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history, capitalism was directed by mercantilist policies involving state restrictions on imports, and incentives for exports, as a way of increasing national power, concentrated in the political might of the state. In particular, under mercantilism a country was considered prosperous when it had a favorable balance of trade, with ‘favorable’ interpreted as trade yielding a surplus of gold and silver. To achieve this favorable balance, the state intervened vigorously in international relations rather than leaving important economic forces such as trade to be guided solely by the vagaries of the market. Then, in the first half of the nineteenth century, a shift in the class balance of power in the leading capitalist country, Great Britain, led to a change in economic policy. The emerging industrial bourgeoisie was interested in low-cost food imports for workers and expanding export markets for textiles and other products of the Industrial Revolution for which Britain had a clear cost advantage. Yet the British Corn Laws, introduced in 1815, kept food prices high by restricting imports of grains, ensuring high incomes for the landowning class. These laws were repealed in 1846. Only with repeal did capitalism move decisively in the direction of a market-oriented, free-trade regime. Trade liberalization – that is, the freeing of trade from stateimposed restrictions – and the increased integration of national economies that followed, began in earnest with the Cobden–Chevalier Treaty of 1860, an interstate, bilateral agreement to reduce tariffs (state import taxes) on goods exchanged between Britain and France. It was followed by a series of bilateral trade agreements elsewhere in Europe. In the second half of the nineteenth century international trade expanded rapidly, with the global economy becoming more regionally specialized, especially between an industrial core and an agricultural periphery, and more integrated by trade relations and investment flows, than at any time previously and, arguably, more than at any time since, including the globalization of the turn of the twentieth century. With the economic dislocations following the First World War, however, most leading capitalist countries reverted to mercantalist-type protectionism. During the Depression years of the 1930s, arguments that imports ruined domestic industry and increased unemployment made sense to political regimes hard pressed by angry populations. Typically for the period, in 1930 a Republican-dominated US Congress passed the Smoot–Hawley Tariff Act, which increased tariffs on imports by an average of 52 percent. Unilateral increases like