The early twentieth century was an era of global integration, marked by extraordinary flows of goods, capital, and people: indeed some indicators, particularly in regard to capital market integration, show that this was an economy at least as “globalized” as the much touted globalized world of our new century. This essay traces the ways in which the globalized economy was destroyed, in the interwar Great Depression, by policy responses that were not just the product of the First World War and its aftermath, but date from the onset of rapid globalization itself. Can the economics of depression, the outcome of what Jeff Williamson and Kevin O’Rourke have called a “globalization backlash,” be repeated in our time? Economics alone will not explain the extent of the backlash, and the last section of the essay in consequence examines the political character of the reaction. It sets out also to explain why the current backlash against globalization may become increasingly radical.

The devastation of the interwar Great Depression still holds an enormous fascination. Over the past fifty years, whenever an interruption to growth or a threat to prosperity has arisen, people asked themselves whether they were not once more on the brink of a Great Depression.

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