Critics of globalisation revisited.

I came across an interesting passage in the New York Times by Dani Rodrik recently. His point was to draw attention to Donald Trump’s fake populism – his posing as a supporter of the common man, but his actions on trade, tax and health policies that would do the exact opposite, supporting special interests rather than workers.

But Rodrik was also very much in line with my writings about the need to make globalisation work through effective tax policy, not by unwinding globalisation itself (as Trump seems to want to do with, among other things, his attempts to renegotiate NAFTA).

The whole article is worth a read, but here is a snippet:

 “… A truly fairer globalisation would start at home, with a reconstruction of the social compact that binds the corporate elite and the wealthy to labour and the middle class. Every society that opens itself up to the world economy needs social transfers, labour-training programs and regional policies that take care of the adversely affected workers and communities. Our domestic approach, over-reliant on underfunded and ineffective trade-adjustment assistance policies, has not worked and needs to be replaced by more extensive safety nets.

These must be complemented with more progressive income taxation, employment-generating policies such as infrastructure investment and political reforms that reduce the role of money in politics. Mr. Trump and the Republicans want to take us in exactly the opposite direction, with a tax reform that will benefit the wealthy first and foremost.

The problem with Mr. Trump’s economic nationalism is not his avowed belief that trade should serve the national interest. When we economists teach the theory of trade, we emphasise that free trade is desirable because it expands the domestic economic pie — not because it confers gains to other nations. The problem is that he is deeply averse to the domestic policies that would allow American workers a piece of the added pie.

… Mr. Trump’s failure to distance himself from special-interest globalisation is perhaps not surprising. But it exposes the vacuity of his brand of populism. Despite all his talk about fairness and the need to stand up for ordinary working people, he has little to offer his core constituency. He will exacerbate, rather than mend, the grievances that made his presidency possible.”