Posts Tagged ‘Dani Rodrik’


Dani Rodrik’s new world order

January 13, 2011

Heterodox Harvard economist Dani Rodrik recently posted a list of seven New Rules for the Global Economy. I generally find Rodrik pretty compelling, but this list is particularly fantastic. The whole thing is well worth reading; here are a few of my reactions to individual points, including a rather large open question.


Markets must be deeply embedded in systems of governance. The idea that markets are self-regulating received a mortal blow in the recent financial crisis and should be buried once and for all.

A crucial piece of any necessary reform of the global economy. I continue to believe that reform-minded activists missed a huge opportunity when the financial crisis hit to push for broad changes in the global economy and in the ideological domination of markets in the public consciousness. The moment hasn’t entirely passed, though, and having high-profile intellectuals like Rodrik continue to cite it as an impetus for reform is enormously helpful.

For the foreseeable future, democratic governance is likely to be organized largely within national political communities. The nation state lives, if not entirely well, and remains essentially the only game in town.

Neocons and liberal internationalists alike share a certain “one world” rhetoric that sounds great but has profound implications for the way policy is made. I like Rodrik’s formulation of this idea, in that he doesn’t claim that independent nation-states are necessarily the best form of governance, but he strongly advocates that since they’re not going anywhere, we should respect their sovereignty. That’s a statement that sounds common-sensical but has far-reaching implications.

Countries have the right to protect their own regulations and institutions [… and] Countries have no right to impose their institutions on others.

And these are some of those far-reaching implications. The first part of this should seem fairly straightforward, I hope, although in today’s political climate it is nevertheless a fairly radical thought. The second part, however, is a bit trickier. Certainly it sounds agreeable, but it also perhaps conflicts with Rodrik’s seventh and final rule:

Non-democratic countries cannot count on the same rights and privileges in the international economic order as democracies.

While Rodrik isn’t arguing for the outright imposition of democratic institutions on countries, he’s certainly arguing for a certain kind of international pressure for democratization, which seems to go against the above rule. Also, there are numerous examples of policies that progressives would consider “good” that involve the imposition of values or the imposition of an anti-institutional value system – for instance, the procurement rules and boycotts used to provide international pressure against the system of apartheid in South Africa, or the junta in Burma. Would Rodrik condemn these policies in the same way he would condemn “trade sanctions or other pressure to alter foreign countries’ labor-market rules, environmen­tal policies, or financial regulations”?

While this is a criticism from a logical standpoint, it may not be one from a normative standpoint – I’d probably agree that there are real differences between imposing values that prioritize global commerce and those that prioritize (for example) democratic process or human rights. But it’s not necessarily a completely straightforward, logically airtight argument to make.


Steelworkers FTW WTF

October 14, 2010

I was in the middle of a busy period of life when a month ago, the Steelworkers submitted a 5,800-page petition urging the Obama administration to file a WTO case again Chinese subsidies for green technologies. I just found out about it today. I got really pissed off.

The way USW is going about this is completely backwards. They’re accusing China of engaging in “illegal practices that stimulate and protect its domestic producers of green technology, ranging from wind and solar energy products to advanced batteries and energy-efficient vehicles.” This is a double whammy. Not only does it reinforce the frame that domestic industrial policy is bad and legitimizes the use of the WTO to attack such policy (and why the hell would USW want to advance that frame?!), it also is a slap in the face for climate activists who would probably like nothing more than to see China, the world’s leading greenhouse gas emitter, invest in developing cleaner technologies.

To add insult to injury, this is all also completely hypocritical, since USW, as a founding member of the Blue-Green Alliance, would love to see massive U.S. investment in the domestic green economy. It’s a classic case of kicking away the ladder: denying developing countries the policy tools we want to be able to use ourselves.

What’s interesting is the Blue-Green Alliance statement on the USW petition. It’s decidedly lukewarm and avoids condemning China as an enemy engaging in “unfair practices.” I wonder what the politics behind the scenes here must have been like. In any case, I suspect this is a more useful position for progressives to adopt:

Today’s Section 301 petition filed by the United Steelworkers underscores the importance that the United States act quickly to take advantage of the job-creating opportunities of the clean energy economy. Every day America delays action is another day that China capitalizes on jobs created in the production of clean energy technologies that could and should be developed, manufactured, and installed in the United States.

This looks pretty different from USW’s condemnation of China using legitimate policy tools to promote their industries. There’s still the requisite vaguely nativist language, but instead of blaming China for doing what we should be doing, it puts the onus on U.S. policymakers to create our own industrial policy for the green economy – WTO legality be damned. This is a useful frame that USW has undermined: instead of thinking about what is and isn’t legal under the messed up WTO rules, we should be thinking about what policy goals we want to work towards, and if the WTO rules need to be changed to allow them, we should campaign for WTO reform.

(As an aside, interestingly, this week the Brookings/AEI green economy proposal came out, and even if it’s not something progressives can get behind, as Dani Rodrik pointed out, if this isn’t an industrial policy proposal, nothing is. And this coming from AEI!)

USW’s is exactly the kind of stance organized labor needs to not be taking in a modern world characterized by increasing interconnectedness and potentially imminent environmental catastrophe. We need a less provincial labor movement and more of a global working class consciousness in order to get anything done. Somewhere, Frances Fox Piven is saying, “I told you so.”