Thursday, May 08, 2008

Optimistic about Global Trade, but not that Optimistic

The Adam Smith Institute Blog pulls from a column in the NYT:

The central process driving this is not globalisation. It's the skills revolution. We’re moving into a more demanding cognitive age. In order to thrive, people are compelled to become better at absorbing, processing and combining information. This is happening in localized and globalised sectors, and it would be happening even if you tore up every free trade deal ever inked.
While they make some excellent points about both why protectionism empirically destroys wealth and jobs in the long run, I think they vastly underestimate the demagoguery of politicians who seek first to get elected and then they focus on staying elected. As someone who believes strongly in democracy, I also believe that poor choices are also made by the people - but progress is almost never unidirectional often taking a two steps forward one step back type approach as the pendulum in public opinion swings erratically. Brink Lindsey in Against the Dead Hand makes this point forcefully, that the forces of globalization while seen by some as inevitable because of the power of those ideas, it is hardly the case (e.g. Zimbabwe, Venezuela, Cuba, Myanmar, Iran, etc.). Name for instance a government that advocates free trade and liberalization without reservations. Sadly, there are none.

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