Globalization’s Trilemma and Sustainability

Can we enjoy democracy, nation state and deep economic globalization at once? This is the big question posed by the outstanding development economist Dani Rodrik in his recent book “The Globalization Paradox”. His answer is: no, we cannot have them all at the same time. We are forced to choose two of the goals instead, limiting our pursuit for the third one. As Rodrik further argues, since democracy is and remains one of humanity’s greatest achievements and one can hardly imagine a global government, economic globalization is what has to be constrained. I would like to show here that from the point of view of sustainability, his is an essential insight. Continue reading

Is Kyoto Dead?

Yvo de Boer, former secretary general of the United Nations Framework Convention on Climate Change (UNFCCC), said in an interview with the German “tageszeitung”:

The spirit of the Kyoto Protocol vanished. The body is still being artificially held alive and maybe some organs can be transplanted. But we must recognize that the Kyoto Protocol is dead.

His proposal is to give up the idea of a “post-Kyoto” and try new ideas instead – for example the establishment of a world climate organization similar to the WTO – one that would formulate standards for economic actors and give the markets more weight in combating climate change. Continue reading

Trade Should Not Be Free as a Matter of Dogmatism

In the mainstream economic thought there is hardly any place for constructive criticism of free trade. But, while the idea of free trade is not wrong in itself, it has become a dogma – no matter what it looks like in reality, in the eyes of many free trade is of unquestionable benefit. It was not always so. John Maynard Keynes once made a highly interesting remark that, regrettably, seems almost forgotten:

I sympathize therefore, with those who would minimize, rather than those who would maximize, economic entanglement between nations. Ideas, knowledge, art, hospitality, travel – these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible; and, above all, let finance be primarily national. Continue reading

The Problem Is the WTO

Kevin Gallagher from TripleCrisis wrote a very insightful article about the US-China conflict about government support of the latter for its domestic green industry. You can read it here.

Here an excerpt:

    The US claims that such impressive feats have been achieved in part by the establishment of a green fund that helps firms make wind power equipment, with the stipulation that some parts be sourced from Chinese firms. If the WTO finds that China’s green fund targets only specific sectors, that such funds are conditioned on sourcing to local firms, and that the funds are channelled to trade activities that harm US firms and workers, then China may indeed be found in violation of the WTO rules.

    But if that does prove to be the case, China should not be seen as the problem. The problem is the WTO.