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.