Why The Critics Of Globalization Are Mistaken

Abstract

Being invited to give the Tinbergen Lecture is a privilege for any economist. But for me it is also a great pleasure as it brings back to me memories of, not just a great economist who won the first Nobel prize in Economics, but of a great humanist whose example affected me deeply. I first met him in Cambridge, Massachusetts, when I was a student at MIT and he was a Visiting Professor at Harvard. He was kind enough to invite me, among other students, to his home for dinner. I recall his saying, with a sense of puzzlement rather than deprecation, that many of his Harvard students had come to him just before the final examination, and had asked him: When you put down dy/dx, why don’t you cancel out the ‘d’? Well, that could not have been a question asked by MIT students! Perhaps that was why, when Professor Paul Samuelson, my teacher and then colleague and now friend, wished us to understand why the Stolper–Samuelson theorem worked because the tradeinduced reallocation of resources changed the capital/labor ratios in both goods in the same direction, he said: imagine that the worst student at MIT flunks out and joins Harvard; the average IQ in both MIT and Harvard goes up. But my next meeting was more dramatic. I had gone as a youthful OECD “consultant” to work for 3 months in the Devlet Planlama Teskilati, Turkey’s Planning Commission, in 1962. There I was, staying at a posh hotel, earning ∗ This is the final text of the Tinbergen Lecture delivered to the Royal Netherlands Economic Association in Amsterdam in October 2006. The author is University Professor, Economics and Law, Columbia University, and Senior Fellow in International Economics at the Council on Foreign Relations. His latest books, Free Trade Today (Princeton, 2002) and In Defense of Globalization (Oxford, 2004) present the economic case and the social case for globalization and for free trade, respectively in far greater depth than a Lecture permits. Some of the arguments in this Lecture will be developed further in a substantial Afterword to the new edition of In Defense of Glob