How war stifled the first “globalization” of 1870-1913

If the energy crisis has monopolized people’s minds since the invasion of Ukraine, there is another, enormous one, in the food supply (see also p. 22). And it hits poor countries much harder, where a much larger share of household spending is on food. What is behind this food crisis, symbolized by the increase in wheat prices (see graph)?

Part of the answer is obvious: Ukraine is usually a major agricultural exporter, but it’s hard to continue to play that role when Russia is bombing your rail lines and blockading your ports. But this explanation is not enough. Russia has suspended much of its own grain exports, apparently in an attempt to contain domestic market prices.

Third largest exporter in the region, Kazakhstan did the same.

And then there are fertilizers: its modern production is very energy-intensive. Russia was the world’s largest exporter, which has not been the case since the war. China – another major producer – has also drastically reduced its exports.

All of this undermines agriculture and teaches us the importance of the link between geopolitics and globalization.

Many imagine this process to be relatively recent, but historians are well aware that a first form of globalization emerged between 1870 and 1913.

At the start of the 20th century, the British were already eating Canadian wheat, Argentinian beef and New Zealand lamb. Then geopolitics – wars, the rise of totalitarianism and protectionism – largely stifled this first wave of globalization. Trade only recovered with the post-war establishment of the Pax Americana, and it took nearly forty years for world trade to return to 1913 levels. Admittedly, this first wave of globalization was relatively rudimentary: mainly traded goods manufactured in advanced economies for commodities. Modern value chains now supply electronic gadgets with components from a dozen countries. It is still so easy to obtain them, while the trade in basic foodstuffs such as wheat seems to be badly affected. Old-fashioned globalization appears more fragile than the complex economic ties that developed after 1990.

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