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July 30, 2007

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robertdfeinman

If one looks at all human activity as a contest then the old maxim "might makes right" can explain everything.

When transactions are consummated to the benefit of both parties it just means that they are approximately equal in strength. In the international arena there has been an attempt since Wilson to circumvent the maxim. There has been some progress in establishing international structures which permit negotiation instead of violence, but when the issues are important enough they fail.

The UN has not prevented a single war where the parties were determined to fight. In the US the phrase "national interest" is used to justify whatever position the ruling admin wishes to take.

It may be pleasant to design new international structures to move negotiation into new areas, but when push comes to shove it is the ability to force compliance where things break down.

Sovereign states are not restrained by any supra-national body because these organizations have no "might". Personally I think this is an insoluble problem, but those who think otherwise need to explain how compliance will be achieved. Soft power won't do it.

Andrew

The one thing that jumped out to me is that in delineating the new conventional wisdom, you included stagnant median wages in addition to inequality and insecurity.

Notwithstanding the desirability of a third 'i' for marketing reasons, is this not a more contentious point than the other two?

Also, two typos: p.14, 3rd-last line: in -> into.
p.24, 4th-last line: 1915-1913 is not a valid interval.

Per Kurowski

I would like to make a couple of very brief comments on Dani Rodrik’s “How to save globalization from its cheerleaders” based on some very specific issues that I have been writing and commenting about in my non-academic environment. These comments do not in any way contradict Rodrik’s opinions but provide hopefully even more meat to the discussion.

1. New world geography. Rodrik mentions on page 14 that “growth remained lackluster in El Salvador” and on page 15 that “Successful growth strategies are based on making the best of what you have—not on wishing you had what you lack”.

Well Rodrik is as most of us are still too stuck in the geography of the non-globalized world to be able to see what is truly happening around us. For instance, El Salvador has about 2 million of its people working abroad, more than a third of its total workforce and so if to the current GDP figures of El Salvador we add what these workers are earning, gross, abroad, well then we suddenly discover that El Salvador’s growth rate could actually be higher than China’s. And why should we not do it this way? Is not an El Salvadoran still a real El Salvadoran just because he or she is working abroad? The internal emigration in China from west to east might take a Chinese from 50 to 150 dollars per month, but the El Salvadorans going south to north go from 120 to 1.200, and no one hears a word of complaint about an over or undervalued currency as El Salvador is dollarized.

2. Running in parallel to the globalization, the opening the markets, there has been a process of worldwide bank regulation and that although Rodrik mentions it on page 24 as the international financial regime, its impact in terms of closing markets by submitting them to the opinions of some very few credit rating agencies are much more far reaching than what Rodrik implies. Place this in the context of the ongoing debate on debt-sustainability and you have a very intoxicating cocktail. If you want more on this I am now building up my

http://www.subprimeregulations.blogspot.com/
http://unsustainabledebtsustainability.blogspot.com/

3. One of the underlying problems with being able to capitalize the full benefits from globalizations might be that a lot of actors are capturing an unfair large share of them. Rodrik mentions on page 23 and 24 for instance “how the intellectual property rights entail a narrowing of space for the conduct of industrial policies” but it is really with respect to how much these TRIPs and other forms of monopoly’s enhancement tools capture the benefits of globalization that more research has to be done… among others to make the compensation of the losers in the developed countries an economically viable proposition.

paine

for rob fein:

if we think of nations as
legal persons
then libertarian doctrine suggests
these nations
are better off without supranational institutions
with supra power coersive
"rights"

or at least
so believe
a few visiters to these commment cages

the flaw ..even with no supra power

trans border power projection
occurs and can be gainful

like a system
of cross
raiding among
cow herding tribal societies

the problem gets intense

when a hegemony dreaming tribal herding nation
"convinces "
the rest to join in
setting up a rigged confederacy

then rigs the rules
---
maybe with a posse of willing tribes ----
to deem
certain raids "legal"
and other raids still"illegal"

when the systemic interest would rule
all raids are illegal
but that type of
wilsonian fantasy confederation
would never get out
of the first get together
in a treaty lodge

hey whats in it for us

paine

per kur
don't know about your stats
but dani r
has a paper that addresses this issue of exporting
the peculiar commodity
labor power

he sees it if i recall
as a faster better waty to speed development
then trade
i agree
my view from up north
better by far
the south workers come here
then north jobs go there

our domestic
"native "tasks

maintain chock full employment fiscal policy
ala bill vickrey

dive the dollar
vis a vis south currencies


organize our immigros

high minimum wage
high over time premiums

unions
most of all unions

more likely they 'll get organized here then down there
we have an open pluralized
civil society
down south ....

and dirty industry
can start cleaning itself up here
instead of escaping down there
to soil and foul unimpeded

Per Kurowski

Paine

My very imprecise statistics

El Salvador GDP US$ 17.3 billion less remittances of about US$ 3.3 billion equals US$ 14.0 billion.

Remittances of about US$ 3.3 billion results in, if they represent 18% of gross earnings, a GEP (Gross Emigrant Product) of US$ 18.3 billion,

And giving us a total El Salvador product of US$ 32.2… give and take many purchase power parity adjustments.

I agree with the thesis that opening up to real and massive temporary worker programs is the best way for everyone. If you could get me Dani´s paper on this I would appreciate it… meanwhile dare having a look at

http://theamericanunion.blogspot.com/

paine

dani
the paper is a nice summary of where your at

i haven't digested it yet
but chunks have been pre marketed here obviously
and nothing surprised me therefore

if i might say this
as a hi fi uber alas guy

the trade stuff seems more solid then the cap market stuff

problem:

the corporate hegemons
up north here
are hi fi ers
first last and always

case today

paulson in the PRC

I HATE TO THINK
BUT I BELIEVE
THE LEVER
OF LOOMING PROTECTION CLOUDS HERE
WILL BE BARTERED AWAY
FOR MORE OPEN CAP MARKETS IN CHINA

now i know you favor export firm subsidy
over the rmb at half fair pricing vis a vis
north currencies
but maybe
the prc's second best
is america's jobblers first worst

paine

non pedantic heads up:

ps the brits went off gold in i think 31 or 32..
but certainly after tumbling down the 29 cataract

in 25 the tory gubmint
as a boost to sterling's
captal export value
raised
the pounds value
to i think 5 dollars
a pre great war forex rate

i suspect you know all this quite well
and the two dates just got flip flopped

Steveb

Page 1: “In this paper I present a forward-looking evaluation of globalization. I accept as my premise that globalization, in some appropriate form, is a major engine of economic growth (as Figure 1 amply demonstrates).”

Comment: Fig 1 does not demonstrate even a correlation between globalization and per capita growth, let alone a causative engine. To do either, one first has to have a quantitative measure of globalization. There are obviously many possible measures of globalization, so perhaps to be most persuasive, you should try several quantitative measures. Also, choosing a time period of 320 years for the US is very different from a 24 year period for Japan, or a 6 year period for China. Perhaps those time periods are not comparable. Perhaps the US did much better in shorter periods of time.

Page 19: “A collapse towards protectionism and bilateralism à la 1930s can never be ruled out—it has happened before—and would be bad news for poor and rich nations alike.”

Comment: Did international trade drop in Europe and US primarily in the 1930s, or was the larger drop in the late 1910s, more associated with WWI than the depression? I have read both assertions. A quantitative measure of globalization might answer that question.

wjd123

"Sovereign states are not restrained by any supra-national body because these organizations have no "might"."--robertdfeinman

Might isn't as important as legitimation. Legitimation can bring to it might.

dawood mamoon

To add up further to the discussion, let history be the lesson for policy making to the extent that old mistakes are not repeated but future dvelopment discourse should also be partly/significantly based on the context of our shared enhanced wisdom surrounding our scientific and technological progress. Currently, on paper the road map or blue print, if you may call it, of a comprehensive development discourse has been more or less established. There are many international agents of progress which can be expolited for the good of global welfare i.e., multinationals through corporate social responsibility, regional trade agreements,direct development aid by international donors while coordinating with the governments. Ensuing technologies, due to the participation of international actors, have a capability to change the dynamics in favor of sustainable development only if larger trust is developed between North and the South. The dynamics of conflict, internal or external, cannot be isolated from the slow progress of development discourse at a more comprehensive level in the South.
Human psycology and institutional psycology are not much different.Every institution has its own psycology. When different institutions coordinate, each has to consider the psycological underpinnings of the otherside to ensure that efforts of coordination be a success and thus minimise deadweight loss arised through information assymetries or lack of trust. Thus coordination between agents of development and globalisation should occur as an outcome of trust and mutual understanding than under some set of pre-defined, or need to need basis connections.

Lok Sang Ho

"I will allow you to protect your national social compact if you allow me to engage in development strategies that conflict with WTO and International Monetary Fund rules of good behaviour." This is the idea of expanding "policy space" as advocated by Prof. Rodrik.

The problem with this approach is that it ignores third party or spillover effects. The two negotiating parties are likely to mutually benefit, but the world as a whole is likely to become worse off.

Lok Sang Ho

A further point. I have been arguing that liberalization generally brings potential net gains but the gains and losses are often unfairly shared. So I argue that some redistribution mechanism that softens the blow to losers and even allows them to become gainers has to be part of the solution to the globalization impasse.

hari

I'm old (70Yrs!) hand of gatt and its tariff and trade round of negotiations. It was a slow process but much more realistic and manageable.

Under WTO, Clinton & Gang (Rubin!) tried to tie down the lose ends by including environmental and other issues under (former) Gatt rounds. This was a serious mistake and constrained WTO from functioning smoothly.

I didn't like environmental issues put in same basket with tariffs and trade plus NTBs.

Dani is trying to find realism within current WTO system - I suppose he's unable to find one because WTO is tilted more than ever against non-OECD block of nations.

PascalLamy, as former head of EU trade negotiations directorate, knows fully the Clintonian mistakes. As a Frenchman, and a socialist, he must try and find ways and means to go forward now with WTO.

My suggestion is more central to the errors of ommission/commission by ClintonAdmin in attaching side issues to basic tariff and trade issues; namely, non-tariff issues such as environment and labour conditions, etc.

The UN system already has an Environmental Agency based in Kenya/Nairobi which is more qualified to deal with its central manadate and global agenda.

NTB always been my subject because its OECD tool to protect its member countries domestic markets
from lose of comparative advanatage, etc.

Health hazards, like in sea food and other food items, is best example which OECD countries deploy to manage market penetration by a non-OECD country.

Value added is another criteria by which OECD countries demand origin requirements before approving potential imports. (Australia is a good example in SouthPacificRegion).

The problem with WTO is that it has become a huge bureaucracy now (campared to Gatt/Unctad).

Moreover, by making the complaint/dispute mechanism legally binding, it has strengthened its decision-making power while renouncing/compromising its central tariff/trade negotiation priority.

Of course, development demands consolidation and reinforcement of procedures/processess, but at what cost?

What Dani is trying to achieve with his think-piece is to find some rationality to fit intrinsic weakness of ThirdWorld countries. If they don't develop or "graduate" into developed industrialized nations, Africa will continue to remain a backwater of underdevelopment. Principally because capacity development is not one of the priority functions of new WTO.

In conclusion, I want to redirect WTO to its basic global function of tarrifs and trade negotations.

paine

"The problem with this approach is that it ignores third party or spillover effects. The two negotiating parties are likely to mutually benefit, but the world as a whole is likely to become worse off."

non sequitor

the notion is not to lead to an outbrake of exclusionary
bilateralism
but to allow for flexible pathways to development
your part whole argument is misplaced

use it on washington
one on one bully or buggar the south strategy

as iuncle brow beats its way from emerger to emerger demanding take it or leave it
one way deals
featuring prone capital markets
and wild
ntellectual property
rights scalping

oh the indictment runs long ....
at any rate
the whole south is more then the sum of its bilateral north south parts

emergers must stand together or washington will knock em off one by one

paine

"...I argue that some redistribution mechanism that softens the blow to losers and even allows them to become gainers has to be part of the solution to the globalization impasse"

words words words
sweet

promising roses and delivering sour kraut ...

even larry summers has learned this
lull a buyer

please
we need to take direct action
not wait for the give backs

paine

hari
i share the view of your wise comment

"Dani is trying to find realism within current WTO system - I suppose he's unable to find one because WTO is tilted more than ever against non-OECD block of nations"

but your stuff about green
and union regs

well i suspect those are cover stories
for the losers back home
a fig leaf
that hardly explains the doha brake down

and surely even if included
will never be implemented
except as a pretext for quotas and other barriers
really motivated by
any of a half dozen
corporate profit
strategy moves
that bare no link to unionization
labor standards working conditions
product quality
or environmental impact

the impact on the bottom line
is the only impact that
hits the target

paine

hari
on second thought
forget my
hair trigger
man with a message "lecture"
obviously you get it
better then i do
as this shows


"NTB ... OECD tool to protect its member countries domestic markets.."

"Health hazards, like in sea food and other food items, is best example ...
OECD countries deploy
to manage market penetration by a non-OECD country "

now add
labor rules and green trade standards

hari

i'm with ya baby

paine

dani
i comment too often
but this site is on the core issues

may i open this up

the benefit of
international trade
would be
far less
if technical transfers
were costless

putting aside the small country small internal market scale of production
effects
your well outlined
cost discover and learning by doing it right enough
to earn a living
in the big league foreign markets
and the innovation incentive effects amd the ....
ya
may be that amounts to throwing the baby out with bath water

but my point
trade per say is an expedient
where natural variation
is of no signifgance

optimal trading areas
in a borderless global system
prolly would move people once to locations of production
not products over and over again
and hop locations of production too

as if the mines and minds of one place are exhausted

Little Diogenes

The paper is quite interesting.

One detail though: there is no "full labor mobility" within the European union, far from that. In most western European countries, citizens from the new member states are simply not permitted to work (UK being a notable exception).

Little Diogenes

The previous comment was my first comment on your blog.

I've been reading it almost from the start and I really enjoy the quality of your posts.

So, thank you!

Simon Lester

You say:

"For example, an NGO may try to make the case that goods
imported using child labor violate domestic views about what is an acceptable economic
transaction. Or a consumer body may want to ban imports of certain goods from a country
because of safety concerns."

But doesn't your proposal actually make it harder to keep out such imports? Arguably, under the current rules governments can do these sorts of things without going through any special procedures. Not indisputably, of course, as the rules are fuzzy, but I think it wouldn't be too difficult to accomplish.

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