- Cafe Hayek - https://cafehayek.com -

Pearlstein on Dani Rodrik

Tweet [1]

Here’s a letter to the Washington Post:

Steven Pearlstein is insufficiently critical of Dani Rodrik’s latest brief against free trade (“Review: Dani Rodrik’s ‘The Globalization Paradox’ [2],” March 13).

For example, while it might be true that countries most open to trade today also tend to be countries with the largest governments, this fact doesn’t prove Prof. Rodrik’s claim that free trade can be successful only if its consequences are managed by a large, activist state.  Hong Kong remains today the most open country in the world, trade-wise, yet its government is also the world’s smallest [3].  Singapore – the world’s second-most open country – also has one of the world’s smallest governments.  Yet citizens of these countries are among the wealthiest people on the planet.

Or consider America before the New Deal.  Although relatively high national tariffs were the norm during that period, America itself was a vast and vibrant free-trade zone.  Textile-producing innovations in the Carolinas “disrupted” (to use Prof. Rodrik’s term for economic change) the economy of New England; meatpacking innovations in Illinois “disrupted” the economy of Texas; transportation innovations in Michigan “disrupted” economies everywhere.  Yet there was no government, at any level back then, imposing – on all Americans freely trading with each other – “the same set of rules” that Prof. Rodrik fancies is necessary to make free trade both successful and accepted.

Donald J. Boudreaux