Notes on The Globalization Paradox: democracy and the future of the world economy, by Dani Rodrik

Globalization was at one of it's highest peaks at the turn of the 19th century because of new technologies, the emphasis on the free market, the adoption of the gold standard, shared belief systems about economics among the major trading partners, and the fear and power of imperialism.  The peak began to teeter then fall when major tariffs were instituted that decimated free trade, WWI eradicated the gold standard and created enormous inflation in Britain with no strategies for readjusting the parity across countries for how much their currency was worth, and the depression created great social problems with no government programs in place to respond to them.

In order to determine whether free trade is a good idea, you must look at more than just the "comparative" advantage across nations. You have to take into account the social opportunity costs as well (environmental effects, effects on people, cultural values like stem cell research etc.). Free trade will always create some "losers" and they are usually those who are unskilled and cannot easily merge into a new job when theirs is lost.

Arguing against free trade you must be able to show that the economic gains from freer trade overcome the distributional costs (how much are others losing); and/or that trade must violate social, cultural, ethical norms that prevail. One way to make free trade more beneficial to more people is to tax those who gain from the trade and compensate those who will lose (again, the need for government).

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