The Open Economy and Its Enemies

Jagdish Bhagwati

Is free trade passé? Is global taxation of banks and financial transactions viable? Has economic globalization improved the lives of the world’s poorest people? Is the current international architecture governing world trade and finance sufficient? Does immigration help or hurt rich country economies?

Globalization and economic liberalization in rich and poor economies alike has been convicted of causing every problem – from the housing bubble in the United States to sovereign-debt crises in Latin America and Europe and insolvent banks everywhere. As a result, the economic opening of the past two decades has fallen into disrepute, while suspicion of financial markets and interest in mercantilist policies and re-regulation of capital flows has flourished.

But are the critics of economic openness right? Would reversing three decades of economic policy really deliver greater stability while ensuring continued innovation and dynamism?

Jagdish Bhagwati believes that defending the open economy is the defining issue of our time. Bhagwati, Professor of Law and Economics at Columbia University and Senior Fellow at the Council on Foreign Relations, is one of the world’s leading experts on international trade, serving in top-level advisory positions for the World Trade Organization and the United Nations. Moreover, in his pioneering academic research and his practical pursuits, Jagdish Bhagwati is devoted to showing how open economies accelerate human development and strengthen respect for human rights.

Every month in The Open Economy and Its Enemies, written exclusively forProject Syndicate, Jagdish Bhagwati examines the real-world consequences of arcane economic-policy debates and the abstract ideas that underlie them. As Bhagwati shows, the stakes – for rich and poor countries alike – could not be higher.