The Great Convergence
Information Technology and the New Globalization
An Economist Best Book of the Year
A Financial Times Best Economics Book of the Year
A Fast Company “7 Books Microsoft CEO Satya Nadella Says You Need to Lead Smarter”
Between 1820 and 1990, the share of world income going to today’s wealthy nations soared from twenty percent to almost seventy. Since then, that share has plummeted to where it was in 1900. As the renowned economist Richard Baldwin reveals, this reversal of fortune reflects a new age of globalization that is drastically different from the old. The nature of globalization has changed, but our thinking about it has not.
Baldwin argues that the New Globalization is driven by knowledge crossing borders, not just goods. That is why its impact is more sudden, more individual, more unpredictable, and more uncontrollable than before—which presents developed nations with unprecedented challenges as they struggle to maintain reliable growth and social cohesion. It is the driving force behind what Baldwin calls “The Great Convergence,” as Asian economies catch up with the West.
“In this brilliant book, Baldwin has succeeded in saying something both new and true about globalization.”
—Martin Wolf, Financial Times
“A very powerful description of the newest phase of globalization.”
—Larry Summers, former U.S. Secretary of the Treasury
“An essential book for understanding how modern trade works via global supply chains. An antidote to the protectionist nonsense being peddled by some politicians today.”
“[An] indispensable guide to understanding how globalization has got us here and where it is likely to take us next.”
—Alan Beattie, Financial Times
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.