moderation. for its supporters, globalization is the best way forward for collective global prosperity and welfare. for its critics, on the other hand, globalization is an unmitigated evil. they evoke powerful images, say of sweat shops in developing countries, degradation of the amazon rain forest, erosion of peasant farming in poor economies and acid rain around the world ’ s industrial towns to buttress their argument. like most else in life, this debate too cannot be a binary issue. there is some validity to both sides of the argument, and the best way forward, as we just noted, is to maximize the positives and minimize the negatives. the globalization debate has been broad based straddling several issues and themes. here are some of the important ones : i. globalization exploits the poor and the weak, and destroys traditional livelihoods. ii. it accentuates inequalities within and across nations. iii. it promotes global multinational corporations which, driven entirely by the profit motive, are totally insensitive to the negative externalities they cause. iv. it causes environmental degradation. v. it undermines the sovereignty of the nation - state. i do not propose to visit these issues. this is well - trodden territory and i do not have any comparative advantage to add value to the debate. i do want to address just three questions though. i have chosen these three, in part because they are less familiar themes, and in part because the debates around these issues have been reshaped by some new developments. the three questions that i will address are : i. is globalization inevitable? ii. is geography destiny? iii. can / should financial liberalization be shunned? is globalization inevitable? there is a widely held view that globalization is inevitable in today ’ s world of rapid technological progress and growing embrace of economic liberalization by countries. most people who hold this view think that globalization is a uniquely twentieth century phenomenon and that it is progressing on a linear upward path. that is a misperception. far from being a twentieth century phenomenon, globalization has a long history dating back to the voyages of discovery of the 15th and 16th centuries and colonization by the european powers in the following centuries. colonies have gone, but the trade and commerce spawned by the colonial empires have largely endured. it is also not the case that globalization that started five hundred years ago has deepened on a steady, linear path. on the contrary, it has waxed and waned (

figure – 2 ). bis central bankers ’ speeches figure – 2 source : maddison ( 2001 as the data in figure – 2 show, for about 150 years starting 1870, globalization has steadily deepened, peaking at around the outbreak of the first world war. it declined in the inter - war period, as a result of both changing political equations and the devastating toll of the great depression. this trend reversed after the second world war, with globalization, not only in trade but also in finance, picking up pace over the last six decades ( figure – 3 ). figure – 3 deepening financial integration [ source : crafts ( 2000 ) till 1995 and dataset of external nations available at http : / / www. philiplane. org / ewn. html ( 2009 ) ] wealth of bis central bankers ’ speeches the question is, is there something special about this wave of globalization that sets it apart from past episodes and makes it inevitable and irreversible? the two inexorable forces cited to buttress this argument are technological progress, particularly the improvement in the speed and quality of communication and the dramatic decline in transport costs. it is true that technological progress and declining transport costs offer opportunities for increasing the benefits of trade and strengthen the case for globalization. but the mere availability of opportunities is no guarantee that governments around the world will remain committed to open trade and open finance. that commitment could easily run into sands of political compulsions if a country perceives that it is losing comparative advantage or if the costs of globalization are seen to exceed the benefits. so, a more nuanced position to take would be that although today ’ s globalization is based on a stronger footing because of advances in technology and declining transport costs, political dynamics offer no guarantee that it will move along irreversibly. that takes me to the second question that i want to address, about the threat to globalization arising from political compulsions. is geography destiny? in his best - selling book, guns, germs and steel, jared diamond, an environmental biologist, argues that advanced civilizations originated and developed in eurasia rather than in africa, america or the pacific because the former had the advantage of highly fertile lands and animals that could be domesticated. having developed their agriculture by 1500, europeans used their guns, germs and steel to dominate the rest of the world by military conquest and spread of disease. according to diamond, it is not biology or race that explains the course of world history. rather it