The globalization paradox : why global markets, states, and democracy can't coexist

For a century, economists have driven forward the cause of globalization in financial institutions, labour markets, and trade. Yet there have been consistent warning signs that a global economy and free trade might not always be advantageous. Where are the pressure points? What could be done about them? Dani Rodrik examines the back-story from its seventeenth-century origins through the milestones of the gold standard, the Bretton Woods Agreement, and the Washington Consensus, to the present day. Although economic globalization has enabled unprecedented levels of prosperity in advanced countries and has been a boon to hundreds of millions of poor workers in China and elsewhere in Asia, it is a concept that rests on shaky pillars, he contends. Its long-term sustainability is not a given. The heart of Rodrik's argument is a fundamental 'trilemma': that we cannot simultaneously pursue democracy, national self-determination, and economic globalization. Give too much power to governments, and you have protectionism. Give markets too much freedom, and you have an unstable world economy with little social and political support from those it is supposed to help. Rodrik argues for smart globalization, not maximum globalization CONTENTS 8 INTRODUCTION: Recasting Globalization’s Narrative 10 1. Of Markets and States: Globalization in History’s Mirror 26 2. The Rise and Fall of the First Great Globalization 47 3. Why Doesn’t Everyone Get the Case for Free Trade? 70 4. Bretton Woods, GATT, and the WTO: Trade in a Politicized World 90 5. Financial Globalization Follies 112 6. The Foxes and Hedgehogs of Finance 135 7. Poor Countries in a Rich World 158 8. Trade Fundamentalism in the Tropics 182 9. The Political Trilemma of the World Economy 207 10. Is Global Governance Feasible? Is It Desirable? 230 11. Designing Capitalism 3.0 256 12. A Sane Globalization 274 AFTERWORD: A Bedtime Story for Grown-ups 304 NOTES 308 ACKNOWLEDGMENTS 342 INDEX 344 A 344 B 345 C 346 D 349 E 350 F 352 G 354 H 356 I 357 J 359 K 359 L 359 M 360 N 361 O 362 P 362 Q 363 R 363 S 364 T 366 U 367 V 368 W 368 Y 369 Z 369 Content: Introduction: Recasting Globalization's Narrative 1. Of States and Markets: Globalization in History's Mirror 2. The Rise and Fall of the First Great Globalization 3. Why Doesn't Everyone Get the Case for Free Trade? 4. Bretton Woods, GATT, and the WTO: Trade in a Politicized World 5. Financial Globalization Follies 6. The Foxes and Hedgehogs of Finance 7. Poor Countries in a Rich World 8. Trade Fundamentalism in the Tropics 9. The Political Trilemma of the World Economy 10. Is Global Governance Feasible? Is It Desirable? 11. Designing Capitalism 12. A Sane Globalization Afterword: A Bedtime Story for Grown-ups Globalization, Rodrik argues, rests on shaky foundations. Despite the benefits it has brought to much of the world, there are profound conflicts of interest between democracy, national determination, and full economic globalization. He traces the idea's history, pinpoints its weaknesses, and points the way forward to a new 'smart globalization'