William Lazonick is a Professor at the University of Massachusetts Lowell, where he directs the Center for Industrial Competitiveness. He is also a Visiting Professor at the University of Ljubljana where he teaches a PhD course on the theory of innovative enterprise. Previously he was an Assistant and Associate Professor of Economics at Harvard University, Professor of Economics at Barnard College of Columbia University, and Visiting Scholar and then Distinguished Research Professor at INSEAD.
His speech was like one normally expected of an American president. Countries must resist the temptation to retreat into harbour, the world leader said to a packed and admiring audience, but instead have the courage to swim in the vast ocean of the global market.
This was the kind of paean to free trade that might have come from John F Kennedy, George W Bush or Bill Clinton – all occupants of the White House who saw it as the United States’s role to defend the open international trading system set up at the end of the second world war.
This, though, was China’s President, Xi Jinping, in Davos last week, making it clear that he was prepared to fill the vacuum if Donald Trump went ahead with the sort of protectionist policies he had proposed in his election campaign.
Those attending Davos reassured themselves that Trump would ditch all these proposals once he was in office. But if he doesn’t, the consequences are obvious: the world will be plunged into a trade war that will bring the globalisation of the past quarter of a century to a juddering halt.
Post-Brexit Britain is in the throes of a major backlash against globalisation, blaming dwindling wages and rife inequality on the opening of the world’s economy, an exclusive poll for The Independent has revealed.
The survey by ComRes even exposes a new backward-looking dislike of modern technology in the UK, with the public blaming advances for a widening gap between the rich and poor.
People believe the gap has also been widened by the low interest rates employed by governments in many countries now suffering resurgent populist movements.
The restrictions are intended to “ensure the safety of everyone on the water, including people who are not part of the event”.
These restrictions are for uncle Sam’s benefit.
Protest boats will be banned from parts of Auckland’s harbour during a historic visit by a United States warship.
The US Navy is sending the USS Sampson to Auckland for the Royal New Zealand Navy’s 75th birthday next month – the first visit by an American ship in 33 years.
Transport Minister Simon Bridges today declared the International Naval Review a Major Maritime Event.
That meant vessels not taking part in the review would have to stay clear of restricted areas in the Waitemata Harbour, Rangitoto Channel and parts of the inner Hauraki Gulf.
Bridges said the restrictions were intended to “ensure the safety of everyone on the water, including people who are not part of the event”. NZ Herald
“There is great danger that the system will break down … or that it will collapse in a grim replay of the 1930s.” by Dani Rodrik
Not so long ago, it would have been unimaginable to contemplate a British exit from the European Union, or a Republican presidential candidate in the United States promising to renege on trade agreements, build a wall against Mexican immigrants, and punish companies that move offshore. The nation-state seems intent on reasserting itself. Project Syndicate
We need to rescue globalization not just from populists, but also from its cheerleaders. Simply put, we have pushed economic globalization too far, toward an impractical version that we might call “hyperglobalization”. Some simple principles would reorient us in the right direction.
1. There is no single way to prosperity. Countries make their own choices about the institutions that suit them best.
2. Countries have the right to protect their institutional arrangements and safeguard the integrity of their regulations. Financial regulations or labor protections can be circumvented and undermined by moving operations to foreign countries. Countries should be able to prevent such “regulatory arbitrage” by placing restrictions on cross-border transactions. For example, imports from countries that are gross violators of labor rights may face restrictions when those imports demonstrably threaten to damage labor standards at home.
3. The purpose of international economic negotiations should be to increase domestic policy autonomy, while being mindful of the possible harm to trade partners. Poor and rich countries alike need greater space for pursuing their objectives. The former need to restructure their economies and promote new industries, and the latter must address domestic concerns over inequality and distributive justice. Both objectives require placing some sand in the cogs of globalization.
4. Global governance should focus on enhancing democracy, not globalization.
5. Nondemocratic countries like Russia, China and Saudi Arabia, where the rule of law is routinely flouted and civil liberties are not protected, should not be able to count on the same rights and privileges in the international system as democracies can.
When I present these ideas to globalization advocates, they say the consequence would be a dangerous slide toward protectionism. But today the risks on the other side are greater, namely that the social strains of hyperglobalization will drive a populist backlash that undermines both globalization and democracy. Basing globalization on defensible democratic principles is its best defense.