Book Review of The Globalization Paradox by Dani Rodrik
The Globalization Paradox. Dani Rodrik. New York: W. W. Norton and Company, 2011. 284 pp. $17.95.
In “The Globalization Paradox,” Turkish economist Dani Rodrik seeks to establish a controversial, grim look on recent Western efforts to “hyper-globalize,” or breakdown political and economic borders between states to allow the flow of free trade and capital. He argues that since the breakdown of Bretton-Woods era capital and free trade controls, globalization has taken a turn against Western norms such as democracy and sovereignty, threatening these fundamental concepts altogether. Going further, Rodrik argues that big markets necessitate big governments, and increased exposure to international markets create even bigger governments, naming countries such as Sweden and the Netherlands as examples (p. 16). He explains that countries like the US, Japan and Australia have been able to keep their governments relatively small because they are “more sheltered from the forces of international competition” (p. 17) which allows them to reduce their public sectors by about half of those who are geographically located in the major international market centers (EU, East Asia). This assumption is ridiculous. The United States, Japan, and Australia are very much engaged in world economic competition. To use geographic distance as an explanation for small government in a world populated by massive container ships, warm-water ports, cargo airplanes, international telecommunications and online social networks is crude. Rodrik’s reasoning also fails to take into account the economy of Hong Kong, the most liberalized economy in the world according to the Wall Street Journal and the Heritage Foundation for 18 years running. According to Rodrik’s analysis, Hong Kong should theoretically have a large government due to it’s small geographic size, and it’s shared border with it’s major trading partner of China (roughly 48.7% of all trade in Hong Kong was with China in 2010). It’s hard
In “The Globalization Paradox,” Turkish economist Dani Rodrik seeks to establish a controversial, grim look on recent Western efforts to “hyper-globalize,” or breakdown political and economic borders between states to allow the flow of free trade and capital. He argues that since the breakdown of Bretton-Woods era capital and free trade controls, globalization has taken a turn against Western norms such as democracy and sovereignty, threatening these fundamental concepts altogether. Going further, Rodrik argues that big markets necessitate big governments, and increased exposure to international markets create even bigger governments, naming countries such as Sweden and the Netherlands as examples (p. 16). He explains that countries like the US, Japan and Australia have been able to keep their governments relatively small because they are “more sheltered from the forces of international competition” (p. 17) which allows them to reduce their public sectors by about half of those who are geographically located in the major international market centers (EU, East Asia). This assumption is ridiculous. The United States, Japan, and Australia are very much engaged in world economic competition. To use geographic distance as an explanation for small government in a world populated by massive container ships, warm-water ports, cargo airplanes, international telecommunications and online social networks is crude. Rodrik’s reasoning also fails to take into account the economy of Hong Kong, the most liberalized economy in the world according to the Wall Street Journal and the Heritage Foundation for 18 years running. According to Rodrik’s analysis, Hong Kong should theoretically have a large government due to it’s small geographic size, and it’s shared border with it’s major trading partner of China (roughly 48.7% of all trade in Hong Kong was with China in 2010). It’s hard