Rebel with a Cause

Author:Prakash Loungani
 
FREE EXCERPT

Rebel with a Cause Finance & Development, June 2016, Vol. 53, No. 2

Prakash Loungani profiles Dani Rodrik, the Harvard professor whose warnings about the downsides of globalization proved prescient

The triumph of markets over the state appeared almost complete in the early 1990s. The collapse of the Soviet Union and the fall of the Berlin Wall had discredited the role of the state in commanding the economic and political life of citizens. The political scientist Frank Fukuyama proclaimed in 1992 that the spread of democracy and capitalism around the globe would henceforth make history somewhat “boring.” Among economists, markets—already held in fairly high regard—gained further esteem. Prominent left-leaning economists like Larry Summers admitted to a “grudging admiration” for such champions of the global spread of free markets as Milton Friedman.

But Harvard economist Dani Rodrik refused to join the party. Instead, he warned that globalization—the process of economic integration of nations through trade and finance—may have gone too far. In a 1997 monograph, he said there was a “yawning gap” between the rosy view of globalization held by economists and “the gut instincts of many laypeople” to resist it. In the United States, he noted, “a prominent Republican,” Pat Buchanan, had just run “a vigorous campaign for the presidency on a plank of economic nationalism, promising to erect trade barriers and tougher restrictions on immigration” (themes pushed two decades later by Republican Donald Trump in his campaign for the 2016 presidential nomination).

Rodrik’s warnings that the benefits of free trade were more apparent to economists than to others were prescient. His skepticism about the benefits of unfettered flows of capital across national boundaries is now conventional wisdom. His successful attack on the so-called Washington Consensus of policies to generate economic growth has made governments and international organizations like the IMF and the World Bank admit that there are many policy recipes that can generate growth. That the phrase “one size does not fit all” has become a cliché is due in no small part to the influence of Rodrik’s work. “We didn’t understand how right he was,” says David Wessel, a former Wall Street Journal economics writer now at the Brookings Institution’s Hutchins Center.

Inside the ivy towerRodrik has spent most of his professional life at Ivy League institutions. He has a bachelor’s degree from Harvard and master’s and PhD degrees from Princeton, followed by a teaching career at Harvard and Columbia.

He was able to go from his native Turkey to Harvard because of his father’s success as a businessman. Like many countries in the 1970s, Turkey followed a policy of import substitution—imposing tariffs to keep out imports and substitute domestic products. Protected by these tariffs, his father’s ballpoint pen company was successful enough that Rodrik could contemplate studying in the United States. “I am the product of import substitution,” Rodrik has said.

On his application to Harvard, he wrote that he wished to major in electrical engineering, unaware that the school then did not offer it as a major. Nevertheless, he has since written, he was admitted because one member of the admissions committee “somehow saw a flicker of hope” in his application and pushed his case “over the strenuous objections of others on the committee.”

Shortly after arriving at Harvard in 1975, he decided to major in political science—and take a minor in economics due to his “father’s prodding.” His father, he says, “still had hopes that I would go to business school and do something useful in life.” In his senior year at Harvard, still “confused about his career goals,” he applied to six different graduate programs—some in economics and business, others in political science and international relations. He chose a master’s in public policy at the Woodrow Wilson School at Princeton and “had a great time,” but realized that he had “simply put off the decision” of whether to pursue a career in economics or political science.

He remembers “well what settled it.” One day in the library he picked up copies of the flagship...

To continue reading

REQUEST YOUR TRIAL