Dani Rodrik on globalisation

Free trade, when it's convenient (img: www.nicholsoncartoons.com.au)

Dani Rodrik, the esteemed professor of international political economy at Harvard’s Kennedy School of Government, reveals on the Financial Times what the real threat to globalisation is [via Paul]. No, it’s not an angry crowd protesting in Seattle – although, incidentally, we see few of these scenes these days, as the international financial institutions and the WTO find increasingly secluded resorts on top of mountains or small faraway islands where to meet and plot their next moves. 

It’s those very cheerleaders in Washington, London and elsewhere who have failed to understand that states still need room for manoeuvre when devising their development strategies, upgrading their industrial economies, finding appropriate solutions to their local problems and ensuring that the benefits of development are evenly distributed among the people. The world’s economy – he argues – has never been freer, so no country can complain that its growth prospects are constrained by a lack of openness in trade or capital flows. The real issue is ensuring that the global nature of markets does not undermine the national development and growth objectives of each country. Whether the cheerleaders in Washington, Brussels and London reject this logic because it’s in their interest to keep these countries in abject poverty is purely speculative, although increasingly credible.

Sure enough. Dani is right, as always. But he does forget one important point.

There is a fundamental imbalance in the current structure of world trade, with some sectors, which are crucial for the development of many countries in Africa and elsewhere, still resolutely protected by powerful lobbies in the North. From the EU’s Common Agricultural Policy to the vast subsidies disbursed by the US government to its cotton producers, free trade is applied selectively and unevenly, and can only benefit (if at all) those countries that have an industrial manufacturing base on which to build. For those reliying on agricultural exports, all this talk of open markets is nothing but a joke.

So yes, Dani. Let’s govern globalisation, as Robert Wade would put it. But let’s also ensure that there are some further openings that truly benefit those who need it.


6 responses to “Dani Rodrik on globalisation

  1. sahilvaughan

    I think its important to remember that talk of a global economy applies to a small minority of the worlds population. What we have seen through the 20th and now 21st century is a systematic divorcing of the political from the economic. Globalization, I think, has served (amongst many other things, both good and bad) to create a transnational space for capital, that is independent from political forces and political will. The people that have acess to this transnational space are very few. Thats why the the notion of governing globalization is an important one, it is impossible in this sphere.

  2. sahilvaughan

    oh and is anyone is interested have a blog of similar musings unlearned.wordpress.com

  3. Yes and no. Economic globalisation has in many ways increased inequality worldwide, despite claims of the contrary by the likes of Martin Wolf and his clique at the Financial Times. But this very segmentation – in the words of the great sociologist Manuel Castells – is in itself a proof that globalisation is affecting, directly or indirectly, almost anyone living on this planet and engaged in some form of economic activity.

    Also, I am not sure we can talk of a separation of the economic and the political. By most accounts, the diffusion of globalisation through a series of targeted regulations at national and international level – be it relating to property rights, financial flows, social taxation, or the environment – could not have happened had it not been for the active support of a political elite. The so-called Washington Consensus is not the casual turning of a blind eye over an inevitable process that was going to happen anyway. It’s the sistematic puruit of neo-liberal policies of liberalisation, deregulation and economic integration by the world’s political elites.

    In this sense, globalisation as an economic process cannot be dissociated – especially in the eyes of the political left – with globalisation as a political project.

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