Washington Post Book Reviews
For You
Wednesday March 23, 2011
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THE GLOBALIZATION PARADOX: Democracy and the Future of the World Economy
Dani Rodrik
Norton
ISBN 978-0393071610
346 pages
$26.95
Reviewed by Steven Pearlstein
It is dogma among economists and right-thinking members of the political and business elite that globalization is good and more of it is even better. That is why they invariably view anyone who dissents from this orthodoxy as either ignorant of the logic of comparative advantage or selfishly protectionist.
But what if it turns out that globalization is more of a boon to the members of the global elite than it is to the average Jose?
What if most of the benefits of the free flow of goods and capital across borders have already been realized, and that any gains from additional globalization will be outweighed by the additional costs in terms of unemployment, reduced wages, lost pensions and depopulated communities. What if global markets, to be widely beneficial, require the kind of global governance structure that does not yet exist and that most people would oppose? What if it turns out that the countries to have benefited most from free-market globalization are not those that have embraced it wholeheartedly, but those that have adopted parts of it selectively?
In "The Globalization Paradox," Dani Rodrik demonstrates that those questions are more than hypothetical -- that they describe the world as it really is rather than as it exists in economic theory or in the imagination of free trade fundamentalists.
A professor of international political economy at Harvard University, Rodrik has become one of the most powerful critics of what he calls the "hyper-globalization agenda" favored by the corporate community and academic economists. Rodrik laid the groundwork for his critique back in 1997, in his first book, which was published before the Asian financial crisis and the big anti-globalization protests. A decade and a monster global financial crisis later, he has now reframed the debate as one between "smart globalization" and "maximum globalization." Although his message is nuanced and rigorous, drawing on history, logic and the latest economic data, he manages to convey it in simple, powerful prose that any reader can follow.
The starting point of Rodrik's argument is that open markets succeed only when embedded within social, legal and political institutions that provide them legitimacy by ensuring that the benefits of capitalism are broadly shared. Defenders of globalization have always noted that the richest countries tend to be those most open to the rest of the world in terms of trade and investment.
Rodrik goes a step further by noting that the most open countries are also the ones with the biggest governments, the most extensive and effective regulation, and the widest social safety nets.
The reasons for that should be obvious, says Rodrik. Globalization, by its very nature, is disruptive -- it rearranges where and how work is done and where and how profits are made. Things that are disruptive, of course, are destabilizing and create large pools of winners and losers. Any society, but particularly democratic societies, will tolerate such disruption only if there is confidence that the process is fair and broadly beneficial. That's where government comes in: Markets and government, Rodrik asserts, are "complements."
That was true as far back as the earliest waves of globalization, when the rules of trade were set by colonial powers, often operating through chartered trading corporations that became governments unto themselves. It was certainly true during the 19th century, when the bedrock of global commerce rose and fell and rose again with the gold standard. And it was true during and after World War II, when the new arrangements adopted at Bretton Woods, N.H., explicitly recognized that the operation of the global economy should respond to the social and economic needs of individual nations, rather than the other way around.
As Rodrik sees it, where globalization began to run off the rails was when it got hijacked by the notion that any restrictions to the flow of goods or capital across borders would result in great sacrifice to efficiency and economic growth. Not only was this free-market ideology imposed by the United States on developing countries through the interventions of the World Bank and the International Monetary Fund, but it was also imposed on the United States itself through a succession of free-trade treaties, the deregulation of finance and the retreat from any semblance of industrial policy.
The irony, Rodrik notes, is that the countries that experienced the greatest growth during the heyday of the "Washington consensus" were Japan, China, South Korea and India, which never embraced it. For years, they had nurtured, protected and subsidized key industries before subjecting them to foreign competition. They had closely controlled the allocation of capital and the flow of capital across their borders. And they flagrantly manipulated their currency and maintained formal and informal barriers to imports. Does anyone, he asks, really think that these countries would be better off today if they had played the game, instead, by the Washington rules?
The paradox, as Rodrik sees it, is that globalization will work for everyone only if all countries abide by the same set of rules, hammered out and enforced by some form of technocratic global government. The reality is, however, that most countries are unwilling to give up their sovereignty, their distinctive institutions and their freedom to manage their economies in their own best interests. Not China. Not India. Not the members of the European Union, as they are now discovering. Not even the United States.
In the real world, argues Rodrik, there is a fundamental incompatibility between hyper-globalization on the one hand, and democracy and national sovereignty on the other.
Rodrik is at his weakest in trying to come up with a new framework for Global Capitalism 3.0, so I won't bother you with the details. The crucial message to take away from this important book, however, is that the worst thing we could do for the legitimate cause of globalization right now is to push it any further. In most countries, plenty of work still needs to be done to manage the economic integration that has already developed and to ensure that the benefits become more widely shared. Until that is accomplished, pushing things any further will only create political backlash and set back globalization's cause.
In his famous treatise "The Wealth of Nations," Adam Smith acknowledged that "the division of labor is limited by the extent of the market." By extending the market as far as it can go, globalization offered the prospect of finally removing all limits to specialization by workers and businesses everywhere in what they do best.
Now comes Rodrik with a much-needed addendum to Smith's famous formulation, one that the Scottish philosopher himself would have admired: The extent of the market is limited by the workable scope of its regulation.
Steven Pearlstein is a business and economics columnist for The Washington Post. He can be reached at pearlstein(at symbol)washpost.com.
Copyright 2011 Washington Post Writers Group
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EVERYONE LOVES YOU WHEN YOU'RE DEAD: Journeys Into Fame and Madness
Neil Strauss
It
ISBN 978-0061543678
507 pages
$16.99
Reviewed by James Rosen
With rollicking instant karma, Neil Strauss' greatest hits package, "Everyone Loves You When You're Dead," joins the ranks of indispensable books about rock 'n' roll, the entertainment industry, celebrity, money and human frailty, and takes its place alongside the landmark interview anthologies published by Playboy and Rolling Stone.
But where those antecedents reflected the work of dozens of journalists, Strauss, a longtime pop music critic for Rolling Stone, the New York Times and other publications, enters this chatty hall of fame as a solo act, an extraordinary feat achieved over two decades of hustling. And where the earlier anthologies brimmed with Heavy Seriousness, eager to establish that "rock journalism" is a valid literary genre, as worthy of our R-E-S-P-E-C-T as the stuffiest academic discipline, Strauss maintains a low-key bemusement at his subjects' buffoonery, and his own. This bespeaks the author's keen appreciation of how essential frivolity and fun are to good, great and deliciously bad pop music.
The methodology of "ELYWYD" is seriously flawed, however. Brief introductory passages teeing up each transcript provide little to no information about when a given interview was conducted -- and context, as Antonin Scalia would say, matters. When Neil Young is speaking, I, for one, want to know what year it is. Similarly, Strauss tells us that he mined his "original interview recordings, notes, and transcripts," including material he had "previously ignored," but he never identifies which material is being published for the first time.
Another shortcoming is his tendency to list interviews with one member of a band as an interview with the band. Thus, his testy exchange with Arthur Lee -- which, based on the scant contextual detail provided, we might conclude took place about a decade before Lee's death (which came in 2006, another fact Strauss omits) -- is billed as an interview with Love, the pioneering Los Angeles psychedelic outfit that Lee fronted ... three decades earlier. Ditto for "Led Zeppelin" (interviewee: Plant and Page, circa 1994) and "Radiohead" (Thom Yorke). Yet Strauss seems to understand that there are still some definitional lines not to be crossed: His sessions with Paul McCartney (1996) and Ringo Starr (2010), both disappointingly desultory, are listed under their surnames.
To align the stars, Strauss employs loosely thematic chapters and sometimes sequences his transcripts in daisy-chain fashion, where a person mentioned at the end of one segment promptly gets his say in the next. But let's face it: A collection like this can never achieve narrative continuity. And the fragmented, niche-oriented nature of today's entertainment industry, which has served Strauss so well, works against him in "ELYWYD." Not every reader can possibly care about every artist -- or actor, or athlete, or one-off oddball, like David Koresh's girlfriend -- whom Strauss presents. As we traverse these 500 pages, careening from Bo Diddley to Lady Gaga, from Kazem Al Saher to Gwen Stefani, Gilmour and Waters to Snoop Dogg and Ludacris, even hard-core Straussians will be tempted to skip segments. Who really wants to hear from Korn -- three times?
But for the dogged reader, surprises abound. Only one artist threatens to "kick your ass" if the article doesn't turn out well: Dolly Parton, also the lone interviewee socially conscious enough to want to "provide a lot of jobs" for her home town. Only the hardhearted will be unmoved by Snoop's advice to young rappers to "get you some attorneys" because black record executives, for whom he uses an unprintable term, "will (expletive) you over faster than white folks will." And Lionel Richie neatly expresses the disillusionment of many in this volume when, after describing his climb to the top, he asks rhetorically: "You know what was there? Nothing. Not one thing. What was at the top was all the experiences that you had to get there."
Of Strauss' 157 interview subjects, 24 of whom are not musicians, three individuals -- Snoop, Gaga and Trent Reznor -- receive four installments apiece; two -- living legend Chuck Berry and cutting-edge hip-hop producers the Neptunes -- are heard from five times; and one act -- Soul Asylum, for God's sake! -- emerges as Strauss' favorite, with an astonishing six segments allotted this grunge-era Minneapolis band best known for their early '90s hit single, "Runaway Train."
At this stage, lead singer Dave Pirner is likely unknown to any reader too young to have seen the movie "Reality Bites" in the theater; and yet it is the lion-haired Pirner, fending off a nearly lethal mix of youthful ignorance and alcoholic stupor, who manages to deliver the most insightful take on the cat-and-Strauss dynamic of the musician-interview genre. "OK, like seventy percent of this Rolling Stone article is going to be (expletive)," he correctly tells his interrogator. "And you're going to pick out some quotes to support what you think is going to fit your take on the band."
Pirner goes on to pose the twin questions that have inspired Strauss' finest work, giving us, his readers, so much to chew on and chuckle about, and yet which the author himself, still crazy after all these years, seems hard-pressed to answer: "What's Rolling Stone's angle here?" Pirner asks him. "I mean, what the (expletive) could possibly be interesting about us?"
James Rosen, a Fox News correspondent, is the author of "The Strong Man: John Mitchell and the Secrets of Watergate." He is at work on a book about the Beatles.
Copyright 2011 Washington Post Writers Group
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