**Talking Points: On globalization and trade, from Martin Sandbu. Back in the 1920s and 1930s you could prevent damage to your working class via protectionism--and you could also shift aggregate demand into your country via protectionism. Today you cannot do the first. There is some chance that you could do the second, but the odds do not look good to me:
Martin Sandbu: Globalisation Will Survive: "The emerging world has both a deep interest in keeping globalisation going and greater power to defend it than ever before...
...Erecting trade barriers between the US and Mexico is like building a wall in the middle of a factory floor. it would not make domestic industry more competitive. The same goes for the UK leaving the single market.... Anti-globalism cannot deliver: globalisation bears little of the blame for the west’s economic problems.... Just as agriculture feeds entire populations while employing only a tiny fraction of its workers, so manufacturing work will keep shrinking. The remaining jobs will be high-skilled, managing advanced machinery.... Blue-collar jobs... are not coming back...
On Globalization and Trade
Emerging Markets Want Globalization:
- Globalisation has boosted emerging economies.
- Trade helped lift more than 1bn people out of extreme poverty.
- The emerging world has:
- a deep interest in keeping globalisation going
- greater power to defend it
- will fiercely contest a return to protectionism.
International Trade Today:
- Driven by knowledge flows.
- Consists of cross-border supply chains.
- Richard Baldwin: "erecting trade barriers between the US and Mexico is like building a wall in the middle of a factory floor".
- It would not make domestic industry more competitive.
- Cannot deliver
- The shrivelling need for manufacturing workers is the price of success at boosting manufacturing productivity.
- Anti-globalists who promise to bring back factories are selling snake oil