Regulation of Globalization

We've seen an acceptance of the idea on the part of many economists and others that markets are not always right nor self-correcting. They need some regulation. The idea has until relatively recently been applied to domestic markets only. But Dani Rodrik, of Harvard and Project Syndicate, sees it starting to be applied to world markets as well. He reminds us of some who have started issuing warnings about globalization.

"So we have Paul Samuelson, the author of the postwar era’s landmark economics textbook, reminding his fellow economists that China’s gains in globalization may well come at the expense of the US; Paul Krugman, today’s foremost international trade theorist, arguing that trade with low-income countries is no longer too small to have an effect on inequality; Alan Blinder, a former US Federal Reserve vice chairman, worrying that international outsourcing will cause unprecedented dislocations for the US labor force; Martin Wolf, the Financial Times columnist and one of the most articulate advocates of globalization, writing of his disappointment with how financial globalization has turned out; and Larry Summers, the US Treasury chief and the Clinton administration’s “Mr. Globalization,” musing about the dangers of a race to the bottom in national regulations and the need for international labor standards."

Rodrik still believes in globalization but what is needed in his view are regulations and institutions to effectively manage global issues for the common good.