Wpensive In 1919, John Maynard Keynes reflected on how World War I disrupted the first great era of financial globalization. A few years ago, a Londoner could “explore wealth in natural resources and new ventures in any part of the world” with a phone call, while sipping tea in bed. If government bonds were more to his taste than commodities or start-ups, he could “combine the security of his property with the sincerity of the townspeople of the substantial municipalities of the continent, which fancy and information recommend.” right. This ability to share in the world’s wealth creation “without effort or struggle” was part of “this economic El Dorado…this economic utopia” in which Keynes came of age, until the outbreak of war in 1914. Shattered.
More than a century later, a second era of financial globalization has given the day trader’s phone tap a menu of options that rivals Keynes’s fictional gentleman. Although the war is back in Europe, few financial channels have actually been closed. The large-scale shutdown of stock and bond markets that occurred during World War I has not been repeated. Londoners in 2024 can choose one of dozens of stock markets around the world and park their money effortlessly.