Rebecca Lowe Coulson was Parliamentary Candidate for the City of Durham at the 2015 General Election.
In a talk at King’s College London last week, Dani Rodrik, a Harvard economist, argued against accepting the seeming inevitability of ever-closer globalised union. He spoke of the “magnitude of the numbers” in terms of the redistributive cost to less-skilled workers against national economic gains from the hyper-liberalisation of trade. And of the necessity to re-establish a balance: rather than “stepping back” from globalisation, he said, we should “make it safer”.
Rodrik’s focus on domestic need felt welcome at a time when global solutions are all too often touted as the only way forward. I don’t buy the explanation that Brexit – and Trump, and everything else you can think of – was simply the result of a “left-behind” rebellion. But our politicians have a deep moral and political need to regain trust from a divided electorate, many of whom feel that the aggregate gains of the past decades have not been shared fairly.
Rodrik’s lecture publicised his latest book, Straight Talk on Trade: Ideas for a sane world economy, published last month by Princeton University Press. Its neat statistical arguments against unlimited globalisation are refreshing, with well-drawn revelations about distance elasticity, and the ways in which economists have talked down the negatives of ever-extended trade while talking up its positives.
In that Rodrik believes that we can’t have hyperglobalisation, democracy, and national sovereignty all at the same time, he comes down in favour of a model of global governance that would “enhance democracy” rather than enhancing globalisation. This is not least, he argues, because global governance just cannot be strong enough to instill necessary institutional regulation.
Much of Straight Talk isn’t new, however. Rodrik compiled it mostly from his Project Syndicate columns; it draws heavily on two earlier volumes. Many of its central themes were presented in The Globalisation Paradox (2010) – including, somewhat ironically, seven premises outlined in a Straight Talk chapter entitled New Rules for the Global Economy. And the continual emphasis on economists needing to work harder to meet their “public responsibility” is also familiar. In Economic Rules (2016), Rodrik called out the “bad practice” that has led to economists’ discreditation. Overstating the benefits of trade, he claims, is at the heart of this. Thanks to his colleagues’ dishonest groupthink presentation – “economists are rarely humble” – we now don’t trust them when they warn us of other more pressing issues like the rise of technology.
Nonetheless, there’s plenty of good economics in this new volume, particularly regarding the intricacies of trade. Rodrik’s chronicling of the economic and societal role of work and the diverse development of nations is compelling, as are his present-day comparisons with historical moments ranging from the ancient Greek city-states to Bretton Woods. His cynicism about the globalisation snowball is backed up by domestic concerns stemming from practices such as social dumping (he argues for broadening the concept of fair trade in trade law to include this), and by stressing that it was national banks that “dealt” with the recent economic crisis. The book also benefits from deft commentary on WTO lobbying, the so-called “free-trade” agreements that Rodrik says would make Smith and Ricardo “turn over in their graves”, and a nice analogy between capital and gun control.
Sadly, the book’s more political chapters are less cogent. Some feel hastily compiled (particularly the section on Trump, trade, and tweeting), and some are just overly “economisty” (the term seems justified in that Rodrik celebrates Paul Romer’s criticism of some economists’ “mathiness”). More disappointing, however, is the way in which an understandable desire to tackle (too many) big issues de jour has led to a disjointed political subtext. The descriptive sections on politics are good, not least a taxonomy of different kinds of democracy. But it’s not only Rodrik’s language that is, at points, too economisty; his chapter on the importance of “ideas” over interests reads as if no thinker had ever previously conceived of such a thing. He also seems uncomfortable engaging with moral arguments – or indeed, any which aren’t predicated on consequentialist economic efficiency (something he criticises his colleagues for being unable to get over). This means that the conclusion that what is needed is a focus on democratic deliberation feels like the presentation of a new economic model, eager for application.
These weaknesses are presumably the explanation for Rodrik’s failure to understand Brexit. Or at least, it’s preferable to assume that, rather than finding him guilty of hypocrisy in a seeming refusal to recognise his “public responsibility” to speak out against the status quo when his evidence suggests he should. After all, his arguments are highly suited to an almost unarguable criticism of the EU. The experiences of Greece perfectly point up both his insistence that economic models are not universally applicable, and his view that hyperglobalisation can seriously harm vulnerable players in domestic labour markets. He even explains that the country’s current “failure” comes from the inappropriate EU-imposed “logic of structural reform”. Yet he finds it “striking that European citizens feel so little attachment to the European Union”.
Similarly, throughout the book, Brexit is lumped with Trump, and other instances of (that all-too-often undefined term) “populism”. Rodrik divides right-wing populism into that which “cleaves” to identity, and left-wing populism as that which “cleaves” to income and class. Yet, he is surprised by “the decidedly right wing tilt the political reaction [to globalisation] has taken”, and misses the obvious related point that (harder) right-wing support in Britain has fallen substantially since Brexit.
The problem here, again, is the placing of national or global economic interests above all else. Rodrik’s support for the nation state is predicated on disappointed economic necessity, rather than an understanding of national or cultural customs and sympathies. His criticisms of globalisation do not stem from any fear of the social risks of such a project. Rather, “we live in a second-best world where policy action is almost always partial (and partially effective), and well-intentioned reforms in one area may backfire in the presence of distortions elsewhere in the system”.
To Rodrik, the EU is clearly an imperfect, yet nonetheless necessary solution. And it’s exactly that kind of argument that shows us why Brexit – and everything else – has to be about more than just economics.