David Warsh: Trump, Rodrik and the clash of global integration, national sovereignty and democracy

David Brooks, of The New York Times, wrote the single best piece I read last week on the Republican convention: “Death of the Party.” Like him, I was riveted by Donald Trump’s acceptance speech. The scene seemed straight out of one of those dystopian Batman movies of the 1980s, ’90s, and ’00s, an outlandish character, sailing under false colors, bullying and threatening, preying on fears, selling Gotham a bill of goods, preparing chaos.

By the time the nominee bellowed, “I am your voice” to the hall of delegates, he seemed simply the latest in a long line of improbable adversaries: the Joker, the Penguin, the Riddler, Mr. Freeze, Poison Ivy, Ra’s al Ghul, the Scarecrow, Bane, Mr. Trump.

But then Batman movies depend on the Caped Crusader, the Dark Knight, to answer the Bat signal, expose the fraud, counter the villains’ plans, and save the city.

Batman in this case is Dani Rodrik, 58, of Harvard University’s Kennedy School of Government. He is likely to be the next economist to enter the pantheon of those who went to school in the ’70s whom much of the public knows today” Jeffrey Sachs, Paul Krugman, Larry Summers, Ben Bernanke.

His father, a Turkish manufacturer of ballpoint pens, was happy to finance his son’s education in the United States: Harvard College, ’79, before graduate school at Princeton University, where his adviser was Avinash Dixit. Rodrik’s first job was at the Kennedy School, in 1985. He taught for four years at Columbia University, 1992-96, then returned to the Kennedy School.

In 2013 Rodrik ascended to one of the pinnacles of the profession, replacing Nobel laureate Eric Maskin as the economist on the faculty of the Institute for Advanced Study in Princeton, N.J .He returned to the worldly bustle of the Kennedy School after only two years. Something of an explanation of the journey is to be found in Economics Rules: The Rights and Wrongs of the Dismal Science (Norton, 2015). Maskin, too, returned to Harvard and teaching after a few years; the Institute has no graduate students, only fellows.

In 1997, Rodrik published a monograph that boldly asked, “Has Globalization Gone Too Far?’’ (Institute for International Economics). He argued that trade was creating deep divisions between those who possessed the skills to thrive in global markets and those who lacked them.  Redistribution to the losers of the gains from trade were almost wholly lacking, and globalization seemed to have permanently altered the norms surrounding domestic production in nations all around the world. There was bound to be a backlash.

In “Rebel with a Cause,” in the International Monetary Fund’s Finance and Development magazine, he told economist Prakesh Loungani that Harvard Prof. Andrei Shleifer, then advising the Russian government on privatization, would josh him whenever they met, “How is the revolution going?”

It was Shleifer who, as, editor of the Journal of Economic Perspectives, published Rodrik’s 2000 article “How Far Will International Economic Integration Go?” in which he broached what has since come to be known as “the globalization trilemma.”

Democracy, national sovereignty, and global integration were mutually irreconcilable, Rodrik argued, because of the political strains that inevitably would emerge.  Nations could have any two of the three possibilities, but could never have all three at once at least not in strong forms.

In 2000, Rodrik predicted that the nation-state eventually would disappear; that global federalism would take its place.  By the time The Globalization Paradox: Democracy and the Future of the World Economy appeared (Norton, 2013), he was no longer quite as sure.

By then, though, Rodrik had ceased to be a gadfly critic, and was well on the way to becoming the foremost policy authority on the political economy of global trade.  Just ahead lay Brexit and the insurgent candidacy of Donald Trump. As Loungani writes in “Rebel,” the revolution was over and Rodrik had won.

Here, too, as in the movies, there is a foil, not a Robin-like sidekick, but a philosopher, Harvard Law Prof.  Roberto Mangabiera Unger, a native Brazilian whose influence extends around the world to politicians on the Left.  Rodrik and Unger taught a Harvard course on trade together for many years.

Unger habitually argued that economics had lost the capacity for grand narrative; Rodrik countered that small-scale theorizing about cause and effect was good enough, at least for now. The prolific Unger produced a book, Free Trade Reimagined: The World Division of Labor and the Method of Economics (Princeton, 2007), a demanding survey of the intellectual underpinnings of contemporary views on trade. The Globalization Paradox and Economics Rules followed in due course.   For an introduction to the peripatetic Unger, read about the luncheon that ensued when John Paul Rathbone, of the Financial Times, came calling.

You have to go back to a sunnier time, the ’60s, and a memorable network television series, to find a more congenial Batman to serve as a stand-in for Rodrik as a crime-fighter. That series thrived, the Wikipedia entry says, by presenting relatively simplistic moral lessons aimed mainly at the young, including championing the importance of using seat belts, doing homework, eating vegetables and drinking milk, wrapped up in the story of one caper after another in which some villain tries to take over Gotham City. Today, it’s probably remembered best by those who saw it for its campy tone, especially Robin’s non-stop exclamations of astonishment at each new twist of the plot.

Rodrik isn’t exactly fighting with Trump, the way  that Batman fights with those villains.  He is, by his own account, recasting the globalization narrative, replacing the familiar triumphalist version with a more nuanced account, including the ill-effects of integration that gave rise to the Trump and Bernie Sanders campaigns, and those of H. Ross Perot and Pat Buchanan before them.  (Meanwhile, Rodrik is interpreting events in Turkey as well.)

The Trump campaign supports no intellectual edifice whatsoever. For all its flaws, it is up to the Clinton campaign to begin translating into political terms the deeper understanding globalization – its costs as well as its benefits – that Rodrik, Unger, and many others have been working out.

Holy Hoodwink, Batman!  Let’s get to work!

David Warsh is proprietor of economicprincipals.com, where this first ran, and a longtime economic historian and financial columnist.