World Economic Forum Tariffs, globalization, and democracy, with Harvard economist Dani Rodrik
Feb 6, 2025
Dani Rodrik, a Harvard economist and critic of unrestricted globalization, delves into the complex relationship between tariffs, economic nationalism, and democracy. He argues that while tariffs can protect domestic economies, they also come with limitations. Rodrik highlights the resurgence of industrial policy as a response to growing inequalities and declining middle class, stressing the need for improved job quality and worker empowerment. He also reflects on the social consequences of hyper-globalization, evidenced by events like Brexit and Trump's election.
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Hyperglobalization's Downsides
- Hyperglobalization created societal divisions and inequalities.
- These divisions were seen in income, culture, and political disconnect.
Mismanaged Globalization
- Globalization isn't inherently bad; mismanagement is the problem.
- The focus shifted from using global economics to achieve societal goals to prioritizing integration at all costs.
Industrial Policy's Importance
- Industrial policy supports economic growth and opportunity by structuring and diversifying economies.
- Despite being unfashionable, it has always been present, even in the US, through defense and small business policies.