“One of the crucial challenges” of our era “is to maintain an open and expanding international trade system.” Unfortunately, “the liberal principles” of the world trade system “are under increasing attack.” “Protectionism has become increasingly prevalent.” “There is great danger that the system will break down … or that it will collapse in a grim […]
The Popular Revolt Against Globalization And The Abdication Of The Left
As the world reels from the Brexit shock, it is dawning on economists and policymakers that they severely underestimated the political fragility of the current form of globalization. The popular revolt that appears to be underway is taking diverse, overlapping forms: reassertion of local and national identities, demand for greater democratic control and accountability, rejection […]
Innovation Is Not Enough
We seem to be living in an accelerated age of revolutionary technological breakthroughs. Barely a day passes without the announcement of some major new development in artificial intelligence, biotechnology, digitization, or automation. Yet those who are supposed to know where it is all taking us can’t make up their minds. At one end of the […]
Brexit and the Globalization Trilemma
I have not written much on Brexit because I do not have a strong or particularly well-informed view of it. My personal hope is that Britain will choose to remain in the EU – but that is as much because of a belief that without Britain the EU will likely become less democratic and more […]
A Progressive Logic Of Trade
The global trade regime has never been very popular in the United States. Neither the World Trade Organization nor the multitudes of regional trade deals such as the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP) have had strong support among the general public. But opposition, while broad, was diffuse. The difference […]
The Politics Of Anger
Perhaps the only surprising thing about the populist backlash that has overwhelmed the politics of many advanced democracies is that it has taken so long. Even two decades ago, it was easy to predict that mainstream politicians’ unwillingness to offer remedies for the insecurities and inequalities of our hyper-globalized age would create political space for demagogues with […]
The Return Of Public Investment
The idea that public investment in infrastructure – roads, dams, power plants, and so forth – is an indispensable driver of economic growth has always held powerful sway over the minds of policymakers in poor countries. It also lay behind early development assistance programs following World War II, when the World Bank and bilateral donors […]
Understanding The Evolution Of Work
In mid-December, the United Nations will launch the latest of its annual landmark Human Development Reports. This year’s report focuses on the nature of work: how the way we earn a living is being transformed by economic globalization, new technologies, and innovations in social organization. The outlook for developing countries, in particular, is decidedly mixed. For most […]
When Financial Markets Misread Politics
When Turkey’s Justice and Development Party (AKP) defied pundits and pollsters by regaining a parliamentary majority in the country’s general election on November 1, financial markets cheered. The next day, the Istanbul stock exchange rose by more than 5%, and the Turkish lira rallied. Never mind that one would be hard pressed to find anyone […]
The Mirage Of Structural Reform
Every economic program imposed on Greece by its creditors since the financial crisis struck in 2009 has been held together by a central conceit: that structural reforms, conceived boldly and implemented without slippage, would bring about rapid economic recovery. The European Commission, the European Central Bank, and the International Monetary Fund anticipated that fiscal austerity […]
Economists Vs. Economics
Ever since the late nineteenth century, when economics, increasingly embracing mathematics and statistics, developed scientific pretensions, its practitioners have been accused of a variety of sins. The charges – including hubris, neglect of social goals beyond incomes, excessive attention to formal techniques, and failure to predict major economic developments such as financial crises – have […]
The Muddled Case For Trade Agreements
With global trade negotiations deadlocked for years, regional agreements – long a dormant route to trade liberalization – are back with a vengeance. The United States is at the center of two mega-deals that could shape the future path of world trade. The Trans-Pacific Partnership (TPP) is further along, and involves 11 countries, besides the US, that […]
TTIP And The War Of Trade Models
There is an interesting debate going on in Europe about the likely consequences of the TTIP (Transatlantic Trade and Investment Partnership). Much of the real debate is (or should be) about the proposed Investor-State dispute resolution (ISDS) and the desirability of regulatory harmonization when nations have different preferences about how these regulations should be designed. […]
Reforming Greek Reform
Greece’s new government, led by the anti-austerity Syriza party, presents the eurozone with a challenge that it has not yet had to face: dealing with national officials who are outside the traditional European mainstream. Syriza is in many ways a radical party, and its views on economic policy are often described as hard left; but […]
From Welfare State To Innovation State
A specter is haunting the world economy – the specter of job-killing technology. How this challenge is met will determine the fate of the world’s market economies and democratic polities, in much the same way that Europe’s response to the rise of the socialist movement during the late nineteenth and early twentieth centuries shaped the […]
Greek Elections, Democracy, Political Trilemma, and all that
Two-and-a-half years ago I wrote a short piece titled “The End of the World as We Know It” which began like this: Consider the following scenario. After a victory by the left-wing Syriza party, Greece’s new government announces that it wants to renegotiate the terms of its agreement with the International Monetary Fund and the European Union. […]
Good And Bad Inequality
In the pantheon of economic theories, the tradeoff between equality and efficiency used to occupy an exalted position. The American economist Arthur Okun, whose classic work on the topic is called Equality and Efficiency: The Big Tradeoff, believed that public policies revolved around managing the tension between those two values. As recently as 2007, when New […]
How The Rich Rule US Democracy
It is hardly news that the rich have more political power than the poor, even in democratic countries where everyone gets a single vote in elections. But two political scientists, Martin Gilens of Princeton University and Benjamin Page of Northwestern University, have recently produced some stark findings for the United States that have dramatic implications for the […]
The Perils Of Economic Consensus
The Initiative on Global Markets, based at the University of Chicago, periodically surveys a group of leading academic economists, of varying political persuasions, on the issues of the day. Its latest roundup asked whether President Barack Obama’s stimulus plan helped to reduce unemployment in the United States. Officially known as the American Recovery and Reinvestment Act of […]
Why The Super-Rich Need Governments
The very rich, F. Scott Fitzgerald famously wrote, “are different from you and me.” Their wealth makes them “cynical where we are trustful,” and makes them think “they are better than we are.” If these words ring true today, perhaps it is because when they were written, in 1926, inequality in the United States had reached heights comparable […]
The West Has Failed To See The Abuses Of The Turkish Regime
Around 300 officers in the Turkish military were jailed in 2010-2011 over an alleged coup to overthrow the Turkish government. The controversy over the arrests is still on-going, with all officers still in jail released earlier this month pending a retrial. In an interview with EUROPP’s editor Stuart Brown, Dani Rodrik discusses the case, the impact it […]