Thomas Palley

Vladimir Ilyich Ulyanov, alias Lenin, was the leader of the 1917 Bolshevik revolution in Russia. One of his best known quotes is “The capitalists will sell us the rope with which we will hang them.” Today, Lenin must be chuckling in his Moscow mausoleum as he watches US business dealings with China. (more…)

“Lock-in” is a concept developed by economic historians to describe how economies get tied in to using inefficient technologies. It also applies to institutions as economies and societies can get locked into sub-optimal institutional arrangements. This has relevance for globalization where the arrangements governing trade and the global economy may be sub-optimal, posing problems of how to change them. The economics of lock-in helps understand the problem and suggests how to solve it. (more…)

The International Monetary Fund (IMF) has been the focus of extended debate and criticism, yet reform has been hard to come by. Now, owing to changes in the global economy, the issue of reform has forced itself onto the official agenda. The Fund’s management has responded with its own reform proposals, but they are too narrow. Instead, the IMF should be pressured to adopt bolder reform that incorporates missing social concerns into its mission. (more…)

Over the past several years, much attention has focused on the role of China’s trade surplus in creating today’s global financial imbalances. With so much attention devoted to China, little attention has been paid to the role of Japan’s policy of near-zero interest rates that has also contributed to these imbalances. With global financial uncertainty rising, it is time for Japan to decisively abandon this policy. (more…)

Over the last three years there has been an explosion of public concern about the wage and employment impacts of global outsourcing. As a result, worries about globalization have begun to move up the income ladder, infecting white-collar middle-class workers. For instance, a poll conducted in May 2004 for the Associated Press reported that sixty-nine percent of Americans believe outsourcing hurts the economy. Recognizing the potential threat this shift of public opinion poses to corporate globalization, business groups have been busy playing a game of catch-up seeking to allay these new more broadly shared public fears. (more…)

This October Brazilians will go to the polls in an election that constitutes a referendum on the presidency of Lula da Silva. As the candidate of the Workers Party, or Partido dos Trabalhadores (PT), Lula was elected in 2002 on a platform of progressive social democracy. Yet over the last four years, his macroeconomic policies have been marked by extreme caution and capitulation to the pressures of globalization. Consequently, Brazil has missed a golden opportunity provided by a robust global economy to chart a new and vibrant economic trajectory. (more…)

The U.S. dollar is much in the news these days and there is a sense that the world economy may have become excessively reliant on the dollar. This reliance smacks of dysfunctional co-dependence whereby the U.S. and the rest of the world both rely on the dollar’s strength, but neither is well served by it. (more…)

The Doha round of trade liberalization negotiations is in deep trouble, and with good reason. Though positioned as a “development” round intended to benefit the world’s poorest countries, it in fact does little in that regard. On close examination Doha turns out to be a Trojan horse that pushes the type of trade liberalization that has made globalization so deeply unpopular and unfair. (more…)

Around the world there are growing rumbles about globalization, and these rumbles are not confined to activist anti-globalization movements. In East Asia, the financial crisis of 1997 left a jaundiced sense of globalization, though robust economic recovery has tempered that. Globalization’s standing has also been badly damaged in Latin America by the meltdown of the Argentine economy in 2000 and successive financial crises in Brazil in 1999 and 2001. In Europe, new fear about globalization is surfacing in a range of countries. In Poland it has taken the form of concern about foreign capital taking over the Polish banking system, and foreign takeover fears also permeate France and Italy. In France and Germany, working people link globalization with pressures to dismantle the social democratic state. (more…)