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Not so long ago the nation-state seemed to be on its deathbed, condemned to irrelevance by the forces of globalization and technology. Now it is back with a vengeance, propelled by a groundswell of populists around the world. In Straight Talk on Trade, Dani Rodrik, an early and outspoken critic of economic globalization taken too far, goes beyond the populist backlash and offers a more reasoned explanation for why our elites’ and technocrats’ obsession with hyper-globalization made it more difficult for nations to achieve legitimate economic and social objectives at home: economic prosperity, financial stability, and equity.
Rodrik takes globalization’s cheerleaders to task, not for emphasizing economics over other values, but for practicing bad economics and ignoring the discipline’s own nuances that should have called for caution. He makes a case for a pluralist world economy where nation-states retain sufficient autonomy to fashion their own social contracts and develop economic strategies tailored to their needs. Rather than calling for closed borders or defending protectionists, Rodrik shows how we can restore a sensible balance between national and global governance. Ranging over the recent experiences of advanced countries, the eurozone, and developing nations, Rodrik charts a way forward with new ideas about how to reconcile today’s inequitable economic and technological trends with liberal democracy and social inclusion.
Deftly navigating the tensions among globalization, national sovereignty, and democracy, Straight Talk on Trade presents an indispensable commentary on today’s world economy and its dilemmas, and offers a visionary framework at a critical time when we need it most.
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Straight Talk on Trade Straight Talk on Trade Ideas for a sane World economy Dani Rodrik PR IN CE TO N UNIVER SIT Y PR E SS Princeton and Oxford Copyright © 2018 by Dani Rodrik Requests for permission to reproduce material from this work should be sent to Permissions, Princeton University Press Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540 In the United Kingdom: Princeton University Press, 6 Oxford Street, Woodstock, Oxfordshire OX20 1TR press.princeton.edu All Rights Reserved ISBN 978-0-691-17784-7 Library of Congress Control Number: 2017945414 British Library Cataloging-in-Publication Data is available This book has been composed in Bembo Std Printed on acid-free paper. ∞ Printed in the United States of America 1 3 5 7 9 10 8 6 4 2 To my children Deniz, Odile, and Delphine, who replenish my faith daily that the world will become a better place CONTENTS Preface ix chapter 1 A Better Balance 1 chapter 2 How Nations Work chapter 3 Europe’s Struggles 48 chapter 4 Work, Industrialization, and Democracy 79 chapter 5 Economists and Their Models chapter 6 The Perils of Economic Consensus 139 chapter 7 Economists, Politics, and Ideas 159 chapter 8 Economics as Policy Innovation 181 chapter 9 What Will Not Work c h a p t e r 10 New Rules for the Global Economy 222 c h a p t e r 11 Growth Policies for the Future 239 c h a p t e r 12 It’s the Politics, Stupid! Acknowledgments 275 Notes 281 Index 301 15 114 202 267 PR EFACE Are economists responsible for Donald Trump’s shocking victory in the US presidential election? Economists might only wish they have the kind of power it takes to determine elections. But even if they may not have caused (or stopped) Trump, one thing is certain: economists would have had a greater—and much more