A note on Dani Rodrik, “Populism and the economics of globalization”

Abstract

As far as trade as a cause of anti-globalism is concerned, Dani Rodrik’s analysis is built on the Stolper–Samuelson theorem, which shows only a wage decline through static equilibrium analysis. Although this distributional effect on labor welfare is one focal point of populist anti-globalism, other globalization-related issues – notably, obstinate joblessness and “rusted-out” towns – for which trade liberalization is partially accountable, are serious causes (as reflected in the Trump revolution). To explain these vexing issues, this commentary introduces three additional angles: the Rybczynski theorem, Schumpeterian structuralist perspective, and multinationals-driven globalization. These perspectives can help us to understand the dynamic, structural forces generated under the liberal world order, the forces that often impinge on national interests. Some new research agenda, especially a focus on MNEs’ supra-firm and supra-national ecosystems and their capacity to adapt to the currently disrupted global ecosystem, is suggested for international business scholars.