November 10, 2017

TRADE IS DIFFERENT (self-reference alert):

The Trouble With Globalization : Undermined by the false narratives that have destabilized it, globalization is at risk. (Dani Rodrik , October 20, 2017, Milken Review)

Electorates around the world were told not only that globalization was inevitable, but also that it necessarily took the particular form they were witnessing. The nation-state, it was said, was the enemy of globalization, and therefore had to get out of the way. Globalization required ever-stronger global rules mandated by trade agreements, multilateral organizations and international networks of regulators. But not to worry: it would promote economic progress and political harmony, even if not for everyone right away.

None of this was quite true. There is nothing inevitable about advancing economic integration, nor about the route that globalization takes if it does move forward. And contrary to conventional wisdom, nation-states are absolutely essential to globalization because they provide the public services ranging from law enforcement to macroeconomic stabilization that are needed for open markets to thrive. By the same token, global governance is largely superfluous: proper trade, financial, monetary and regulatory policies required to sustain an open world economy do not require much coordination when governments do their jobs well.

One of the central arguments of Redefining Sovereignty was that while conservatives are perfectly right to be hostile to transnational political institutions, economics requires yielding some sovereignty where trade between nations is concerned.  

Posted by at November 10, 2017 8:22 AM