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This study reexamines the relationship between economic globalization and manufacturing employment in affl uent democracies. After reviewing past research, including the wellsupported Rowthorn model, we propose a differentiation-saturation model that theorizes that globalization has a curvilinear relationship with manufacturing employment. Using two different techniques, we analyze the most comprehensive sample of 18 affl uent democracies from 1960-2001. We examine 12 globalization measures and provide the fi rst analysis of the curvilinear relationship between globalization and manufacturing employment. We fi nd that some aspects of globalization have linear effects on manufacturing employment, most of which are positive. We fi nd more evidence, however, that globalization has a curvilinear, inverted U-shaped relationship with manufacturing employment. The evidence for the Rowthorn model is mixed. GDP per capita and its square do not have robust effects, but agricultural employment is one of the most important causes. Including globalization in the model weakens the evidence for the Rowthorn model. There is some evidence that globalization has different effects across different varieties of capitalism, regions and historical periods. Ultimately, our analyses partially support both the Rowthorn model and our differentiation-saturation model. One of the most dramatic social changes of the past half-century has been the decline of manufacturing employment in affluent democracies. As Figure 1 shows, manufacturing employment as a share of the labor force declined substantially from 1960 to 2001 in the 18 affluent democracies in our study. In the early 1960s, manufacturing employment averaged nearly 40 percent across these countries. In addition, the maximum value countries (Germany and Switzerland) approached 50 percent. Even Ireland, the least industrialized in 1960, had more than 22 percent employed in manufacturing. By 2001, massive deindustrialization had occurred across all 18 affluent democracies. The most industrialized country had fallen to less than 30 percent manufacturing employment, the average was below 25 percent, and the least industrialized country was below 20 percent. Certainly, the widespread decline of manufacturing was not uniformly linear. From 1960 to 1975, the least industrialized countries experienced growth in manufacturing employment – the minimal value rose from 22.2 in 1960 to 28.7 in 1973. During that period, heavily industrialized countries reached a plateau. The maximum value remained above 48 percent until 1971. Partly driven by manufacturing growth in the less industrialized among these countries, the mean peaked slightly above 38 percent in 1965 and remained above 36 percent through

The restructuring of capitalism involved profound changes in the way companies operate, in the integration of markets and in the sphere of state sovereignty. Economic globalization has intensified competition between companies, workers and nations. The hierarchical, dollar-led international monetary order has boosted uneven and combined development. The aim of this paper is to stimulate reflection on contemporary capitalism from the perspective of political economy. The dynamics of financial flows and the increase in wealth stocks have had impacts on macroeconomic management, job creation and income distribution in developed countries. The early deindustrialization of Latin American economies and the consistent industrialization of Asian economies altered the international division of labor and differentiated the capitalist periphery. The financialization of wealth and the empowerment of rentierism have constrained most governments to work towards full employment and social protection. The widespread global value chains and the redefining of the pattern of competition by large corporations have negatively affected unions and the labor market, increasing unemployment (even if in disguise) and precarious labor relations. La reestructuración del capitalismo significó cambios profundos en el modo de operación de las empresas, en la integración de los mercados y en la esfera de la soberanía del Estado. La globalización económica ha intensificado la competencia entre empresas, trabajadores y naciones. El orden monetario internacional jerárquico, dirigido por el dólar, potencializó un tipo de desarrollo desigual y combinado. El objetivo de este artículo es estimular la reflexión sobre el capitalismo contemporáneo desde la óptica de la economía política. La dinámica de los flujos financieros y el aumento del stock de riqueza han tenido un impacto en la gestión macroeconómica, la creación de empleo y la distribución del ingreso en los países desarrollados. La desindustrialización temprana de las economías latinoamericanas y la industrialización constante de las economías asiáticas alteraron la división internacional del trabajo y diferenciaron la periferia capitalista. La financiarización de la riqueza y el empoderamiento del rentismo redujeron la participación de la mayoría de los gobiernos en pro del pleno empleo y la protección social. La difusión de las cadenas globales de valor y la redefinición del patrón de competencia por parte de las grandes corporaciones han afectado negativamente a los sindicatos y al mercado laboral, aumentando el desempleo (incluso disfrazado) y la precariedad de las relaciones laborales. La reestructuration du capitalisme e entraîné de profonds changements dans le mode de fonctionnement des entreprises, dans l’intégration des marches et dans la sphère de la souveraineté des États. La mondialisation économique a intensifié la concurrence entre les entreprises, les travailleurs et les nations. L’ordre monétaire international hiérarchisé, dominé par le dollar, a favorisé um dévelloppement inégal et combine. Le but de cet article est de stimuler la réflexion sur le capitalisme contemporain du point du vue de l’économie politique. La dynamique des flux financiers et la hausse des stocks de richesse ont a eu une incidence sur la gestion macroéconomique, la création d’emplois et la répartition des revenus dans les pays développés. La désindustrialisation precoce des économies latino-américaines et l’industrialisation cohérente des économies asiatiques ont modifié la division internationale du travail et différencié la périphérie capitaliste. La financiarisation de la richesse et l’autonomisation du rentier ont contraint la plupart des gouvernements à oeuvrer pour le plein emploi et la protection sociale. Les chaînes de valeur mondiales répandues et la redéfinition du modèle de concurrence des grandes entreprises ont eu um impact négatif sur les syndicats et le marché du travail, entraînant chômage (même déguisé) et des relations de travails précaires. A reestruturação do capitalismo envolveu mudanças profundas no modo de operação das empresas, na integração dos mercados e na esfera de soberania do Estado. A globalização econômica acirrou a competição entre empresas, trabalhadores e nações. A ordem monetária internacional hierarquizada, comandada pelo dólar, potencializou um desenvolvimento desigual e combinado. O objetivo do artigo é estimular a reflexão sobre o capitalismo contemporâneo pela ótica da Economia Política. A dinâmica dos fluxos financeiros e o aumento dos estoques de riqueza produziram impactos na gestão macroeconômica, geração de empregos e distribuição de renda nos países desenvolvidos. A desindustrialização precoce de economias latino-americanas e a industrialização consistente de economias asiáticas alteraram a divisão internacional do trabalho e diferenciaram a periferia capitalista. A financeirização da riqueza e o empoderamento do rentismo restringiram a atuação da maioria dos governos em prol do pleno emprego e da proteção social. A difusão das cadeias globais de valor e a redefinição do padrão de concorrência de grandes corporações afetaram negativamente os sindicatos e o mercado de trabalho, aumentando o desemprego (mesmo que disfarçado) e a precariedade das relações de trabalho.