Winners And Losers From Free Trade

Dani Rodrik is considered as an exceptional long-standing critic of the present international order. His last book “The Globalization Paradox” is the sequel of one of his earlier books about the disruptive repercussion of the international trade on social policies and national labor markets. For sure, this new book extends and develops this theme including financial globalization. Even more, there is a debate concerning the democratic legitimacy of our international order. Dani Rodrik concludes his book by considering and thinking about the possible reform of the world economy.

The climate of the current economy is tending to produce some disparities concerning the economic performance on the long-term. Indeed, three key characteristics will be shared between certain countries which face the best the crisis and the recession. These three key characteristics are: strong domestic demand growth, a robust democracy, and also a relatively low public debt. Indeed, the world economy is facing an important uncertainty at the short term. Indeed, in the third chapter of the book titled “Why doesn’t everyone get the case for free trade?” Rodrik speaks about five major problematic linked to the topic of today “Winners and losers from free trade”, and which are: “Trade as technological progress; Public skepticism on trade; the case for trade, qualified; Trade and income distribution, what economists will not tell you”. These problematic will determine the evolution of the global economy over the next years. However, it is obvious that the world economy is facing now several difficulties in the new long-term, and which it will possibly be the most harmful period that we have ever known since the end of the last World War. According to Rodrik, it is sure that each of America and Europe will know some contentious domestic politics, a high debt emergence, and also low growth rates. It is also sure that USA will still know a big cleavage between Republicans and Democrats, and also Europe cannot get back to its privileged position of one of the biggest economic powers in the world even if the euro remains intact.

Rodrik explains that the political strife of these old democracies will be certainly fueled by the aging populations, a high inequalities level, and also the strains on the middle class, all this in a context of rare fiscal resources and unemployment. At the opposite, he shows how the emerging markets like India, China, and Brazil will continue their maneuvers of the protection of their own national sovereignty, which will result to the further repulsion of all the possibilities for a global cooperation. Indeed, and according to Dani Rodrik, three main characteristics will be shared between these new emerging economic powers. First of all, they will become robust democracies. Secondly, they will not be afflicted by the high levels concerning their public debt. And finally, they will become more independent from the global economy, this confirmed by the increasing penchant of an internal economic growth than an external one.

Dani Rodrik is warning us about the excess preoccupation of the advanced economic powers of the world with the reduction of their debts, which will surely leads them to ignore the long-term structural strategies deeply linked to the investments. Indeed, the immobilization of their fiscal policies will certainly lead them to the triggering of many political conflicts because of the

...