After Brexit and Trump, I expect more people will listen.
We must reassess the balance between national autonomy and economic globalization. Simply put, we have pushed economic globalization too far — toward an impractical version that we might call “hyperglobalization.”
The transition to hyperglobalization is associated with two events in particular: the Organization for Economic Cooperation and Development’s decision in 1989 to remove all restrictions on cross-border financial flows, and the establishment in 1995, after almost a decade of negotiations, of the World Trade Organization, with wide-ranging implications for domestic health and safety rules, subsidies and industrial policies.
The new model of globalization stood priorities on their head, effectively putting democracy to work for the global economy, instead of the other way around. The elimination of barriers to trade and finance became an end in itself, rather than a means toward more fundamental economic and social goals. Societies were asked to subject domestic economies to the whims of global financial markets; sign investment treaties that created special rights for foreign companies; and reduce corporate and top income taxes to attract footloose corporations.
That is Dani Rodrik in the New York Times.
I am reminded of this EconTalk podcast with MIT’s David Autor, where he talks about his work on the impact of Chinese manufacturing on US workers.
I’m increasingly persuaded that the OECD, NAFTA, the WTO, and so forth, led to a much more rapid change in work and production than anticipated–too rapid for most workers to adjust to. The shift benefited some, especially the previously poor exporting countries, and wealthy white collar consumers like me. Meanwhile, we haven’t any good ways to compensate losers in this sudden shift. Not that they want to be compensated. For the most part they’d probably like to work.
I don’t object to the end state, I see a good argument for going more slowly. I don’t see very many policy prescriptions for doing so, at least ones that are wise to the fact that individual countries will always try to privilege themselves at the expense of their neighbors. I like Dani’s suggested directions. But I don’t see how any new set of rules or negotiations would tackle a fundamental problem: that those with power will use it to advantage themselves.