We all make errors at one time or another. I may one day write about mine, but it will be too long for a post. For the moment, I want to speak about those of Dani Rodrik, the well-known professor at Harvard’s School of Government. His 2017 book Straight Talk on Trade is a compendium of his errors and those of his fellow establishment members, who together constitute a sort of symbolic John the Baptist as a forerunner of the mounting tyranny.
Thinking of a comment on another of my posts, I was led to reread my Regulation review of Rodrik’s Straight Talk on Trade. I am not unhappy with what in French we may call an “envolée littéraire“—which, according to a knowledgeable friend, translates into “a flight of literary fancy” without any pejorative connotation:
Although he portrays himself as a dissenter against “the establishment,” “the elites,” and “the reigning market fundamentalist ideology,” Rodrik is a good representative of the privileged few who have ruled America and most Western countries since the 1960s: half‐capitalist and half‐socialist, half‐populist and half‐elitist, half‐democratic and half‐authoritarian, half‐free‐trade and half‐fair‐trade, half‐postmodern and half‐moralizing, half‐bourgeois and half‐punk. Such folks have spent more than a half‐century burdening people with a dense network of regulation and surveillance, continually bossing ordinary people around, and pragmatically building a half‐police‐state. How was that different from the “case‐by‐case, hard‐headed pragmatism” that Rodrik advocates?
Contrary to what he claims, it is not free‐traders who have provoked the populist reaction, but the privileged class of which he is himself a member. It is because of people like him that populist and protectionist Trump was elected.
In the forthcoming Fall issue of Regulation, out of (Guttenberg and virtual) press later this month, a feature of mine emphasizes another aspect of the phenomenon: the continuity between “Trumponomics” and “Bidenomics.”
READER COMMENTS
Fazal Majid
Sep 13 2023 at 8:59am
Keep in mind Rodrik’s father-in-law is a retired Turkish general who was prosecuted on 2012 based on forged evidence of conspiracy to commit a coup (he was acquitted in 2015). Rodrik’s acquaintance with tyranny is probably more intimate than yours.
Pierre Lemieux
Sep 13 2023 at 10:22am
Fazal: We are of course influenced by our experience and our friends, but a large part of the “examined life” is to transcend our experiences and to choose our friends. I only intend to evaluate Rodrik’s ideas for their logical/economic consistency and their underlying value judgments.
Richard W Fulmer
Sep 13 2023 at 12:37pm
As Milton Friedman observed, the problem with immigration isn’t immigration, it’s the welfare state. New York City has created a legal “right to shelter.” And, as Mayor Eric Adams noted, “We [that is, taxpayers] have to feed, clothe, house, educate their children, wash their laundry sheets, give them everything they need, health care.” Add federal restrictions on employing immigrants into the mix, and we’ve got a self-created nightmare.
How do we convince American voters to support freer immigration when the government forces them to support millions of immigrants whom the government prevents from working?
Similarly, the problem with free trade isn’t free trade, it’s the regulatory state. Opening the country to new products and new ideas increases the rate at which creative destruction changes the economy, driving some companies out of businesses and some workers out of jobs. Recovery is made unnecessarily long and painful by a myriad of regulations (minimum wage laws, job licensing, certificate-of-need laws, business permits, rent controls, zoning restrictions, building codes, land use restrictions) that make it difficult for workers to find new jobs, relocate, or start new businesses. Add unemployment benefits and welfare programs that, in the short-term, make unemployment more attractive than employment and we’ve got another nightmare.
How do we convince American voters to support freer trade when it costs jobs in some sectors of the economy while government regulation hinders, and in some cases prevents, creating new jobs in other sectors?
How do we protect the economic engines of growth – which very much include the free movement of people and goods – while peeling back the layers of regulation that are turning people against freedom and free markets?
Pierre Lemieux
Sep 13 2023 at 3:44pm
Good points, Richard. I have become convinced that the main problem is not the welfare state but, indeed, the regulatory state.
Richard W Fulmer
Sep 13 2023 at 4:04pm
I think that the regulatory state is certainly the more immediate of the two problems. So, how do we go about convincing people – including those on the populist right – that the real problem isn’t free trade and (classical) liberalism, but government intervention? How do we convince them that the solution isn’t more government intervention but less?
David Seltzer
Sep 14 2023 at 6:11pm
Richard asked “How do we convince them that the solution isn’t more government intervention but less?” ay, there’s the rub.
vince
Sep 13 2023 at 4:39pm
And the two are inseparable. That’s the problem with free trade.
Richard W Fulmer
Sep 13 2023 at 4:44pm
Why is that? How can trade be free if it’s regulated?
vince
Sep 13 2023 at 5:20pm
It’s not, except in textbooks.
Richard W Fulmer
Sep 13 2023 at 5:39pm
Most African American workers were in chains until they weren’t. What is is not necessarily what must be, what should be, or what will be.
Jon Murphy
Sep 13 2023 at 5:39pm
Vince, I’m confused: first you say that free trade is inseperable from the regulatory state and then you say it doesn’t exist. Well, which is it?
Pierre Lemieux
Sep 13 2023 at 10:13pm
Vince: There is a sense in which you are right: there is always, and will always be, somewhere in the world (if not in one’s own country), a tyrant or some mafia that regulates or constrains trade. But this is not a useful characterization. For then, there is no liberty either, there is no free love, and there is no foie gras. Even the concept of comparative advantage would get messy. An operationally and economically useful definition of free trade is that it is, for a person, the absence of impediments created by his own government against his trading with whom he wants at the terms he agrees to. The freedom to work or to marry or to grow grapes would be defined in a similar way. You are free to marry a North Korean woman; it is her who is not free to marry you. This of course does not prevent somebody from trying, to the extent possible, to extend the domain of liberty. And it does not mean that liberty is not, like most things if not everything, a matter of degree. The ideal pursued is less a matter of degree.
Jon Murphy
Sep 14 2023 at 6:28pm
Vince: one should also note that your claim “And the two [free trade and the regulatory state] are inseparable” is incorrect from a historical perspective. There are countless examples of trade occuring without (and often in spite of) a regulatory state. For example, the Lex Mercatoria and the system of medeval fairs in Europe.
Thomas L Hutcheson
Sep 14 2023 at 10:50am
We disaggregate! We expend resources cost effectively to reduce the number of immigrants that will make low or even possibly negative contributions to national welfare and increase resources to attract immigrants that will make large contributions to national welfare.
Pierre Lemieux
Sep 14 2023 at 12:03pm
Thomas: You cannot avoid the questions: How do you measure “national welfare”? How do you even conceptually define it? Assuming these questions can be answered, what’s so sacred about “national welfare”? How many foreign lives can be sacrificed to the life of one “national welfaree”?
On this last question, John Hicks wrote:
Mactoul
Sep 15 2023 at 8:24pm
There goes the principle of exclusion. Frankly, it is not possible for state to not discriminate between it’s citizens and non-citizens. I doubt if a single exception can be found.
What is the concept of Fairness that is being appealed to here?
Pierre Lemieux
Sep 15 2023 at 9:47pm
Mactoul: What you express is a very simplified version of de Jasay’s argument. Even worse, the state is even incapable of not discriminating against some of its “citizens.” Hence de Jasay’s philosophical preference for anarchy. I invite you to read The State. My review provides some keys but is not sufficient. If you can read the book, perhaps we can return to this conversation? (Caveat: The book does require a good technical grasp of economics, but perhaps less than other writings of his. After reading The State at the end of the 1990s–I was very late–I felt much gratitude for the teachers who had taught economics to me. This is one of the four reasons why I push young men and women to study economics.)
Thomas L Hutcheson
Sep 16 2023 at 4:12pm
GDP would be close enough for government work, although I’d allow for some family unification and political asylum’s.
Jon Murphy
Sep 17 2023 at 2:15pm
GDP only works as a proxy for national welfare if there are market prices. Once price manipulation starts to happen (eg price controls, non-flat taxes/discriminatory taxes, etc), then GDP fails to be a useful proxy for welfare.
Thomas L Hutcheson
Sep 16 2023 at 5:16pm
To be clear, I agree the benefit to the immigrant is an additional reason to favor freer immigration. But in practice the arguments against immigration seem based on an estimate that immigration produces more harm than benefit to present residents of the US so I normally don’t adduce this benefit.
Andrew_FL
Sep 13 2023 at 12:56pm
That half-and-half bit is a great line!
Craig
Sep 13 2023 at 2:57pm
Yes, it is, no doubt.
Pierre Lemieux
Sep 13 2023 at 3:05pm
Thanks, Gentlemen!
Jose Pablo
Sep 22 2023 at 3:12pm
Well, I am not sure about the exact proportions …
Comments are closed.