"It is the externalities that should give us pause, not the alleged power of government or money centers: I mean particularly the unsolved problems of wealth allocation (as opposed to creation) and the environmental impact of production."

Thanks for elevating the conversation by explaining to us that the correct Davos term of art for our minor concerns about human rights and the long range political and environmental impact of globalization is "externalities", I guess after we finish our momentary pause over these externalities we should all just run along and watch American Idol, since that's the level of discourse we can understand.

Thanks also for clarifying the fact that the real problem with worrying about the dark underbelly of globalization is that it is seriously tacky. I mean, it just isn't *done*. Excuse me while I freshen up my drink, can I get you anything from the bar?

Parody aside, do you have any policy recommendations to address these externalities? After taking all forms of regulation off the table, what policy tools do you see lying around?

As for the power of governments, it really is a *lack* of power which troubles me. Specifically, the fact that we are unable to enforce trade agreements against our bankers (eg the PBoC) so even if we wanted to pressure the Chinese to mitigate environmental degradation or curb human rights abuses, we'd be out of luck. (China is only one example, but a useful proxy for the larger question.)

Posted at March 3, 2007 3:49 AM in response to Is this American Idol?

Here's my version of the "two worlds":

A. (DeLong): The United States is drawing China inexorably into a bright future of universal liberal democracy and capitalism.

B. (Faux): China is drawing the United States inexorably into a shadowy future of universal authoritarian state capitalism where quaint 18th century notions about "life, liberty and the pursuit of happiness", or "We the people" repose quietly in dusty museums.

I think DeLong and most other establishment figures are relying rather heavily on the sainted Milton Friedman and his "Free to Choose" liturgy (political freedom flows inevitably from economic freedom) for their confidence that we are living in World A.

I'm with Faux in worrying that there is a troubling lack of real evidence to support the St. Milton-ian faith in economic determinism. Come to think of it, didn't economic determinism go out of fashion along with Marxism? Apparently it only got converted into Friedmanite economic determinism.

Maybe those living in World A can help me with my faltering faith in the transubstantiation of economic freedom into political freedom. Save me from heresy if you can -- but I'm more disposed to be persuaded by evidence than rhetoric. I hope that isn't already my undoing ;)

Posted at March 2, 2007 6:03 PM in response to Which World is the Real One?