year period through the restora- Family photo of the G7 leaders at Carbis Bay tion of global trade if they acted immediately to ensure that all © Prime Minister's Office of Japan (CC BY 4.0) countries were vaccinated at the same rate. Despite this, the 2021 summit led to the gifting of less than 10 per cent of the doses that were necessary to bring the whole The pre-2021 summit promotional material made much of how world’s vaccination rates up to those at that time already dis- G7 leaders had committed their countries to working together played by the West. G7 leaders ignored a burden-sharing for- to harness the global economy’s potential to bounce back from mula drawn up by Norway and South Africa under which the Covid-19. They congratulated themselves on how much they had broadest shoulders would accept the heaviest costs, and they spent to prevent their economies from completely flatlining dur- failed to agree on a temporary patent waiver through which ing extended periods in which their populations had been locked vaccine technology could be transferred free-of-cost to poorer down, but they were mistaken if they were expecting other peo- nations. Overall, then, they turned their backs on a universal vac- ple’s congratulations for how much they were contributing to cination plan designed to benefit the whole world. The first G7 of the global recovery effort. G7 leaders hailed the first summit of the post-Trump era exhibited none of the crudeness of his per- the post-Trump era as the perfect opportunity to demonstrate sonal brand of nationalism, but it was entirely unsuccessful if it that liberal globalism was fighting back against populist national- was meant to demonstrate the rebirth of liberal globalism. ism. Yet their insistence that the global economy would be back open for business as soon as the public health situation allowed Question 1: Why did G7 leaders not fund a genuinely global seemed inconsistent with their reluctance to think globally when approach to Covid-19 vaccinations when their economies would discussing the future of their excess Covid-19 vaccines. clearly have benefited from doing so? The World Health Organization (WHO) called repeatedly during the first six months of the global vaccination effort for Question 2: Was there a moral as well as economic case against Western nations to stop using their financial muscle to stockpile Western nations continuing to stockpile their surplus vaccines? single year between 2008 and 2009 (all figures calculated Box 28.1 What is international trade? from WTO 2017b and WTO 2021b). Simply stated, international trade occurs when one country’s What, then, of financial flows? When we think of citizens (the exporters) produce a good that another country’s trade in merchandise goods, it is easy to picture the citizens (the importers) consume. The world economy has embedded infrastructure and the complex delivery become generally more open to trade under the influence systems that are required to transport a good from the of globalization. Trade openness increases when the ratio of growth in global trade to growth in global GDP is greater than producer to the consumer. Transport links involving 1.0. The WTO has calculated that, from 1945 to the present day, airplanes, container ships, trains, and road haulage are this ratio has averaged around 1.5:1 as a whole, rising to 1.77:1 readily summoned to mind. However, there is no direct for the take-off period to economic globalization, 1970–2000. analogue in the world of global finance. Infrastructure Since 2000, the picture has been more mixed: well above 2:1 in is still required: this time fibre-optic networks that good years for global merchandise trade, but dipping to as low as 0.6:1 when good years give way to bad. Whenever the ratio allow financial markets to exist simultaneously on the falls below 1.0, the world economy becomes less open to trade computer screens of traders wherever in the world they and therefore less globalized in intensity terms. happen to be, plus sufficient bandwidth to allow par- ticipants within the market environment to see how 446 matthew watson alone is 145 times greater than that of the entirety of Box 28.2 What is international finance? world trade in merchandise goods. If we imagine cur- Even though the language and economic imagery used to rency trading as a 24/7 activity conducted 365 days per describe international trade and international finance are year, it takes only until mid-afternoon on 3 January to often the same, in practice their dynamics differ substantially. execute the same value of deals as merchandise export- Financial products only very rarely flow across borders in any ers manage in aggregate in a whole year. straightforward import/export sense. Financial trading activi- ties typically take place through highly capitalized and reputa- The biggest factor in the increase of turnover on ble counterparties—banks, insurance companies, hedge funds, global currency markets between 2016 and 2019 was professional investment bodies, pension funds, asset manage- the huge increase in foreign exchange swaps. This ment funds, and so on—swapping giant IOUs. These are either was almost solely due to the US Federal Reserve added to or subtracted from their ‘paper’ position at the end increasingly making dollars available to other central of each day’s trading. banks on the assumption that successful US monetary policy now requires stability throughout intercon- nected global financial markets. Eighty-eight per cent prices are changing in real time. But there is no knock of the currency market trades that constitute an indus- on the door that precedes the product making the final try worth $2.4 quadrillion annually have the US dol- part of its journey when it is physically handed over to lar on one side of the trade (BIS 2019: 10). By statistical the paying customer. Financial trading does not require quirk, in 2020 88 per cent of merchandise trade was any money to be presented upfront, nor any units of the also concentrated in North America, Europe, and Asia, commodity supposedly being traded to actually change with their deeply embedded regional trading agree- hands. Therefore, financial trading does not have a geo- ments (WTO 2021b: 108–11). Trade in merchandise graphical character consistent with an explicit move- goods and trade in financial instruments have perhaps ment across space, being at most the depositing of data surprisingly little in common, but this is one thing they within a computer’s memory (see Box 28.2). definitely share. The world’s largest economies dispro- However, even though trading on financial markets portionately dominate both global trade and global has very little by way of an obvious geographical char- finance. The remainder of the chapter asks whether acter, this is not to say that there are no globalization this can be explained purely through brute economic ‘hot-spots’ in finance. Cities like New York, London, strength, or whether it also reflects the same countries’ Tokyo, Singapore, and Hong Kong—increasingly capture of the regulatory norms that govern the charac- Shanghai and Beijing too—are described as ‘world cit- ter of economic globalization. ies’ precisely because they are able to operate as global financial hubs. They are now home to incredibly large Key Points amounts of business. Taking just one example, the average daily turnover on world currency markets alone was $6.59 trillion in 2019. In longhand this was Flows of trade and finance have become markedly bigger since the take-off stage to globalization began. $6,590,000,000,000 of business conducted every day Analytical care should be taken about the precise senses in which trade and finance are labelled ‘global’. of that year. This was by far the largest figure ever recorded in Bank for International Settlements trien- The increase in world trade since 1970 is dramatic, with much of this being accounted for by the process of nial reports. It was only in 2001 that the symbolic figure regional economic integration. of $1 trillion per day was first passed, but it has taken little more than three years since then for each supple- Increases in merchandise trade may have reached a plateau since the 2010s, but increases in financial activity mentary $1 trillion to be added to the total (BIS 2019: show no signs of slowing down. 9). This means that the dollar value of currency trading 28.3 The regulation of global trade The 1944 Bretton Woods Conference brought together the Western world that would negate any chance of 44 soon-to-be victorious Allied countries. Its goal returning to the depression conditions of the 1930s (see was to design a post-war governance structure for Ch. 16). The new Keynesian economic theory of that  Chapter 28 Global trade and global finance 447 time suggested that it was output rather than prices rounds took more than a year to complete, whereas that adjusted to global imbalances in trade, thus forcing the Uruguay Round that began in 1986 ballooned to national economies into a repetitive cycle of reduced over seven years. Its members subsequently passed production and job losses. The subsequent blighting provisions to formally shut down the GATT, replac- of lives through unprecedented levels of unemploy- ing it in 1995 with a permanent multilateral institution ment preceded the embrace of fascist ideologies in designed to embed free trade norms in international many European countries, and British economist John law—the World Trade Organization. Since then, this Maynard Keynes was determined that the structure of body, with its emphasis on enhancing the extensity of global trade be stabilized to prevent political history trade globalization, has been formally charged with from repeating itself. overseeing the regulation of import/export activities. His priority was to create a multilateral institution However, the WTO has also proved to be a far from that would facilitate the continual expansion of global perfect institutional fix, with political tensions remain- trade. The proposed institution was to be called the ing high in the global trade regime and the objective of International Trade Organization (ITO). However, genuinely enhanced extensity of global trade remain- concerted dissent in US domestic politics meant that ing out of easy reach. Many developing countries’ expe- President Harry Truman did not even bother sending rience of a previous form of globalization involved their the final bill to Congress for ratification. It was deemed occupation by one of Europe’s imperial powers, and the too interventionist for US politicians’ tastes, because diktats handed down by global governance institutions it would have introduced common standards in areas often feel like an alternative form of colonization from such as labour and the environment in an attempt to their perspective. The WTO’s major players themselves create a genuinely level playing field for import/export are constantly looking for ways to turn their political activities. In the 1940s the United States was by far domination of its decision-making structures into fur- the world’s largest exporter, accounting for around ther self-interested gains, each of which is likely to be a quarter of total global exports (WTO 2017b: 100), interpreted by developing countries as a ratcheting up and so an ITO without the US was deemed unthink- of the WTO’s colonizing mission. Moreover, as popu- able. The plans for its introduction were therefore hast- list nationalist agendas have gained a foothold among ily dropped, leading to the establishment instead in many WTO members, the whole principle of multilat- 1947 of the General Agreement on Tariffs and Trade eralism is under attack, and we see increasing evidence (GATT). At no stage since has the world got closer than of countries now seeking bilateral solutions in the the failed ITO proposals for genuine multilateral regu- sphere of global trade to what previously would have lation of trade-related labour and environmental stan- been multilateral questions. dards. Commercial actors have generally been allowed None has gone as far as Trump, the self-styled master to self-regulate on these issues within the context of of the deal, in describing the agreement through which rather thin domestic legislation. Most recently, the asset the WTO came into existence as ‘the single worst trade management industry has begun to act as if it might be deal ever made’ by the United States (Micklethwait, the most important global regulator of environmental Talev, and Jacobs 2018). However, there have been standards (see Opposing Opinions 28.1). plenty of murmurings about whether the whole sys- The GATT was always unable to provide a negotiat- tem of multilateralism that the WTO was founded to ing context in which the full complexity of trade-related support is compatible anymore with securing national issues could be considered holistically. It was largely interests within international trade. The objections limited to fostering technical agreements on how tar- from other countries seemed more perfunctory than a iff concessions agreed bilaterally could be extended to matter of principle when Trump signed executive orders third countries. Despite some obvious progress in this very quickly after his inauguration to strike down leg- regard in eight completed rounds, by the 1990s the islation that paved the way for the completion of two GATT had become largely unsuited to the purpose for major multilateral trade treaties: the Trans-Pacific which it was designed. It became increasingly unwieldy, Partnership (with 11 Pacific coastline countries) and the with each influx of new entrants into the international Transatlantic Trade and Investment Partnership (with, trade system following the process of decolonization at the time, 28 EU member states). This sequence of multiplying exponentially the number of third-country events shows how much the tide of political acceptance agreements that had to be struck. None of the first five seems to be moving against the WTO. The negotiations 448 matthew watson Opposing Opinions 28.1 Wealthy investment funds can be relied upon to enforce environmentally responsible global corporate behaviour For Against Asset management is a multi-trillion dollar business, with It is the profit motive that has licensed all sorts of environ- the largest twenty firms alone controlling over $50 trillion mentally degrading economic behaviour in both the recent in assets. Asset management firms can thus use their substan- and not-so-recent past. Is it not overly optimistic, then, to assume tial ownership stakes to align other companies’ money-making that asset management firms can unilaterally impose a greening of activities to their own principles of increased environmental the profit motive on other companies for the first time in history? responsibility. The founding manifesto of the modern market mentality Global governance institutions have worked since the 1970s was Milton Friedman’s famous 1970 paper, which said that to embed the market mentality as the basis for all economic the corporation’s only social responsibility was to make activity. As this is now a pervasive economic mindset, it makes money. It is therefore the market mentality itself that has under- sense to try to harness it to tackle problems of climate change mined states’ environmental regulations by telling corporations when state-based solutions have failed. that their governments have no right to interfere in their activities. Corporate social responsibility commitments to being High finance’s sudden conversion to confronting climate good environmental citizens have proved to be nothing change might also be viewed as a PR-friendly commitment more than a fig leaf. With increasing evidence that the world to the principles of corporate social responsibility. Asset has long since entered the climate emergency phase, asset management firms compete against one another for scarce management firms can provide global public goods by remov- investment funds in a market already close to saturation. What ing corporate managers who fail to respond appropriately to better way to attract a new generation of investors who have emergency conditions. grown up in an era of enhanced environmental awareness than by signalling a virtuous approach to climate change? Asset management firms have asked to be judged on their record. This will prove, they say, whether there is more to their The current environmental record of asset management firms sudden interest in environmental issues than an attempt to is patchy at best. A cycle seems to be apparent. First, asset managers greenwash their own reputations. They are adamant that they capture column inches for positively received announcements on cli- are the best-placed market actors to punish through investment mate change; some time later it is pointed out that their public com- strikes management attitudes that are antithetical to driving out mitments to environmental-activist investment are not reflected in corporate-induced environmental harms. their actual investment activities; and only then do they begin to inch in practice to where their rhetoric suggests they were already located. 1. Is the fact that this proposal is being taken seriously an admission that multilateral efforts coordinated by the United Nations to tackle environmental problems have failed? 2. Why might governments find it tempting to allow investment funds to impose stricter environmental standards on firms rather than doing so themselves? 3. Should the power of money be relied upon to determine the environmental future rather than reaching democratic decisions about what to do next? Visit the online resources to discover pointers to help you tackle these questions. for the Trans-Pacific Partnership and the Transatlantic Set against this backdrop of increasingly aggressive Trade and Investment Partnership had been initiated nationalist power politics, the WTO can seem relatively by previous US administrations concerned that the impotent when all it can do in response is to restate its WTO’s formal one-member-one-vote rules introduced mission using abstract economic theory. It has always too many potential veto players who might frustrate US prided itself on serving the interests of all its mem- commercial interests. They were then summarily dis- bers equally by enshrining the single economic logic of missed as a new administration set its sights on impos- comparative advantage. This is about attempting to ing US will by forcing weaker countries to negotiate take overtly nationalist displays out of trade politics by with it directly in one-to-one forums. encouraging countries to concentrate their economic  Chapter 28 Global trade and global finance 449 but these sectors show up less than any other in the Box 28.3 The most favoured nation WTO’s free trade agreements. It has therefore been far principle more successful in ensuring comprehensive coverage The most favoured nation principle provided the bedrock of in its membership than comprehensive coverage of its GATT negotiations, being formally laid down in GATT Article I. members’ interests. It has failed to persuade advanced It states that any preferential trading agreement reached with industrialized countries to expose their agriculture and one country should be extended to other countries. The aim— textiles sectors domestically to direct competition from which also continues to be the case under the WTO system— was to disqualify members from using asymmetric tariffs in low-cost developing country producers. Instead, they order to impose higher trading costs on some countries than have been allowed to retain a complex structure of sub- on others. It is hoped that this will enable a higher propor- sidies and tariffs that contrasts sharply with established tion of world GDP to be traded globally because level playing WTO law in nearly every other sector. field conditions will prevail. The principle has been distorted, By contrast, the WTO has proved to be extremely however, by the move towards regional trading blocs, as per- effective at removing government subsidies that arti- mitted under GATT Article XXIV and also rolled over into the WTO’s founding principles. Such arrangements allow countries ficially reduce home producers’ costs of production to set lower tariffs for their in-bloc trading partners than for relative to overseas producers’ costs. It has been equally countries outside the bloc. This is why some globalization pur- effective at removing tariffs that artificially inflate ists argue that regional trade agreements are an impediment to overseas producers’ prices relative to home produc- genuine economic globalization. ers’ prices. It has also been successful in preventing developing countries from producing generic versions of products whose patents are defended by intellec- activities on what they can produce most efficiently. If tual property law. In all of these instances, the ensuing they then freely trade their surpluses on this special- absence of protective national legislation works to the ized production under the most favoured nation prin- advantage of advanced industrialized countries. ciple (see Box 28.3), the possibility exists for everyone This should provide reason to stop and think about in the world to benefit from falling consumer prices. the figures reviewed in Section 28.2. They show that However, it has been relatively easy for populist nation- the value of world merchandise exports rose from $3.7 alists to ignore the WTO trying to lecture them on trillion in 1993, the year in which the GATT Uruguay matters of economic theory because the WTO has long Round finally concluded before ushering in the WTO been accused of failing to practice what it preaches. era, to $19.6 trillion at its current peak in 2018. At first Proponents of a more equitable distribution of the glance this more-than-fivefold increase in just a quar- gains from economic globalization have said since its ter of a century looks like a stunning achievement, inception that it is much better at protecting its most but it only tells part of the story. It is necessary to be powerful members’ interests, showing little anxiety aware that the same headline figure could have been about leaving its less powerful members out in the cold. approached from many different directions. That same The more that it has moved to add further issue-areas increase could have been secured by prioritizing the to its responsibilities—including trade in services and liberalization of agriculture and textiles and doing lit- trade in intellectual property—the louder the critical tle to discourage developing countries from producing voices have grown. generic versions of patented products. But it was not. The WTO’s scope is extremely impressive. It cur- For all that every increase in the value of world trade rently has 164 members, who in aggregate account for looks like a good news story, the fact that it reflects in over 96 per cent of global GDP and global trade. It has practice the further entrenchment of advanced indus- a further 25 observer governments working towards trialized economies’ interests in the very way in which satisfying conditions for membership, and only a the WTO operates allows a very different counter-story tiny fraction of the world’s economic activity is con- to be told. ducted in countries that have so far shown no desire Developing countries’ incentives for WTO mem- to join. Developing countries constitute a majority bership often lie less in direct welfare gains resulting at the WTO, with over 20 per cent of members hold- from enhanced export earnings than in other mecha- ing the United Nations designation of least-developed nisms. Most developing countries have fragile public country. Agriculture and textiles dominate the major finances, and they depend for their continued financial export goods for almost all least-developed countries, viability on the capacity to source inward capital flows 450 matthew watson from the global financial system. They consequently increasingly dominated by the need for applicant states need to secure a positive assessment of their economic to make concessions to more powerful countries that outlook in the regular country reports written by the become, in effect, their political taskmasters. That International Monetary Fund and the global credit same subordination is then imprinted into the WTO’s rating agencies. This in turn depends on finding ways decision-­ making processes. Votes are not taken on of assuring global investors that the rule of law is suffi- individual measures to build up incrementally a body ciently established to prevent the state from appropriat- of international trade law that is acceptable to a major- ing overseas financial investments, such that the success ity of WTO members, as would be expected under a of those investments will be determined solely by mar- genuinely participatory system. Instead, at every minis- ket mechanisms. Membership of the WTO guarantees terial meeting members must decide whether to accept not only that its specific free trade rules are internal- on a take-it-or-leave-it basis a package of reforms called ized, but also that its broader market-based mindset the Single Undertaking, a package largely agreed in permeates the general national approach to issues of advance by those who can afford to maintain the larg- macroeconomic management. For many developing est permanent delegations in Geneva. countries, then, joining the WTO is a signalling device designed to reassure global investors that any money committed to their country is likely to remain safe. Key Points Decisions to apply for WTO membership are therefore infused with global power relationships. Being able The move to disband the GATT in favour of the law-making WTO was an attempt to create more straightforward to show that they are WTO rule-takers is much more negotiations for global free trade by eliminating the important to developing countries than they are to its logjams associated with complexly cross-cutting overall outlook. bilateralism. The more powerful WTO members know this only too well, and they have increasingly used the acces- The WTO system has always operated asymmetrically to the advantage of its agenda-setting members. sion process to impose ever more stringent conditions on entry for new members. The most recent entrants Developing countries’ decisions about whether to become members of the WTO are often influenced heavily by the have been required to harmonize many of their eco- political pressures placed on them to demonstrate their commitment to the existing global economic order. nomic laws with those of existing members, irrespec- tive of whether it makes economic sense domestically The WTO faces an uncertain future as its most powerful members have recently shown an increasing willingness to for them to do so. Consequently, the accession pro- bypass it in favour of bilateral trade negotiations. cess has steadily become longer and costlier, and it is 28.4 The regulation of global finance The regulation of global finance has none of the demo- prefer to present themselves as delivering purely tech- cratic pretensions associated with the WTO’s (nonethe- nical help to countries in economic distress. Yet their less much-criticized) one-member-one-vote system. willingness to embrace the use of c­ onditionalities as In the main, expert rather than political communities a prerequisite for loans immediately politicizes their decide the contents of global financial regulation, and its activities (see Ch. 27). Just as with the new accession objectives are determined almost solely by the countries demands placed on potential WTO members, IMF and that finance the maintenance of the regulatory system. World Bank conditionalities create a context in which The International Monetary Fund and the World Bank national politicians have often had to ignore their elec- are the two principal bodies in this respect, both dating toral mandates and sacrifice their domestic political back to the original Bretton Woods agreements of the legitimacy in order to satisfy the institutions’ demands 1940s. The formal task of the IMF is to provide short- (see Box 28.4). term monetary assistance to countries struggling with Concerted political dissent has followed from allow- financial instability, that of the World Bank to provide ing financial market actors unrestricted scope to invest longer-term monetary assistance to countries seeking their money in the ways they choose, as this has resulted enhanced development prospects. Both institutions in further concentrations of wealth in the hands of the  Chapter 28 Global trade and global finance 451 The imposition of austerity measures to fund bank Box 28.4 The controversies surrounding bailouts has created a breeding ground for populist political conditionalities nationalist politics. It has fed accusations from the IMF and World Bank conditionalities are so named because right that the world economy is now rigged to favour a they ensure that countries qualify for financial assistance not shadowy global elite who owe no loyalty to any coun- only on the grounds of their need, but also on the condition try and whose wealth is made at the direct expense of that they follow the policy objectives laid down by the institu- the national community. The world is thus divided in tions. This allows IMF and World Bank officials appointed in Washington for their technical expertise to appropriate the political terms into ‘us’ and ‘them’, people who look power of policy determination from governments, whatever and think like we do versus those who can never be those governments’ democratic mandates. The Bretton Woods considered part of the national in-group. In this way, institutions have often been reproached for selecting policy the whole rationale for wishing to act multilaterally is objectives drawn only from within the ideological perspec- dissolved. tive of Western free market capitalism, thus destroying local It is ironic that the critique of a rigged economic economic customs and traditions in preference for globally homogeneous neoliberal economic lifestyles. The techni- system that has helped to propel right-wing populist cal expertise their officials display typically reflects Western nationalism originated with the pro-development left’s assumptions, priorities, and interests. In this way, critics allege anti-globalization campaigns of the 1990s and 2000s. that the Bretton Woods institutions operate as covert agents of Those campaigns were not against globalization in all Western foreign economic policy, preparing developing coun- of its conceivable forms, as today’s right-wing populist tries for investment by Western firms by making them seem more ‘familiar’, both legally and culturally. nationalists’ campaigns so often are. Rather, they were a rejection of the particular shape that economic glo- balization was taking at the time, one where the insti- already well-to-do. The overall logic of redistribution tutions of global economic governance became the in the post-war Keynesian era was from rich to poor, most visible formal symbols of how developing coun- but since the first attempts were made in the 1970s to tries were always required to subordinate themselves re-establish a framework of self-regulating financial to Western economic interests. The IMF and the World markets, that logic has been completely reversed. In Bank were accused of having run roughshod over the general, market self-regulation is a rich person’s play- representative function of democracy to impose every- ground. Nobody has ever made money from correctly where what was never more than a minority neoliberal reading the price signals emitted by financial markets if vision of the world. they have no money to invest there in the first place. All If that was true then, though, is it still true today in the speculative gains go to those who are rich enough light of the IMF’s actions post-global financial crisis? It to play in the casino. However, as the fallout from the consistently criticized governments it believed had pri- global financial crisis demonstrated, the people who oritized the austerity solution to imbalances in public benefit so handsomely when financial markets seem finances for purely ideological reasons. Its pleas may to be a source of never-ending new wealth do not also have been ignored by those governments that seized on shoulder the costs when their bets go bad. As one pri- the economic difficulties created by the global financial vate financial institution after another proved that crisis to try to shrink the size of the state in line with it was ‘too big to fail’—in the sense of being likely to the political prescriptions that emerged following the take down the whole system if its debts were allowed crisis of the 1970s. But the IMF’s advice has been clear: to spread unchecked throughout the market environ- welfare-enhancing programmes are not the expensive ment—Western governments provided bailout pack- luxury that pro-austerity discourse routinely depicts ages of unprecedented scale. The profits from financial them to be; rather, the benefits system guarantees a trading are always privatized; however, as here, the greater number of people viable incomes, with wide- losses are so often socialized. As austerity dominated ranging positive macroeconomic consequences. the policy-making environment in the decade follow- The IMF was also the only one of Greece’s credi- ing the global financial crisis, people who never stood tors to protest the terms of the eleventh-hour agree- a chance of becoming rich on the back of the finance ment that was designed to forestall imminent default industry’s prior successes were made much poorer on the country’s debt during the summer of 2015. when governments retrenched their social spending to Eurozone finance ministers had been engaged in dip- pay for its failures. lomatic brinkmanship with Greek negotiators ever 452 matthew watson since the advent of the avowedly anti-austerity Syriza regulator of heavily restrictive capital controls in which government in January of that year. Its mandate from trade could flourish. It is somewhat ironic that the voters was to secure a degree of debt forgiveness and WTO system now arguably serves the opposite func- to restructure the repayment terms of the remain- tion. Given that a primary reason for WTO member- ing loans from the so-called Troika: the European ship for developing countries is as a signalling device Commission, the European Central Bank, and the to international investors, it can now be seen as a trade IMF. It had originally run for election on a promise regulator assisting in the maintenance of the financial that a definite limit would be placed on scaling back regime. the welfare system in order to meet creditors’ demands, This role reversal demonstrates clearly that the and a snap referendum on the bailout terms on 5 July political settlement which cast finance as the servant 2015 reinforced its political mandate to continue to ask to the rest of the world economy was only short-lived. for more favourable terms. Ultimately, though, Alexis In a series of steps between 1971 and 1973, the Nixon Tsipras, the Syriza Prime Minister, steered a barely administration first backed the US away from its cur- better deal through the Greek Parliament less than a rency responsibilities in the Bretton Woods system and fortnight later. The IMF remained critical of the deal, then formally reneged on them altogether. The sys- arguing that the new austerity path would prove unsus- tem relied on US dollars being available freely in the tainable. The supposed global watchdog of financial world economy at a fixed rate relative to the price of market orthodoxy has thus proved once again to be less gold, which had the effect of fixing all exchange rates willing to play the policing role than many of the gov- with respect to one another. Once the Nixon admin- ernments it is meant to be monitoring. Throughout the istration had allowed the value of the dollar to be set eurozone debt crisis, the European Commission, the by global financial market activity rather than by gov- European Central Bank, and many eurozone countries’ ernment commitment to currency pegs, all currencies political leaders said that Greece—along with the other eventually floated against one another. As soon as this crisis-hit countries, Ireland, Portugal, Italy, Spain, and happened, incentives arose for the advanced industri- Cyprus—had no other choice but to face up to a market alized countries to dismantle their capital controls in ‘reality’ that the IMF insisted was negotiable. an attempt to attract flows of finance from elsewhere in The academic literature focuses largely on the IMF’s the world economy. This they duly did, and the shackles and World Bank’s controversial period of rampant pro- that Bretton Woods had placed on global finance were market advocacy in the 1980s and 1990s. While this undone (see Chs 2 and 16). Today’s experience of an is understandable, recent events have shown that it is increasingly politically assertive financial sector origi- also important to remember that they had a distinc- nates from this time. tive history both before and after that time. As formally inscribed in the original Bretton Woods agreements, for instance, the priority of global economic governance Key Points following the Second World War was to stimulate free market flows of traded goods rather than to stimulate free market flows of finance. The successful long-term There is much more ‘money’ in the world today than goods to spend it on: the dollar value of total domestic development that the World Bank was intended to financial assets vastly exceeds that of world GDP. oversee was assumed to be the outcome of stable trad- Under the Bretton Woods system of the immediate post-Second World War era, finance was stripped of its ing conditions. In an attempt to enhance such stability, global mobility and generally boxed in by political decree obstacles in the form of capital controls were placed so that it would serve the interests of stable global trade on the movement of finance among countries and relations. defended by the IMF. Today’s excessive paper trad- ing of increasingly complex and increasingly abstract The institutionalized power of global finance has led to a regressive redistribution from the 1970s, through which financial instruments was completely unthinkable the global rich have become significantly richer and the under the remit of the original Bretton Woods agree- global poor have been increasingly marginalized. ments. Market self-regulation of finance was formally There are now many activist groups challenging the influence of global financial elites, especially their use of disqualified in this period. In effect, the IMF was ini- offshore financial centres to hide their money from tially designed as a subsidiary regulator of global trade. domestic tax authorities (see Case Study 28.2). At the very least, in its day-to-day activities it was the  Chapter 28 Global trade and global finance 453 Case Study 28.2 Biden’s proposed global minimum corporate tax rate correct can reduce the effective rate of profit in high-tax jurisdic- tions to zero, transferring all the declared profit to low-tax jurisdic- tions. The successful introduction of a global minimum corporate tax rate would abolish such tax haven effects, allowing countries to recoup much of the more than $400 billion the Tax Justice Network calculates is lost each year through tax abuse. To put this figure into perspective, it is the same amount annually that China promised in a 2021 bilateral deal to invest in Iran over the next 25 years to secure a guaranteed supply of oil for its economy. It has long been argued that tax havens are parasitical upon development programmes because they make it impossible to Tax havens have thrived collect enough tax to pay for them. If the Biden proposals are © ProStockStudio / Shutterstock to successfully reinvigorate development spending in a post- Covid-19 world, they must also confront another generally In March 2021, US President Joe Biden saw his $1.9 trillion coro- accepted claim about tax havens: that it takes only one renegade navirus relief bill receive Congressional approval. The massive jurisdiction to free-ride on a multilateral agreement on tax to stimulus package was designed to both put the US economy back render the agreement completely unworkable. Biden’s gamble on its feet following the Covid-19 shock and counteract the social is that coordinated support from the world’s largest economies disparities that the pandemic revealed. In an attempt to make his will enforce compliance on everyone else because firms will be spending plans affordable, Biden submitted to tax negotiators at reluctant to risk being excluded from the most lucrative con- the Organisation for Economic Co-operation and Development sumer markets by continuing to conduct their tax affairs in ren- proposals for a global minimum corporate tax rate. This would egade states. But will this be enough? Tax havens have thrived be binding on all OECD members, the type of multilateral fix for partly on exploiting legal loopholes that allow economic activity gaping holes in the global economic system that was so obvi- to be declared as non-taxable, and partly on the threat that there ously missing during the Trump era. is an inexhaustible supply of further loopholes that they have not For many years now, multinational corporations have been even begun to explore yet. If such threats are credible, will tax busy building elaborate structures of profit-shifting. They have havens always remain one step in front of the regulators? learnt how to declare profits resulting from their economic activities in a different jurisdiction to those in which the activities Question 1: Is it in the interests of all countries to support plans themselves take place. Relatively simple accounting techniques for a global minimum corporate tax rate? are used to register in low-tax jurisdictions shell corporations to manage the firm’s intellectual property, with the shell corpora- Question 2: Does the moral case against tax avoidance reinforce tion then charging the parent company huge fees to use its own Biden’s economic case for providing certainty within the global intellectual property in high-tax jurisdictions. Getting these sums tax arena? 28.5 Conclusion The most notable tendency since the 1970s has been themselves more symptoms than causes of a creaking the move towards market self-regulation sustained by system. Wherever we look, we see evidence of liberal a rules-based international order. However, that order rules being ignored and faith in order being under- is currently showing signs of unprecedented stress. mined: whether that is in relation to the failure of the Certainly, politicians’ optimistic claims from the 1990s West’s strategic mission in Afghanistan, the collapse and 2000s that the world was settling into a period of of the Iran nuclear deal, or Russia giving ample warn- liberal hegemony under the influence of economic glo- ing of its intentions in Ukraine by annexing Crimea; balization now look to be hopelessly naive. This is much the refusal to abide by the international law of the sea more than Trump getting himself elected and tak- and help all people in distress, the construction of ing a rhetorical, and at times legal, axe to rules-based border walls to discourage refugee movements, or the multilateralism. It is also more than Putin ordering Myanmar military enacting genocide on the country’s Russian troops over the border into Ukraine. Trump’s Muslim Rohingya people seemingly with impunity; unexpected electoral success and Putin’s willingness to indiscriminate trade wars, the sacrifice of national contravene international law quite so egregiously were democracy in the face of bond market attacks on public 454 matthew watson finances, or the inability to tax profits at source. No suggest that the simultaneous market self-regulation international order has ever achieved total accommo- of trade and finance might always produce instabil- dation from all of its participants, but the current rules- ity, irrespective of what is happening politically. The based liberal international order might be entering a complementarity of regulatory forms is not neces- stage where the exceptions outnumber the norms. sarily synonymous with an internally coherent regu- In this context, the preferred stance of the institu- latory system. Attempting a fifty-year experiment to tions of global economic governance is still to promote introduce market self-regulation in both global trade market self-regulation whenever possible. This is gen- and global finance is perhaps a perfect case in point. erally more thoughtfully applied and implemented Regulatory coherence typically arises only when there in a more nuanced manner than was the case in the are overarching economic regime features that impose heyday of economic globalization. However, mar- institutional constraints on one sphere so as to facili- ket self-regulation of global trade and global finance tate regulatory effectiveness in the other. This was the appears to have been increasingly robbed of its sup- case with the initial Bretton Woods agreements in port structure of respect for international rules. The the 1940s, but that might prove to have been a high foundations of the global economic system therefore water mark for global economic regulatory coherence. currently look to be very shaky, and this is before ask- The modern era of economic globalization has always ing whether that system is generically crisis-prone failed to meet such a standard. The more recent rise even when the foundations seem secure. The fre- of populist nationalism has merely made underlying quency and the sheer familiarity of economic crises regulatory incoherence more marked. Questions 1. Is it significant that economic ‘globalization’ has never been genuinely global? 2. Why does the current structure of global economic governance provoke such resentment among political activists from both left and right? 3. How did the failure of the International Trade Organization impact subsequent attempts to tie trade globalization to the introduction of progressive social conditions of production? 4. Has the WTO failed in its mission to promote a symmetrical trade globalization that benefits all countries? 5. Who stands to gain if the US, the EU, and China go it alone and sign ever more bilateral trade treaties rather than engage multilaterally? 6. What priorities would you set for the IMF and World Bank today? 7. How have governments managed to substantially increase their spending to avoid an all-out economic crash during the Covid-19 pandemic when they used to tell us that all-powerful financial interests would not allow anything other than balanced budgets and austerity measures? 8. In so far as finance was the servant of world trade under the original Bretton Woods agreements, is it now unequivocally the master? 9. How have populist nationalists exploited dissatisfaction with the rules-based liberal international economic order to their own advantage? 10. Is a ‘new Bretton Woods’ necessary if regulatory coherence is once again to be achieved between the spheres of global trade and global finance? Visit the online resources to test your understanding by trying the self-test questions. Visit the online resources to apply theory to practice and take part in the simulation ‘Negotiating with China’.  Chapter 28 Global trade and global finance 455 Further Reading Blyth, M., and Lonergan, E. (2020), Angrynomics (Newcastle: Agenda). Highly readable account written in dialogical form of the anger that has followed the perception that the economy fails to serve the needs of ordinary people. Bullough, O., Shaxson, N., Obermayer, B., and Obermaier, F. (2020), Moneyland; Treasure Islands; The Panama Papers—Collection Set (London: Profile; Vintage; Oneworld). Three separate books rereleased as one collection, where investigative journalists take the reader deep into the heart of the legally and morally dubious world of tax havens. Clift, B. (2018), The IMF and the Politics of Austerity in the Wake of the Global Financial Crisis (Oxford: Oxford University Press). The most comprehensive account of the IMF’s changing thinking over the past decade. Crouch, C. (2011), The Strange Non-Death of Neoliberalism (Cambridge: Polity Press). Challenges the reader to understand how, with the world so much in flux in the midst of the global financial crisis, so little actually changed. Helleiner, E. (1994), States and the Reemergence of Global Finance: From Bretton Woods to the 1980s (Ithaca, NY: Cornell University Press). Over 25 years old, but still the best political history of the process through which governments negotiated away the capital controls of the original Bretton Woods agreements. Killick, A. (2020), Rigged: Understanding ‘the Economy’ in Brexit Britain (Manchester: Manchester University Press). Provides very important ethnographic detail of how people rationalize their economic aspirations and fears when they are allowed to speak for themselves rather than have political, economic, and academic elites speak on their behalf. Milanovic, B. (2019), Capitalism Alone: The Future of the System that Rules the World (New York: Belknap). A provocative account of how the system of global trade and global finance might survive its current uncertainties, written by a former lead economist in the World Bank’s research department. Watson, M. (2018), The Market (New York: Columbia University Press). An account of how the conceptual abstraction of ‘the market’ has wrongly been given its own agential characteristics in contemporary political discourse surrounding global trade and global finance. Visit the online resources to access the latest updates in the field of International Relations.