Dani Rodrik: the era of trade agreements is over

After his Cobbenhagen-lecture, Univers spoke with Harvard economist Dani Rodrik about a new globalism.

The last decades, the world seemed to be ever expanding. In the past years, negative effects of globalism have manifested. Dani Rodrik was a fierce critic long before that, in his academic and popular works.

Up to now, globalism seemed to be ever increasing. Now we have BREXIT, Trump, and we realize that globalism causes problems. What kind of world are we moving towards?

“Clearly, the era of trade agreements is over. We’re also likely to see stagnation, but I don’t think there will be a significant reversal from globalization.”

Why do we struggle with globalism?

“Globalism is a means to achieve human satisfaction and better economic progress. I think we’ve gone wrong by treating economic globalization as an objective in itself.”

What kind of globalism would work?

“What I’d like to see is countries pursuing their own interests, because those interests are defined for collectivities. Through political deliberation. That takes place at national states, not globally. We don’t have a global democracy and accountability.”

How would that even work?

“I don’t think there’s a great incompatibility between countries following their own interests and globalization. After all, globalization is supposed to be good for all economies. When we reverse those priorities, we create a cleavage between society that is looking at their political leaders that are responsible for them, and the elites, who are guided by some agenda of furthering globalization.”

Finding a job is increasingly harder. Is globalism to blame?

“It varies from country to country. In the United States we had a combination of technological and trade shocks, that have hit the bottom of the labor market very badly. If you’re a high school dropout in the United States you have done very badly in the last 35 years. Countries like China have been sending goods that you used to be producing. But it’s not just globalization, it’s also technology. Technology has created an increased demand for skills, which these dropouts don’t have.”

Your students can call you uncle Dani. What do you try to teach your students?

“The best thing a teacher can do is stimulate students to think independently and creatively about economic and social problems. I always tell them: what I want to teach you is not what to think, but how to think. I will not give you conclusions, but I will give you the tools that enable you to think on your own.”

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