What’s Wrong With Our System Of Global Trade And Finance

Rodrik: My starting point is the view that if you have well functioning markets, you need to embed them in institutions of governance. Markets aren’t just created on their own. You need to stabilize markets and legitimatize markets, and the wonderful thing about capitalism over its long history is that we have learned how to do that for national markets. We have national political systems that provide stabilization, regulation, and legitimation.

Now what happens when your markets are global? Who is going to provide these supporting institutions? You can’t really have fully integrated international markets without all fully integrated political systems. You can’t have an imbalance between the scope of markets and the scope of political accountability and political institutions. But we end up relying on global agreements and global commissions that essentially become technocratic arrangements with no political or social content to them.