ABSTRACT
A most pressing problem before the world community today is that of unemployment and underemployment – the existence of mass unemployment in advanced economies (the North) and the lack of adequate employment opportunities in many developing countries (the South) for their fast-growing labour forces. The emergence of a much more integrated and liberal world economy in the last decade or so as a consequence of globalization and freer movements of capital and trade, has apparently made little contribution towards meeting this global employment challenge. Whether or not one agrees with those who argue that globalization is a part of the problem rather than its solution, it is quite clear that unless people’s legitimate needs for remunerative jobs and productive work can be met, the new liberal international economic order will be in serious jeopardy. As Sir John Hicks observed with respect to the 1930s.
The main thing which caused so much liberal opinion in England to lose faith in Free Trade was the helplessness of the older liberalism in the face of massive unemployment, and the possibility of using import restriction as an element in an active programme fighting unemployment. One is, of course, obliged to associate this line of thought with the name of Keynes. It was this, almost alone, which led Keynes to abandon his early belief in Free Trade.
(Hicks (1959), quoted in Bhagwati: (1994: 233))