ABSTRACT
The era of British hegemony, comprising most of the nineteenth century, confounds both liberalism and realism. The liberal second globalization was not engineered by British subjects alone, but an international alliance of business interests. Thus author refer to this as the era of free trade hegemony, abandoning the more narrow term, British hegemony. The major contradiction of the free trade era, the second globalization, was that the combination of freer trade and a bearish gold standard to secure the payments system led to persistent deflation that undermined the balance between debtors and creditors. The biggest difference between trade during the mercantile era and after 1815 is that trade was increasingly governed by multilateral principles rather than the monopolistic power of specific national mercantile companies. Multilateralism is the core of liberal trade theory. Freer trade within Europe itself proceeded gradually until the mid-century. The first big step was the repeal of the Corn Laws by British liberals in 1842.
