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1:03

So one

1:03

big comments of globalization was

1:05

that countries as they became

1:08

more integrated in the global economy

1:10

would also modernize on a

1:12

political dimension. Some people

1:14

argued that economic globalization was going

1:16

to be the US's best ever

1:18

effort at spreading democracy. I'm

1:21

curious how successful or unsuccessful

1:23

you think that's been. One of the things that I think

1:25

has clearly come out from both Russia and

1:27

China is that that has not

1:30

borne fruit in quite the way the United

1:32

States may have hoped. But

1:34

part of it may also be that the US may

1:36

be that story little bit. It

1:38

may have been that they wanted to say that

1:40

it was about democracy, but actually a

1:42

lot of it was also just about their own economic

1:44

interests

1:44

and now their understanding of their economic interests

1:47

have changed. What

1:49

kind of

1:49

stories do we tell ourselves about

1:52

economic globalization, about

1:54

how countries interact and compete

1:56

with each other? That is a question

1:58

Anthea Roberts has spent years thinking

2:00

about. She is a lawyer by

2:02

training and now a professor at

2:04

the Australian National University. She's

2:07

also the co author with Nicholas Lamp

2:09

of a book called six faces

2:12

of Globalization. Who wins?

2:15

who loses and why it matters.

2:17

Their main point is simple

2:20

but also profound. We

2:22

all tell stories about our

2:24

economic lives. We as individuals

2:26

and countries too, but we don't

2:28

all tell the same story. Maybe

2:30

you prefer the story about how

2:33

a rising tide lifts all boats,

2:35

or the story about how

2:38

China is stealing America's jobs.

2:40

or maybe the one about how our planet

2:43

is on an unsustainable trajectory and

2:45

that GDP is a terrible measure

2:48

of prosperity. Most

2:50

of us, when we subscribe to one

2:52

of these stories, we tend to discount or

2:54

ignore the others. yours

2:57

surely is the right story.

2:59

The others must be wrong. But

3:02

in the words of FCot Fitzgerald, The

3:05

test of a first rate intelligence

3:07

is the ability to hold two opposing

3:09

ideas in mind at the same time

3:11

and still retain the ability to

3:13

function. Anthony Roberts

3:16

is able to hold six opposing

3:19

ideas in mind Today, on

3:21

Freakonomics Radio, we unpack all

3:23

these stories in order to answer

3:25

a big question. Has

3:27

economic globalization been

3:30

a failure. Think about

3:32

the US China relationship. There

3:35

have been upsides. And

3:37

so that has lifted hundreds of millions

3:39

of people out of poverty. It's

3:41

really increased consumption, and

3:44

it's made our lives much more diverse. everything

3:47

from food to electronics. But

3:49

I think at the same stage, if you look on other

3:51

metrics, it's had some really damaging

3:53

effects. We ever seen left behind

3:55

communities that have created much more of

3:57

a backlash. We've also seen

3:59

increase in suicide, increase in drug addiction,

4:02

we are seeing those communities really

4:04

falling apart. A recent global survey

4:07

by Ipsos found that only forty eight

4:09

percent of respondents said they globalization

4:11

is a good thing for their country.

4:13

And that number has fallen sharply in

4:15

the past few years. So

4:17

what's the best way forward.

4:20

I tend to be a little bit less convinced

4:22

that I know exactly what the right answer

4:24

is. Will that stop us from asking

4:26

the question? No chance.

4:41

This is freakonomics radio,

4:43

the podcast that explores the hidden

4:45

side of everything with your

4:47

host, Steven Dubner.

4:56

Over the years on this show, we

4:58

come at the topic of globalization from

5:01

many angles. We would conservatively

5:03

estimate that more than

5:05

a million manufacturing jobs in the

5:07

US were directly eliminated between

5:09

two thousand two thousand seven as a

5:11

result of China's

5:13

accelerating trade penetration in the United

5:15

States. That is the American

5:17

economist David Otter from a

5:19

twenty seventeen episode. The

5:21

accelerating trade penetration was

5:23

a result of China joining the

5:25

World Trade Organization in two thousand one.

5:28

Otter's analysis focused on

5:30

US labor outcomes. Some

5:32

people are leaving the labor market, some are

5:34

going into unemployment, some people are going on

5:36

disability. And so

5:38

the reallocation process seems

5:40

to be slow, frictional

5:43

and scarring. Slow, frictional

5:46

and scarring. That

5:48

is not what most economists

5:50

told us would happen. more

5:52

global trade was supposed to

5:54

mean more growth even at

5:56

home as manufacturing jobs

5:58

were offshore.

5:59

Yes, some American jobs would be

6:02

lost, but those workers were

6:04

supposed to be retrained and

6:06

reallocated as Otter puts

6:08

it into better job jobs. In

6:10

her book, six faces of globalization,

6:12

this is what Anthea Roberts calls

6:14

the establishment narrative. The

6:16

first of the six stories we

6:18

tell ourselves. That's the idea that

6:20

economic globalization is a

6:22

win for everyone. It's a rising tide that

6:24

lifts all boats it's growing at the pie so

6:26

that everybody can have a greater slice.

6:29

One of the things that's obviously happened

6:31

is you've had a relative

6:33

decline in the share of the global economy

6:35

from the developed world and from the United

6:37

States, and a relative increase

6:39

in the share of the global economy from

6:41

developing countries. But uniquely

6:43

from the Asian region. What would you think

6:45

of this way of looking at things then? America

6:48

didn't get what it wanted.

6:50

fully out of economic globalization

6:52

or at least not yet. And there's been a lot of

6:54

downside and a lot of pain, although a lot of

6:56

upside certainly as well. But the good

6:58

news is that the rest of the world has

7:00

benefited at a faster pace.

7:02

And therefore, it's pretty good trade off

7:04

because the US is so rich to

7:06

start with And therefore, we

7:09

should actually rejoice in the

7:11

way that economic globalization has

7:13

worked out so far. Is that a narrative

7:15

you would endorse? So that doesn't

7:17

take into consideration the way people

7:19

actually value things or the way states

7:21

actually work. Many people

7:23

might say, look, as long as we

7:25

maximize global welfare, then

7:28

that's the best outcome. But it's very,

7:30

very clear that that's not the way individual

7:32

all the way states approach it. Well, there are a

7:34

few academic economists and

7:36

others who think that way, but most people

7:39

couldn't care less about that. So we

7:41

find individuals are incredibly

7:44

sensitive to relative

7:46

gains, but particularly to relative losses.

7:48

and I would say countries as well

7:50

are particularly concerned

7:53

about relative losses.

7:56

As

7:57

a child, Roberts excelled on

7:59

the

7:59

debate team.

8:00

This led perhaps logically

8:03

to the study of law, after which she

8:05

spent several years with the big international

8:07

law firm, Debervoy's and Clinton.

8:09

So

8:09

we did a lot of work for government, but

8:12

we also did work for corporations that

8:14

were suing governments. But she

8:15

wound up leaving the private sector for

8:18

academia. She has since taught

8:20

at a variety of law schools and

8:22

won a variety of awards for her

8:24

writing and research. Today,

8:26

she focuses on what is called global governance.

8:29

sort

8:29

of broaden out to not just look at

8:31

the applications of laws, but also the

8:33

way in which we govern

8:35

different regimes. And when you say the way

8:37

in which we govern? Who's the we?

8:39

That's a really good question.

8:41

So I think when people think about international

8:44

law, they very much think about states

8:46

and states coming together in international

8:48

organizations. But global

8:50

governance, I think, thinks about it more

8:52

broadly. So you would think about participation

8:55

of companies of

8:57

NGOs or various actors that

8:59

help create the different ways in

9:01

which our world and our economy

9:03

function.

9:06

consider, for instance, the World Trade

9:08

Organization. It was founded in

9:10

nineteen ninety five with a mission to

9:12

ensure that trade flows

9:14

as smoothly, predictably, and

9:16

freely as possible. In

9:18

twenty eighteen, we interviewed the

9:20

then head of the WTO, Roberto

9:23

Azvedo. Trade between

9:25

China and the US wasn't

9:27

particularly smooth, predictable, or

9:29

free, and the Trump administration was

9:31

just ramping up tariffs against

9:33

China. Here's what Azevedo told

9:35

us. Regardless of whether or not

9:37

we are in a full blown trade war, I

9:39

think not a full blown

9:41

trade war, I think the first shots have

9:43

been fired clearly. And

9:45

those hostilities have outlasted

9:47

Trump. The Biden administration

9:49

has not only kept tariffs in place,

9:51

but They recently restricted

9:53

US companies from selling

9:55

computer chips or chipmaking technology

9:58

to Chinese. And

10:00

thea Roberts says the establishment

10:02

narrative of globalization has been

10:04

attacked in the US from both sides

10:06

of the political spectrum. From

10:08

figures like Trump, you'll get a right

10:10

wing populist argument. We

10:12

can't continue to allow

10:15

China to rape our country, and

10:17

that's what they're going. It's the

10:19

greatest theft in the history

10:21

of the world. The

10:21

right wing populist narrative, they

10:24

see the elite having allowed

10:26

an external other to take advantage

10:28

of

10:29

the people. It can

10:30

also be that they have failed to protect

10:33

the domestic native population

10:35

from external threats in the fall of things like

10:37

immigration. And

10:38

some politicians on the left are

10:40

just a skeptical of free trade,

10:42

like senator Elizabeth Warren,

10:44

They

10:44

put the level playing field promises

10:47

in those trade

10:47

deals. Good luck on getting

10:49

them enforced. The left

10:51

wing populist narrative really

10:53

takes issue with the establishment narratives

10:56

assumption that you're going to have redistribution.

10:58

They say no, actually, the

11:00

gains from economic globalization. have

11:03

been accrued largely by the

11:05

rich and at the expense of the

11:07

middle class that has been hollowed out to the

11:09

creation of now a larger and

11:11

more insecure service class.

11:13

So these are the first three

11:15

of the six narratives that Roberts

11:17

explores, the establishment view,

11:19

which defends globalization and

11:21

the populist challenges from the

11:24

left and the right. you may

11:26

well subscribe to one of these narratives

11:28

yourself. But Robert has

11:30

three more narratives to consider, each

11:32

of them critical of globalization.

11:34

The first is what she calls the

11:36

geoeconomic narrative. Now the

11:38

geoeconomic narrative says, what we want to do

11:40

is focus on countries as

11:42

a whole, but in particular, on

11:44

great power rivals. And here, the leading

11:47

example is the United States and China.

11:49

And from the geoeconomic perspective, they

11:51

would say, yes, China and the United

11:53

States have both gained in terms of

11:55

absolute economic outcomes

11:57

from period of globalization, but

11:59

that China used this period to catch up

12:01

with the United States, to

12:04

reduce the US' lead economically,

12:06

militarily, and technologically, and

12:08

that's now creating all sorts of geopolitical

12:11

and security concerns. In other

12:13

words, trade is as much a

12:15

foreign policy issue as an economic

12:17

issue. And when you dwell on the

12:19

costs and benefits of the economics,

12:21

you might miss geopolitics. Or

12:24

if you want to think about it in terms of trade

12:26

off, economic gains

12:28

may come at the expense of

12:30

national security. That is

12:32

Robert's fourth globalization narrative.

12:35

The fifth is called the

12:37

corporate power narrative. A

12:39

corporate panel narrative says, actually, we've got

12:41

the wrong unit of analysis that

12:43

really the winners are not particular

12:45

classes or particular communities or even

12:47

particular countries. The real

12:49

winners here are the multinational corporations

12:52

that are able to use trade and

12:54

investment deals to hop,

12:56

skip, and jump all around the world. And so

12:58

this idea is really that what globalization

13:00

has done is it has strengthened the

13:02

hand of transnational capital against

13:05

the hand of transnational labor.

13:07

If that strikes you as a

13:09

depressing story, you might want to take

13:11

a breath because her sixth

13:13

and final narrative is the

13:15

most depressing of all. You will recall

13:18

that the establishment narrative, the

13:20

first one she discussed, told a

13:22

win win story It's

13:23

a rising tide that lifts all boats or it's a

13:25

growing at the pie so that everybody can have

13:27

a greater slice. And all the

13:29

other narratives have at least some

13:31

winners. But her

13:33

final narrative. When we go to the

13:35

final narrative, it's what we would think of

13:37

as a lose lose narrative. She

13:39

calls this the global threats

13:42

narrative. So here, we see that

13:44

there are certain global threats that have

13:46

either been caused or exacerbated

13:48

by economic globalization. And

13:50

obviously, the climate crisis is one that

13:52

is front and central, but we can

13:54

also see it with things like pandemics. On

13:56

this idea that actually the way that we

13:58

have integrated our economies

13:59

and pushed so relentlessly

14:02

hard for economic efficiency,

14:04

has created or exacerbated these global

14:06

threats that now have put us on a

14:08

collision course with our planet.

14:12

Which of Roberts' six

14:14

narratives lines up best with how you

14:16

see the world. They all have their

14:18

share of noisy

14:20

advocates and they're not all mutually

14:22

exclusive. But each of them does

14:24

coalesce around a different set of concerns.

14:26

That's one reason the

14:29

conversations about Wilbur's get

14:31

heated and fast. If

14:33

you are looking through the lens of

14:35

one narrative, it can be really

14:37

hard to even sitter the view

14:39

from another. And thea

14:41

Roberts herself won't pick a

14:43

favorite. I

14:44

am much more interested in

14:47

giving people tools that

14:49

help them in how to think about

14:51

complex problems rather than telling

14:53

them what to think about complex

14:55

problems. How do you weigh economic

14:57

efficiency against concerns about traditional

14:59

loyalty or how do you weigh economic

15:01

efficiency against concerns about

15:03

national security? I don't actually think that there is a

15:05

clear right answer to that.

15:06

thing you write early in the book is that

15:09

as we disentangle the debates that have been

15:11

playing out in the Western media,

15:13

six prominent narratives around the

15:15

winners and losers from economic globalization

15:17

emerged. Now when you say these stories

15:19

have been playing out in the western media,

15:21

I wanted to ask you how

15:24

influential the media

15:26

is in not just

15:28

presenting these different narratives, but

15:30

making them believable because

15:32

Those of us who make journalism would say that we

15:35

typically reflect the reality.

15:37

It seems as if you're saying

15:39

that the media to some large degree

15:42

shapes the reality. The media

15:44

is reporting and reflecting on

15:46

and trying to make sense of what they see.

15:48

But in doing that, they also

15:50

create storylines, create ways of

15:52

understanding things that then feed into what people

15:54

read and see in their lives as

15:56

well. And so the media

15:58

kind of reflects reality

15:59

but also helps shape the next round of

16:02

reality.

16:02

As a member of said media, I have to

16:04

say, I don't want someone like me shaping

16:06

the economic global reality.

16:08

It's not that I'm not invested in it,

16:10

but it's not my role. It's not what I'm

16:12

good at. I don't have enough information. I don't

16:14

have enough leverage and so on. Do

16:16

you feel the media narratives are

16:18

too influential? I don't think the

16:20

media is doing this by themselves. We clearly

16:23

see politicians doing this

16:25

one of the things that you saw the media do

16:27

after the Trump election

16:29

in two thousand sixteen was really do a

16:31

lot of soul searching of how do we miss

16:33

the story that was coming out of so many

16:35

places and how did we assume Hillary

16:37

Clinton would win or how do we just assume

16:39

that people were racist or

16:41

xenophobic or stupid and didn't

16:43

understand their interests. And so

16:45

I think one of the things you've seen

16:47

in the US is a bit of a reckoning

16:49

of the need for greater inputs and

16:51

diversity in terms of how you're

16:53

reporting on things domestically. But

16:55

I think that there would also be an argument for doing

16:57

that internationally because just as your

16:59

Eastern West Coast dominate in the United

17:01

States. The Western media and the English speaking

17:03

media dominates globally, and that makes it

17:05

just much harder to understand perspectives

17:08

from elsewhere. It makes me think

17:10

of Philip Tetlock, the psychologist

17:12

whose work I know you are very familiar with,

17:14

and he's studied a lot of things, but

17:16

especially forecasting in the fact that most of

17:18

us are quite terrible at

17:20

prediction. I asked him once to

17:22

summarize the traits of someone who's particularly

17:24

bad at predicting. And he said, yeah, there's one

17:26

thing. It's dogmatism. just

17:28

drop the dogmatism and you'll

17:30

immediately be much better. Now, that's

17:32

obviously much easier than it sounds. Do

17:34

you have any general anti dogmatic advice.

17:38

Dogmatism is a killer because it makes

17:40

you convinced that your perspective is right and

17:42

so the people who disagree with you

17:44

must be either stupid or malevolent.

17:46

I would say, you want us to have active

17:48

open mindedness and curiosity.

17:51

but you deliberately practice empathy

17:53

of trying to see things through

17:55

others' eyes without immediately

17:58

judging them. The reason we use the idea of

17:59

six faces is we end up putting

18:02

these celebrities onto the sides

18:04

of a Rubik's cube. And one of

18:06

the reasons I would do that is a way to

18:08

intuitively get people are thinking in a more

18:10

three-dimensional way. You may have your preferred narrative,

18:12

but if you view everything through that

18:14

narrative, you tend to have a very one dimensional

18:16

view of what's happening. If you

18:18

just look on a corner and you see two different narratives,

18:20

you often have a very polarized view of

18:22

what's going on. But if you zoom

18:24

out and look at things from many

18:26

different perspectives, You will also have

18:28

a greater ability to think

18:30

about ways that you might be able to mix and

18:32

match different approaches so that you

18:34

can come to new coalitions going

18:36

forward. That, we should say, isn't

18:39

so easy to actually do

18:41

after the break. If

18:43

you treat China like the enemy, China will

18:45

become the enemy. Also, a lot

18:47

of people rate to us at

18:50

radio at freakonomics dot com to ask how they support

18:52

our show. Okay. I'll

18:54

tell you how. The next time a

18:56

friend or family member is looking for a

18:58

podcast to listen to, tell

19:01

them to listen to Freakonomics Radio.

19:03

It's that simple, really? Personal

19:06

recommendations are the single

19:08

biggest driver of podcast listens.

19:10

So thanks for doing your

19:12

part. I am Stephen Dubner. We will be

19:14

right back.

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vast one at a vast dot

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dot com. For

21:48

a while,

21:52

economic globalization was seen as

21:54

a sort of panacea that would raise prosperity

21:56

around the world while also

21:58

smoothing out geopolitical relationships.

22:00

relationships it

22:02

hasn't always worked that way, especially from the

22:04

American angle. Russia and

22:07

China have moved further into

22:09

authoritarianism, even in

22:11

the west, nationalism is on

22:13

the rise. But even among

22:15

centrist Liberals, some of whom were the

22:17

biggest champions of

22:19

globalization. Many of them

22:21

are also treating from

22:23

pure free trade principles.

22:25

Jake Sullivan, the Biden

22:27

administration's national security adviser,

22:29

recently said Biden is looking to move

22:32

beyond the old model of

22:34

free trade agreements to a

22:36

model that is more geared to today's

22:38

economic realities and the

22:40

lessons of the last thirty

22:42

years. And thea Roberts,

22:45

The legal scholar and author we are

22:47

speaking with today has

22:49

identified six narratives that

22:51

govern our thinking about

22:53

globalization. I asked her which of those narratives

22:55

the Biden administration appears

22:57

to subscribe

22:59

to? The Biden

23:01

administration is actually trying to bring

23:03

together multiple narratives.

23:05

I can give you a couple of examples of

23:07

that. I think the chips act

23:09

and also the inflation reduction

23:11

act. Both have this

23:13

element. Chips stands for creating

23:15

helpful incentives to produce

23:17

semiconductors. So the chips act

23:19

is a huge investment in

23:21

semiconducting manufacturing and trying to bring that back onshore

23:23

to the U. S. so that really

23:26

combines a geoeconomic narrative of

23:28

wanting to invest in cutting

23:30

edge technologies in terms of global competition

23:32

and it's got a very strong resilience

23:35

aspect to the narrative of not wanting

23:37

to rely on semiconductors being

23:39

manufactured ninety percent in

23:41

Taiwan, which may be subject to

23:43

invasion. It's got a strong protectionist

23:45

element of wanting to build back

23:47

domestic manufacturing. We're even seeing the big

23:49

Taiwanese chipmaker TSMC is

23:51

building a factory in Phoenix. Right?

23:53

Exactly. So the chips

23:55

act, you actually got bipartisan support

23:57

for. Where you've got more of a

23:59

division

23:59

along party lines was the Inflation

24:02

reduction act. That one has a

24:04

very strong climate first sort of

24:06

clean energy transition, which is obviously

24:08

something that is not bipartisan. But

24:10

one of the things you can see

24:12

is that they have, I think, a seven and a

24:14

half thousand sort of tax credit

24:16

towards electric vehicles,

24:18

but you cannot have that

24:21

subsidy if any of the parts of your electric

24:23

vehicle have been manufactured in China.

24:25

And so there you see a

24:27

Biden administration that really wants to do clean energy, but

24:29

also wants to do it in a way that

24:32

supports technological investment with

24:34

allies and onshore and sort of

24:36

undermine support for technological investment

24:39

in China. That's bringing together

24:41

of multiple narratives.

24:44

So to what degree would you say the

24:46

Inflation Reduction Act and the Chips Act

24:49

are what we might call a

24:51

nationalist retrenchment. In other words, a pullback

24:53

from what we typically think of

24:55

as economic globalization. They

24:57

definitely have a strong nationalist element to

24:59

them, but it's not always just nationalist.

25:02

They have a very strong

25:04

climate change direction towards

25:07

them. They also have a much stronger

25:09

focus on friend shoring

25:11

or ally shoring than previously. Instead

25:13

of just open economic globalization,

25:16

we're gonna see more regionalism, but we're

25:18

also gonna see more economic

25:20

agreements that are based on political

25:22

and values alliances. Let

25:24

me ask you a question about the Chinese

25:27

perception of the US. I

25:29

read a piece recently called the rise

25:31

and fall of Chymerica, and the

25:33

argument was that for decades, China was

25:37

infatuated with the US for its

25:39

prosperity and its superpower status,

25:41

but that as China gained on

25:43

the US, that infatuation and

25:47

respect began to decline. Here's

25:49

a quote from the piece. They cannot believe that

25:51

a society can keep rolling

25:53

along as chaoticly as

25:55

America seems to do. I'm curious

25:57

if you have anything to say about

25:59

that observation whether you

26:02

think it's true, first of all,

26:04

and if you think that that change of

26:06

mind is really affecting the

26:08

geopolitical relationship between the US and

26:11

China? I think that change of mind

26:13

is real. I remember reading the

26:15

people who done work in America and they

26:17

said back in China that they used to

26:19

always be called on to explain

26:21

America as an example of how can we do this or how

26:23

can we do that? and now they're called on to

26:25

explain America is like how do we

26:27

not end up with that sort of inequality or how

26:29

do we not end up with that polarization?

26:31

I also think that there has

26:34

been a real sense in China

26:36

that the United States is trying

26:38

to contain China's rise and that that

26:40

is something that really pricks

26:42

a strong national consciousness because of

26:44

their experience with this century of

26:46

humiliation at the hands of the

26:48

west. The century of humiliation is

26:50

the period of Chinese history starting

26:52

with Britain's defeat of China in the first

26:54

opium war fought from eighteen thirty nine

26:56

until eighteen forty two and

26:58

ending with the founding of the

27:00

people's Republic of China in nineteen forty

27:03

nine. If you treat China like the

27:05

enemy, China will become the enemy. Negative

27:07

interactions are much

27:10

more powerful then

27:10

positive interactions. This was

27:12

worked by John Gutman and his wife. And

27:14

they first discovered this when they

27:16

were looking at marriages. They

27:19

found you needed to have five

27:21

positive interactions to counteract

27:24

every negative interaction. We're

27:26

definitely not at the five positive to one

27:28

negative. In fact, we might be in

27:30

the reverse. I've read that some

27:32

multinational firms are making contingency

27:34

plans in case China

27:36

actually goes to war over

27:39

Taiwan Can you tell me what you know about that? I

27:41

definitely think that that's happening. One

27:43

of the things that we saw with

27:45

Russia invading Ukraine is many

27:47

people who thought that sort of would

27:49

be unimaginable. It suddenly made it imaginable. And

27:52

so a lot of governments and a lot of companies

27:54

are started to think, okay.

27:56

Well, if there was a war

27:58

over something like Taiwan,

28:00

what would we do? What sort

28:02

of sanctions would be

28:04

at what point would companies leave?

28:06

And so that sort of game planning

28:08

is happening in the private sector

28:10

and with governments. I'd like you to talk

28:12

about how Russia has experienced globalization

28:15

very differently from the US

28:17

and relatedly Putin has

28:19

repeatedly called Ukraine the West's

28:21

anti Russia project. So

28:24

should we interpret Russia's war

28:26

in Ukraine as a fight against

28:29

globalization to some significant degree.

28:31

At the same stage as you saw many

28:33

in the west celebrating a fall

28:35

of the Berlin Wall globalization and

28:37

all the wonders of that. What we

28:39

saw happen in Russia is a

28:41

big bang approach towards

28:44

economic reforms. And

28:46

those have ended up creating

28:49

incredible problems in the Russian economy.

28:51

So we saw a creation of a

28:53

system where things got sold off very

28:55

quickly at very small prices. They were

28:57

often bought by people that were politically

28:59

connected. It created tremendous

29:02

lawlessness, tremendous drop in incomes, they had their own

29:04

deaths of despair, extraordinary

29:06

levels of inequality. By the time

29:08

Putin came back in There was a

29:10

real sense from many people in Russia of, you

29:12

know, we tried your Western approach and it

29:14

really didn't work for us. One of the things

29:16

Putin would say is, that the end of

29:18

the Soviet Union was the great

29:21

geopolitical travesty for

29:23

Russia. And so it's got a very,

29:25

very different experience of economic globalization.

29:27

I think what you're starting to see be

29:30

articulated by Putin is this

29:32

sort of idea of the US and the

29:34

West have been hedgemonic

29:36

in setting the rules, but also hypocritical

29:38

in not following the rules when it doesn't

29:40

suit their advantage. What's an example

29:42

of that? the war in Iraq would be an

29:44

example of that. The West would be very

29:47

strongly condemning Russia's use of

29:49

force and then want to say that

29:51

they had security council authorization,

29:53

at least implicitly, to go into Iraq.

29:55

There are also examples where

29:57

the West uses what Putin would call

29:59

its hegemonic advantage. So the way that

30:01

the United States and the West control

30:04

economic sanctions or the swift

30:06

banking system. What you really see

30:08

Putin saying is that what's

30:10

happening in Ukraine is not really

30:12

about just Ukraine. And it's actually

30:14

not just about NATO expansion.

30:16

What it's really about is standing up

30:18

against Western hedge money. Talk

30:20

for a moment about the

30:22

political but especially economic

30:25

aftereffects of this war. clearly, we don't know how

30:27

things are going to turn out. But between

30:29

Russia and Ukraine, they export, I think,

30:31

about thirty percent of the

30:33

world's wheat Russia

30:35

had been sending a lot of heating

30:37

oil to Europe. So

30:39

talk about who will be missing out

30:41

and losing out and who will be winning.

30:43

For instance, I see that Abu Dhabi now going to

30:45

be delivering its first shipment of natural

30:47

gas to Germany later this year.

30:50

So what kind of political but

30:52

especially economic scramble do you see being

30:54

produced by this war? There

30:56

are gonna be the short

30:56

term economic scrambles

30:59

on things like food security.

31:01

we think about things like bread crisis as being

31:04

one of the factors that led to the

31:06

Arab spring. I think that the

31:08

medium term to longer term

31:10

shift though is going to be twofold.

31:12

The first is that the West

31:14

is very much cutting Russia off as

31:16

an unreliable partner, so that will make it

31:18

look more towards China.

31:20

What I think it's done in

31:23

Europe is an extraordinarily

31:26

fast realization. that

31:28

they had become economically

31:30

independent on core parts of their

31:32

economy, including in a very

31:34

concentrated way on certain other

31:36

economies, but in particularly in a very concentrated

31:38

way on countries that they

31:40

now consider to be foes.

31:42

So let me ask you naive

31:44

question. Is the global economy

31:46

actually globalized? I

31:48

think it has never

31:51

been fully globalized and it's

31:53

becoming less globalized. Some

31:55

things globalized more than others. You

31:58

know, trading goods has globalized more than

31:59

others. But even then you see things like

32:02

the gravity model of trade that

32:04

suggests that a lot more trade

32:06

happens more closely than at further

32:08

distances. So it's never been pure.

32:10

In things like migration, actually,

32:12

even though there's very strong pushback to immigration.

32:15

Migration levels are not massively

32:17

high in an absolute sense.

32:20

So we've often globalized capital

32:22

and we've globalized goods, but

32:24

we haven't globalized labor. I

32:26

think we've historically thought of

32:28

the Internet has the worldwide

32:31

web. And we've known for a

32:33

long time that, you know, China has

32:35

carved out through the great firewall

32:37

of China. And I'm more Chinese part of

32:39

the net. But what we're now seeing

32:41

is Russia coming out a bit more of a

32:43

Russian internet. We're seeing fragmentation in a whole

32:45

variety of areas. And what about the globalization

32:48

of ideas? Isn't that what

32:50

we ultimately, I guess, at

32:52

the highest level care trading goods is really

32:54

important services, sure, important

32:56

Internet, sure, important. But

32:58

how freely or well would you say that

33:00

ideas are actually flowing around the world right

33:02

now? You definitely saw

33:04

a wonderful flow of ideas

33:07

and collaboration among scientists with

33:09

respect to the COVID-nineteen pandemic,

33:11

for example. And I think in many

33:14

ways, science is much more

33:16

globalized than many other

33:19

areas. But we also, I think,

33:21

have some real blind spots

33:23

and asymmetries that come with, you know,

33:25

where our best university is

33:27

located, what languages do most

33:29

people use? What media do they

33:31

read? All of those things still

33:33

give us a very very

33:35

strong asymmetry and

33:37

bias towards the west, towards

33:39

English speaking. And I think that one

33:41

of the things that we're gonna see with the

33:43

rise of Asia in particular

33:45

is more of a rebalancing on that. The

33:47

other thing I should say is that some of the dynamics

33:49

that we're seeing geopolitically play

33:51

out at the moment I think will have

33:53

quite a chilling effect on the global flow

33:55

of ideas. A lot of what you saw

33:57

in the United States with

33:59

the China initiative and that was trying to

34:02

target research collaborations between

34:04

Americans and Chinese institutions

34:06

or often targeting people of

34:08

Chinese nationality or ethnicity that were working in the United States. And these

34:11

were often people who'd been working in academia

34:13

in the US for years and

34:15

years. Yes? Yes. Absolutely. those

34:17

sorts of things, I think, end up having quite

34:19

a chilling effect, both on the

34:22

attraction of global talent, but also on

34:24

the kind of collaborations that you could

34:26

have. So I think we're going

34:28

to see more separation

34:30

of the technological ecosystems between China

34:32

and the West, and that will make

34:34

academic and scientific collaboration harder. And

34:37

Theo

34:38

Roberts has her views

34:40

of globalization, at least six

34:43

of them? After the break, what

34:46

happens when you ask economists to

34:48

adopt a different point of view? I

34:50

think where the economists struggled in

34:52

dealing with things which are value

34:54

questions that they just don't quite

34:56

know how to answer. I'm Steven Dubner,

34:58

and this is Freakonomics Radio. please

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36:52

Over

36:55

the years, on this show, we've had

36:57

conversations about globalization with

37:00

many economists, with

37:04

politicians, with officials from the World Bank and the World Trade

37:06

Organization, but never, at least as far

37:08

as I can recall, a legal scholar such as

37:10

yourself. So

37:12

how does your perspective as a legal

37:15

scholar differ and

37:17

perhaps improve upon for

37:20

our purposes, those more standard views.

37:22

Legal scholarship really trains

37:24

you in two different ways.

37:27

So the first is it teaches you to take the

37:29

role of an advocate. When you're a barrister

37:31

or a solicitor and you take a case, you

37:33

don't necessarily agree with a case, but you learn

37:35

to argument, make it understandable to other people who may not instinctively

37:37

like it or agree with it. But the other

37:39

thing you will to learn

37:41

is the role of mediation or the

37:44

judge, which is how do you take on board

37:46

arguments from different sides and

37:48

come to a sort of more synthesized

37:50

integrated conclusion that balances out and brings together those two different

37:52

perspectives. When we went through the

37:54

review process in this book, apparently, the

37:58

economists who presented, it said, an economist couldn't have

37:59

written this book because we're told,

38:01

like, to optimize something. And what

38:02

are we going to optimize? And

38:06

I think The very nature of a complex more pluralistic approach

38:08

is if you're trying to optimize

38:10

one thing, then inevitably

38:12

you're going to create gonna

38:14

be things that you're missing. How

38:16

much blame do you place on

38:18

economists or maybe the economics profession

38:21

for what turned out to

38:23

be pretty poor forecasting

38:26

for how economic globalization

38:28

and trade liberalization would work out.

38:30

I don't want to throw the economics profession under

38:32

the bus, but there was the sense that they

38:35

had given this idea

38:38

strong approval. I think economists did two different things. The

38:41

first is that they tended to

38:43

really simplify their case when they

38:45

talk to the public. So

38:47

if you'd asked economists in a

38:50

graduate seminar is free trade

38:52

good, they'd be like, well, good for who,

38:54

on what time frame, you know, all sorts

38:56

of qualifications. But whenever

38:58

you saw an economist speak

39:00

to the public speak

39:02

to newspapers, they really

39:05

simplified them message in a way that made it all

39:07

win win, which when there were

39:09

clearly communities that weren't winning, led

39:11

to the loss of

39:13

faith. I don't fault the economists for

39:16

making incorrect predictions on some of these

39:18

things. You know, prediction is

39:20

incredibly hard. what I've

39:22

felt is a kind of a

39:24

disciplinary arrogance. That

39:26

means that you're less likely to take on

39:28

board views from

39:30

different areas or different disciplines that don't

39:32

speak the same language as you. So there's

39:34

a lot of research, for example, that

39:36

says that many other social sciences are much more likely to cite

39:38

economics than economics is likely to cite

39:41

other social sciences. what we

39:43

really want to do is encourage all of our

39:46

disciplines to be more humble

39:48

and open that

39:50

they all offer insights into some things and can have

39:52

extraordinary blinders with respect to

39:54

others. I know you presented

39:56

your book to a

39:58

variety of constituencies and audiences, some

39:59

of them academic. Tell me about

40:02

presenting it to economists.

40:04

Yeah. We've

40:04

definitely got mixed responses

40:07

from economists. So some economists are a

40:09

bit like, well, these just, you

40:11

know, falsifiable claims

40:12

and we can just work out. Is this correct

40:14

or is this wrong? And, you know,

40:17

there are some narratives where there are going to be empirical

40:19

questions. To what extent are job

40:21

losses caused by trade and to

40:23

what extent are they caused by technology and what is the

40:26

interplay between those two? There is an

40:28

empirical answer to that. A

40:29

hard problem to solve. In credibly hot.

40:31

But there is an empirical answer. Yeah. And there techniques you can

40:32

try to get at. But I

40:34

think where the economists struggled the

40:38

most was in dealing with things which are sort of value

40:40

questions that they just don't quite

40:42

know how to answer. Many of

40:46

the different narratives are valuing something else

40:48

that's just not commensurable

40:50

with efficiency. One critic

40:53

of economists over

40:55

the years has been that they know the price of

40:57

everything and the value of nothing, which

40:59

is, you know, a pretty harsh

41:02

indictment if you're trying to acknowledge

41:04

that value and price are not the same

41:06

thing, but do you feel

41:08

that a lot of economists

41:11

these days, especially younger kind

41:13

of are opening their

41:15

views to finding value

41:17

in things which are not

41:19

so easily priced. So I think you've

41:21

seen real shifts in the economic profession about thinking

41:24

about inequality, both across

41:26

classes and across regions. I

41:29

think you're also seeing a new generation of economists

41:31

that are thinking much more

41:33

about climate change and how to value the environment

41:35

and what we can do to sort of

41:37

reorient our economies towards clean

41:40

energy. Kate Raul is famous for doing

41:42

the doughnut economics approach. And one

41:44

of the things she said is

41:46

that we've typically take an approach of

41:48

maximizing economic efficiency and

41:51

maximizing gross domestic product.

41:53

And that this has put us on a collision

41:56

course with our planet because it's meant

41:58

we've really destroyed

41:59

our environment. Here

42:01

is the economist Kate Rayworth

42:03

from a twenty twenty interview

42:05

on this show. So the

42:07

standard economics

42:07

I learned was

42:10

not based on a

42:12

delicately balanced living planet. There wasn't really

42:14

a planet. Anything natural

42:16

was called an environmental externality.

42:18

And

42:19

here's Rayworth explaining what she calls donut economics, which is

42:21

the title of a book she

42:23

published in twenty seventeen.

42:26

So

42:26

imagine a donut, the kind that's got a hole in the middle. And we

42:28

want everybody to be living in the donut. That

42:30

means no one is in the hole in the middle where

42:33

they're falling short on the centers of

42:36

life. without food or water, healthcare,

42:38

housing, education, political voice.

42:40

But at the same time,

42:42

don't overshoot the outer crust

42:45

of the doughnut. we put so much pressure on our planet. We

42:47

begin to push her out of balance and we cause climate

42:50

breakdown. And we acidify the oceans

42:52

and create a hole in the ozone

42:54

layer. So it's a

42:56

balance.

42:56

Meet the needable people

42:58

within the means of the

43:00

planet.

43:01

And fear

43:04

Roberts again, And that's the

43:06

basis of doughnut economics,

43:08

which really seeks to take

43:10

economics and put it towards a different

43:12

set of goals. but also to recognize some

43:14

more fundamental constraints on our economic

43:17

models. One critique I've read of your

43:19

book is by The Economist Jason Furman,

43:21

former head of a CEA, the Council

43:23

of Economic Advisors in the Obama White

43:26

House. Here's a quick quote, the left wing

43:28

narrative, one of several that

43:30

you described. that trade helps the rich at the expense of the

43:32

poor was stronger on

43:34

facts about increasing inequality

43:36

than it was on analysis

43:38

linking this in any

43:40

qualitatively important way to

43:42

trade. Yeah. Look, I think that's actually

43:44

accurate about where the left wing populace

43:46

are. So I think the left

43:48

wing populace are much more

43:50

concerned about class inequality.

43:52

And they tended to sort of have a hostility

43:54

to things like international trade deals.

43:56

but they themselves didn't fully explore the

43:58

link between those. I

43:59

think what Jason's saying is

44:02

correct, but I

44:04

think it's correct about the left wing populist narrative that

44:06

they sort of make an

44:08

assumption that this is partly to do with trade, but

44:10

they don't really fill

44:12

that out. Here's one more from that found

44:14

interesting. Some of the zero, some

44:16

perspectives in the different

44:18

faces he writes

44:20

about your six faces of

44:22

globalization are clearly based

44:24

on fallacies and misconnections that

44:26

should be dispelled and not sympathized

44:29

with. In other words, don't

44:32

give narratives that I,

44:34

Jason Fuhrman, think, are

44:36

illegitimate, an equal hearing.

44:38

Whereas you go out of your way to say one of

44:40

the best ways to analyze the world, or in this case, economic

44:42

globalization, is to put yourself

44:44

in the position of those who have grievances

44:48

so is that just an irreconcilable difference between

44:50

your mission here and his reading

44:52

of it? Is this just an economist, being

44:56

an economist? Look, people

44:58

can have very different approaches to this

45:00

issue. We don't say that you, as

45:02

an individual, shouldn't ultimately end

45:05

up coming to judgments about what you agree with

45:07

and what you disagree with. What we say is

45:09

that the first thing you should do is

45:11

try to understand things

45:13

that may not initially seem right to you. Well,

45:15

there are elements that you may understand and there

45:17

are elements that you may dislike and I think

45:19

that it's okay to draw

45:22

those lines. But I wouldn't draw them too quickly because I think

45:24

when you draw them too quickly, you often don't

45:26

understand in the first place. And so I think

45:28

where economists,

45:30

for example, were very,

45:32

very quick to draw the line

45:34

quickly was about the relationship between

45:36

China and the United States as

45:38

they look, They both gained in absolute terms from economic

45:40

globalization. We know that we get more

45:42

from cooperation, from an

45:44

economic welfare absolute

45:46

gain perspective.

45:48

you as the technological leader should collaborate with the technological

45:50

up and comer. But ultimately, for

45:52

a country like the United States, your

45:56

national interest is about reconciling and balancing

45:58

those absolute economic

46:00

welfare gains against security

46:04

positional loss. And what we're

46:06

starting to see in US policy whether

46:08

you agree with it or not is sort of a

46:10

changing perception of the

46:12

balance between those two

46:14

things. It matters who builds our

46:16

five g. It matters who has access to all

46:18

of our data. And those are

46:20

not questions just of

46:22

comparative advantage.

46:23

I love the

46:26

way that you think about and

46:28

explain these concepts, both the economic

46:30

components of globalization

46:32

and the political components of it. Now, you

46:34

happen to be a legal scholar and I

46:36

think there's certainly some connection

46:38

between your background

46:40

and your ability to not just explain globalization

46:42

this way, but to think

46:44

about it, which makes me think that, you

46:46

know, maybe there's something inherent

46:48

in legal

46:50

thinking, legal training that provides that benefit.

46:52

On the other hand,

46:54

many of our politicians in

46:56

the US at least are lawyers.

47:00

And they don't seem particularly good at all, at seeing

47:02

and balancing all these different perspectives. So

47:04

if you could have a heart to

47:07

heart, with your legal fraternity

47:10

with your colleagues in US

47:12

government. What would be

47:14

one thing that you might say

47:16

that could somehow dodge the heavy, heavy,

47:18

heavy artillery of the

47:20

partisan language that we all participate

47:22

in now.

47:24

to encourage them to think a little bit more

47:26

about these global issues

47:28

from a slightly more

47:32

sophisticated perspective. I would

47:34

say consciously

47:36

try to put yourself in multiple

47:40

different positions. consciously

47:42

try to think what would the world

47:44

look like if I was a manufacturing

47:46

worker in one of these towns?

47:48

What would the world look like if I was sitting in Beijing

47:50

and had the experience of the century

47:52

of humiliation, and I was now looking at

47:55

these American approaches.

47:56

What would

47:57

the world look like if I was

47:59

sitting in Russia and I'd gone through

48:01

the terrible nineties of

48:04

the loss and income and the security

48:06

challenges, and really empathetically

48:08

try to situate yourself in multiple

48:12

different perspectives. It's

48:13

something I would say you

48:16

can apply at many different scales

48:18

in your life, so I think it applies in

48:20

your interpersonal

48:22

relationship. So when you think about something in your role as a couple, what

48:24

does it look like from my perspective and what does

48:26

it look like from my partner's experience

48:28

and from

48:30

their perspective? I think you see it with Republicans and Democrats.

48:32

You see it with US and China. You

48:34

see it across many different things.

48:36

Everything from your

48:38

interpersonal relationships to your

48:40

geopolitical relationships. I

48:40

love it. I came for the geopolitics

48:43

and I stayed for the marriage counseling.

48:45

Thank you very much. It was

48:48

a pleasure to

48:51

join you. Thanks

48:53

to Anthea Roberts for today's conversation.

48:56

Her book is titled six

48:58

faces of Globalization

49:00

Who wins who loses,

49:02

and why it matters. Her coauthor is

49:04

Nicholas Lamb. I would love to

49:06

hear what you thought of

49:08

Roberts' arguments. We are at

49:10

radio at freakonomix dot com coming up next

49:12

time on the show. This is the

49:14

biggest change to hit labor markets in

49:16

many decades three

49:18

years since the pandemic started.

49:20

The work from home revolution

49:22

is still a thing. So

49:25

how's it going? Flexible

49:26

work is a double edged sword. One thing that

49:28

we're concerned about is this possibility

49:30

of an urban doom loop,

49:32

an urban doom loop, I

49:35

just figured I can't be the

49:37

only one having these

49:40

struggles.

49:40

The winners, losers, and

49:44

unintended consequences of working from home. That's next time on the

49:46

show. Until then, take care of

49:48

yourself. And if you can, someone

49:50

else too.

49:53

Freakonomics Radio is produced

49:55

by Stitcher and Renbud Radio. You can

49:57

find our entire archive on

49:59

any podcast app and we can be

50:01

reached at radio at reeconomics dot com.

50:03

This episode was produced by Zach Lipinski. Our

50:06

staff also includes Neil Karuth, Gabriel

50:08

Roth, Greg Ripon, Ryan Kelly, Rebecca

50:10

Lee Douglas,

50:12

Julie Canfor, Morgan Levy, Catherine Moncure, Jasmine

50:14

Klinger, Eleanor Osborn, Jeremy Johnston,

50:16

Daria Klenert, and Matherell, Learick

50:19

Boudic, and Elena Coleman. Our

50:21

theme song is mister Fortune by the hitchhikers.

50:24

All the other music was composed by Louis

50:26

Guerra. If you'd like to read

50:28

a transcript, or the show notes,

50:30

or take a look at the underlying

50:32

research of any of our episodes. That is

50:34

all at freakonomics dot com, where

50:36

you can also sign up for or newsletter

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and leave comments. As

50:40

always, thanks

50:42

for listening.

50:46

Well, yeah, I jump around a lot

50:48

and I'm just gonna apologize

50:50

in advance. The

50:54

Freakonomics Radio Network, the hidden

50:57

side of everything.

50:58

in a

51:01

Stitcher.

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