‘We need ‘thin’ globalization now — this accepts nations having their own agendas and re balances their autonomy with deep economic integration’

Q. What is the core of your research?

A. My present research focuses on strategies for promoting ‘good jobs’, by which I mean employment opportunities that are productive by a country’s standards and provide a path out of precarity into the middle class. I’ve come to believe a lot of our world’s problems — inequality, the rise of right-wing populist authoritarianism, developmental bottlenecks — are rooted in the failure of our existing strategies to stimulate and disseminate good jobs. So, that is a unifying theme in my research which spans inclusion in advanced economies, new growth strategies in developing economies and the reform of globalization.

Q. Why do you feel globalization has grown dominated by US-China competition?

A. Many had hoped hyper-globalization would lead to China becoming more democratic and, in turn, the United States and other major powers would become more interested in the gains from trade rather than zero-sum geopolitical competition — neither of these expectations has materialized. As China has become economically more powerful, geopolitical competition has regained centre-stage. The narrative around China in Washington D.C. is very different these days compared to, say, a decade ago. This, along with the backlash against globalization, has undermined the hyper globalization model — we need a new model now that recognizes nations have domestic economic, social and environmental agendas as well as national security goals that often conflict with the demands of international economic integration.

Q. What does your envisioned model of ‘thin globalization’ entail?

A. I have in mind a re balancing of the prerogatives of national autonomy versus deep economic integration. Under the Bretton Woods era, countries were given leeway to structure their economies. When the requirements of market access for global trade and investment conflicted with domestic policies, typically the former gave way. After the 1990s, we started to lean heavily in the other direction — if certain regions or segments of the labour force were hurt by the global economy, politicians’ response was, ‘Too bad, this is how globalization works — get an education or move somewhere else.’

The cornerstone of a ‘thin’ model would be the principle of ‘peaceful economic co-existence’ — each nation would recognise that other countries have different rules, regulations and aspirations about the kind of economic system they want. Diversity of national institutional arrangements would be viewed as desirable — international rules would be thin in the sense that they would not constrain governments much.

Q. You suggest that economic nationalism should not be feared — why?

A. As the economic historian Marvin Suesse has shown, economic nationalism wavers between two impulses — one seeks to restrict economic exchanges with foreign nations to advance national independence. The other wants to expand and leverage those links for national economic growth anddevelopment. When these two impulses are combined judiciously in pursuit of legitimate domestic goals, like building economic strength and reinforcing a sense of national purpose, the results can be positive without necessarily harming other nations. Prioritizing the national economy can be benign and compatible with significant openness to international trade and finance — Japan, South Korea, Taiwan and, most spectacularly, China have all relied on a mix of policies that encouraged global economic integration with strategic and selective protection of key industries.

Q. You’ve analysed the world’s biggest economic challenges in 2024 — what are these?

A. These are the climate transition, the good jobs problem, the economic development crisis and the need to develop a healthier form of globalization. These are all related to the failures of the ‘neoliberal’ or hyper globalized era we are leaving behind — they were blind spots, the issues we neglected. Addressing these will require a new kind of thinking that departs from orthodox, purist economic thought — and creative, workable solutions will be messy and experimental.

For example, in climate change, it would be nice if we could rely on global cooperation to achieve what we need — weaning ourselves off fossil fuels, developing green alternatives and shoring up defenses against the lasting environmental damage already incurred because of past inaction. However, what has become increasingly clear is that much of the needed action will come not through economists’ favored policies but individual nations forging ahead on their own green agendas, implementing policies that best address their specific political constraints — this is what the US, China and the European Union have already been doing.

What we are getting is a hodge-podge of emission caps, tax incentives, R&D supports and green industrial policies — there is little global coherence. Often these actions create international acrimony, as when countries complain about the EU’s carbon tariffs. Nevertheless, some of the most positive results have been obtained when countries push on their own. Americans and Europeans complained bitterly about Chinese subsidies to solar and wind — yet, these policies produced a significant global public good by drastically lowering the costs of renewable energy. The outcomes can be quite messy — but an uncoordinated push for climate action may be the best we can realistically hope for.

By Srijana Mitra Das

https://economictimes.indiatimes.com/epaper/delhicapital/2024/jan/12/around-the-world/we-need-thin-globalization-now-this-accepts-nations-having-their-own-agendas-and-re-balances-their-autonomy-with-deep-economic-integration/articleshow/106740936.cms