More notes on The Globalization paradox, Dani Rodrik
Is Rodrik suggesting that one difference between foxes--those who look widely and at diverse variables (to use Isaiah Berlin's division) and hedgehogs--focus on one thing, is that foxes operate on the level of the real world while Hedgehogs are more concerned with what should happen in the perfect world? The hedgehogs of economics, argues Rodrik, see the free market as the answer to all problems. In gobalization, they would argue, we need open markets. Foxes, in contrast, would say there are some ways that somewhat open markets might work within a certain framework like needing regulation and taxes. In the world, private financial markets have grown much faster than other economic and political institutions, unlike in the US where they have more successfully grown together. You cannot treat the world as if it is the US.
Hedgehogs, argues R, argue that it's not markets that are the problem but people (similar to gun control resistors). Foxes believe that people must be regulated.
While there are many local causes of the financial meltdown of 2007, R argues that one of the most serious and least attended to is the gap between globalized financial markets and the scope of governance of these markets. Given how difficult it is to regulate financial markets in the national sphere, regulating and/or overseeing markets globally is a whole nother ball game. Regulatory structure is absolutely essential if we are going to liberalize global economies.
China was able to prosper and prosper incredibly quickly because of government policies designed to maintain a communist underpinning with a market driven frosting. The interesting question is would the people in China have preferred a much slower growth and more freedoms (less government intervention?)?
"virtually every hub of cutting-edge entrepreneurial activity in the world today had its origins in proactive government intervention" Josh Lerner, Harvard Business school innovation expert.
While government support was considered a given through the 60's and 70's, in the 80's that changed dramatically to the adoption of the neo-liberal platform of stabalize, liberalize and privatize. Rather than adopt policies of government supported growth, they focused on opening markets through reducing import tariffs and relaxing restrictions on trade. The East Asian triumphs of South Korea, China, Thailand, etc were seen as triumphs of free trade while ignoring the extensive government support and regulation in these countries. The hedgehog approach of treating all countries with the same treatment was not successful in most developing countries because it ignored many individualized problems that countries had that would require good political institutions to help ameliorate.
Hedgehogs, argues R, argue that it's not markets that are the problem but people (similar to gun control resistors). Foxes believe that people must be regulated.
While there are many local causes of the financial meltdown of 2007, R argues that one of the most serious and least attended to is the gap between globalized financial markets and the scope of governance of these markets. Given how difficult it is to regulate financial markets in the national sphere, regulating and/or overseeing markets globally is a whole nother ball game. Regulatory structure is absolutely essential if we are going to liberalize global economies.
China was able to prosper and prosper incredibly quickly because of government policies designed to maintain a communist underpinning with a market driven frosting. The interesting question is would the people in China have preferred a much slower growth and more freedoms (less government intervention?)?
"virtually every hub of cutting-edge entrepreneurial activity in the world today had its origins in proactive government intervention" Josh Lerner, Harvard Business school innovation expert.
While government support was considered a given through the 60's and 70's, in the 80's that changed dramatically to the adoption of the neo-liberal platform of stabalize, liberalize and privatize. Rather than adopt policies of government supported growth, they focused on opening markets through reducing import tariffs and relaxing restrictions on trade. The East Asian triumphs of South Korea, China, Thailand, etc were seen as triumphs of free trade while ignoring the extensive government support and regulation in these countries. The hedgehog approach of treating all countries with the same treatment was not successful in most developing countries because it ignored many individualized problems that countries had that would require good political institutions to help ameliorate.
Comments
Post a Comment