What Might Globalisation's Critics Believe?

Alan Deardorff

The World Economy, 2003, vol. 26, issue 5, 639-658

Abstract: Critics of globalisation object to many things, some of which can be easily understood within standard economic models, but others of which seem to reflect a view of the world that economists generally do not share. This paper attempts to identify several alternative frameworks for analysis within which some of their criticisms may be understood, with the ultimate aim of extracting testable implications that differ from standard models. Three such alternative models are suggested, all of which focus mainly on the behaviour of owners and managers of corporate capital: an anti‐labour model, in which capitalists are willing to sacrifice some of their own profits for the chance to make labour worse off; a labour‐monopsony model in which capitalists co‐operate globally to increase profits by depressing wages; and an international political economy model in which capitalists use their resources to influence the political process for more than just obtaining import protection. This third framework, which is not spelled out in any detail here, has capitalists seeking policies such as export subsidies and other means of promoting market access, and it also has them influencing the international negotiations that set the rules of international agreements and organisations, such as the NAFTA and WTO. Examples of the latter sort of influence are discussed.

Date: 2003
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