A woman does laundry on the ground near demolished residential buildings

Comments 13

贸易会促进不平等吗？

Jan 2, 2018 Jeffrey Frankel

发自剑桥——不平等状况已经成为了发达经济体的主要政治焦点，而且有着充分的理由。在美国，根据最近发布的《2018年世界不平等状况报告》，最顶层那1％的人口占国民收入的份额从1980年的11％上升到了2014年的20％，而位于社会收入层级底部那50%的人口只得到了总收入的13%。该状况在法国，德国和英国等其他主要国家虽然不太明显，但其性质也极为类似。

为了解释发端于1980年代并从世纪之交以来不断加速的不平等状况，许多人都指出这是因为自1980年以来类似贸易相对GDP比率这类全球化指标有所上升。但这种相关性是否就意味着贸易与不平等之间存在因果关系？

我们显然有诸多理由怀疑去怀疑这一点。全球的贸易相对GDP比率在经历了35年的攀升之后于2008年达到61%的峰值，随后在2016年回落到56％——这也正是对全球化的恐慌上升为政治狂热之时。

To continue reading, please log in or enter your email address.

Registration is quick and easy and requires only your email address. If you already have an account with us, please log in. Or subscribe now for unlimited access.

Featured

What’s Been Stopping the Left?

Apr 10, 2018 Dani Rodrik
Political Machismo

Apr 10, 2018 Ian Buruma
Will China Really Supplant US Economic Hegemony?

Apr 2, 2018 Kenneth Rogoff
Should Tech Companies Be More Tightly Regulated?

Mar 30, 2018 Simon Johnson
Liberal World Order, R.I.P.

Mar 21, 2018 Richard N. Haass

Jeffrey Frankel

Writing for PS since 2000
138 Commentaries

Jeffrey Frankel, a professor at Harvard University's Kennedy School of Government, previously served as a member of President Bill Clinton’s Council of Economic Advisers. He is a research associate at the US National Bureau of Economic Research, where he is a member of the Business Cycle Dating Committee, the official US arbiter of recession and recovery.

0 Comments on this paragraph, 13 in all 13 Comments on this article

David O'Rear Jan 22, 2018

The first thing that strikes me is that the target, inequality, is not poverty. Trade reduces poverty. If some get richer than others, inequality increases. But, at the same time, poverty decreases and that is the entire objective.

The second thing that strikes me is that I cannot think of a single (non-oiler) example of a country relatively closed to trade that is more prosperous or more stable than neighbors who are relatively open.
Alex Aslanidis Jan 9, 2018

Yes, uncontrolled trade (i.e. free trade and capital flows, and the ensuing big surpluses and deficits they create) causes inequality because the deficit countries accumulate foreign debt which tends to create bubbles in their economies, not to mention that it exposes them to sudden-stop dangers. Thus until a system that allows for symmetrical growth is adopted, globalization must be demolished.
nigel southway Jan 8, 2018

I guess you cannot ask an economist to bad mouth free trade..."Inequality is clearly a serious problem that merits political attention. But focusing on trade is not the way to resolve it."..... too holy a subject for them to even talk about eh? ...... when is that profession going to stop using idealogy and start using facts... the very bad news is that its not about inequality, its about prosperity and wealth transfer... Say what you like but Trumps view is a valid one.... trade if to exist must be balanced. the main culprit below the surface is the free flow of capital..... not just trade.
James Haughton Jan 8, 2018

Did the author read the article before writing the conclusion? Just about everything he says leads to the conclusion "yes, globalisation does raise economic inequality within countries".
Per Kjeldaas Jan 7, 2018

Is there any connection between inequality and the increased power and influence of central banks?
- Steve Hurst Jan 7, 2018
  
  Per, CBs appear to be doing what they can within their legal limitations to ameliorate the lack of action by governments (who appear to be in the thrall of banks)
Barry Rosenfeld Jan 6, 2018

I find the confusion, or just lack of distinction, between absolute and relative changes in Frankel's article a bit surprising. "Zero sum" is not the issue.

Suppose trade between two countries raises their aggregate GDP by one percentage point per year. However, if the gains from trade are not equally shared, e.g., one country gets 2/3 of the growth and the other 1/3, the relative economic position changes dramatically over time although both gain from trade.

If the country gaining 2/3 is China and the one gaining 1/3 is the US, it seems that the RELATIVE position of the US will erode over time compared to China. In this scenario, the better policy would be for the US to terminate trade with China. Absolute gains from trade is not the issue.
j. von Hettlingen Jan 3, 2018

Although rising inequality since the 1980s is clearly a major political concern that has to be dealt with, Jeffrey Frankel says putting the blame on trade is not the way to resolve it. He sees the "correlation" between trade and inequality as not evident, because the global trade-to-GDP ratio had fallen by 5% from 61% in 2008 to 56% by 2016.
No doubt trade has played a powerful role in creating jobs and contributing to rising incomes both in developed and developing countries. While inequality had risen within each country, inequality between countries had decreased, because many emerging economies had improved their per capita incomes, thanks to "urbanization, high savings rates, and improved access to education." So far trade had been the main engine of growth, especially in Aisa, that helped catch up with the advanced economies.
Trump and his supporters believe "Asia’s success has come at America’s expense." As he loves zero-sum game, he had vowed to adhere to his "America First" campaign pledge. That they believe free trade had not improved their livelihoods, has less to do with the effects of globalisation on advanced economies, but more with domestic policies, which had led to rising inequality between the educated and the unskilled in the laour market.
Many unemployed in the UK and the US are angry despite the fact that free trade has been one of the most powerful drivers of growth and prosperity. They feel left behind in the face of a widening income gap. Instead of understanding the change that technology has brought and the weakening of institutions that used to represent the interests of bluecollar workers, they put the blame on globalisation and the elites.
According to a 2016 World Bank report - some "20% of jobs lost in advanced economies could be linked to trade, with the rest down to automation and the need for new skills." In this regard Europe plays a vanguard role: Many European governments offer robust social security programmes and sometimes shoulder "adjustment costs" that help people who have lost their jobs to acquire new skills.
The US is wary of spending adjustment costs on employees in sectors exposed to import competition from the developing world. Often authorities opt for protectionist policy as a myopic solution - proposing quotas and trade barriers. Adjustment costs can be high, but they constitute only a short-term pain. The long-term benefit is more resounding - to have a skilled work force, which is resilient to global competition.
According to the World Bank: "Given overall efficiency gains, the dislocation effects of trade in advanced economies must be addressed through stronger safety nets and enhanced skills and flexible labour markets." Trade is essential to every country's economy. In our world of interdependence, if the advanced economies, led by the US closed their borders, it would also be difficult for their economy to sustain, because they need to export their high-end goods, and import primary products for manufacturing. Nobody will benefit if the global economic growth stalls.
jagjeet sinha Jan 3, 2018

PROFESSORS MUST DISTILL THE TRUTH
The Marginalized Majority have Democracy to voice their opinion.
From Modi to Macron - Brexit and Trump - all threw out The Establishment.
However, few Professors have portrayed that Globalization is not the cause.
The Inequality and Marginalization within Democracy - requires remedies.
In the absence of correct diagnostics, populist demagoguery blames Globalization.
The Central Bank Governor is unable to remedy - and ZIRP is his answer.
Fiscal Redesign has the remedies - if the diagnostics are correct.
More Europeanization - like harder Brexit - is ClubMed at its worst.
More Globalization was the answer at the First Brexit 500 years ago.
More Globalization is the answer again and again in history.
Should Globalization result in accentuating Inequality within, Democracy comes in.
Democracy can find the answers in fiscal redesign - that ends Inequality.
Without hurting Globalization - harnessing Globalization can in fact end Inequality.
Kudos to Jeffery Frankel - for speaking out for Globalization.
Rick Puglisi Jan 2, 2018

Trade plays a huge role if you understand Kalecki's profit equation and where profits come from. Every dollar of a trade deficit reduces US profits by one dollar. The US compensates with debt growth to replace these lost profits. The trade surplus countries get an extra dollar in profits. So heads (surplus) you win, tails (deficit) you don't lose (b/c debt growth compensates). Add it up globally and the rich get extra profits which increases their wealth and income while the poor must compete against themselves for a limited supply. We are running a global coordinated ponzi scheme.
ferdinand van Dieten Jan 2, 2018

Unfortunately Mr. Frankel forgets the Ceteris Paribus clause - as most economist do all the time. I agree that the quantity of trade is unlikely to be the cause of inequality, but the quality of trade (of the markets) has changed in the meanwhile. Maybe the most relevant change has been the advance of monopolisation and concentration of market-power, helped by the ideology that deregulation makes the market better functioning (quod non). In that case this article simply misses the point we have to analyse.
Kevin Remillard Jan 2, 2018

I ran some numbers using Future Values of Periodic Payments and the government's social security retirement estimates site.

The U.S Bureau of the Census has the annual real median personal income at $31,099 in 2016 ($2,583 a month or $15 an hour). 15% of that is $387 in payroll tax monthly (employer and employee).

Invested in the S&P 500 Index historically, @10% (-2.7% inflation), you arrive at 65 with $1,233,417.

That we could have a $20,000 a year employee to have $796,781.26, under same circumstance, is even more shocking.

Our Tax Code is capable of reducing taxable income to 18% for investors and Social Security may provide $15,849 at age 65 (in 45 years) for taxpayers making $20,000 a year using the same inflation assumptions.

In 45 years "If you start collecting your benefits at age 65 you could receive approximately $15,849 per year or $1,321 per month. This is 79.2% of your final year's income of $20,000. This is only an estimate. Actual benefits depend on work history and the complete compensation rules used by Social Security."

That we could have a $20,000 a year employee to have $796,781 at age 65, Invested in the S&P 500 Index historically @10% (-2.7% inflation), against a $1,321 monthly uncertain annuity if you live.
Steve Hurst Jan 2, 2018

'...trade would normally benefit both partners, by enabling each to take advantage of their comparative advantages.' Indeed, but what happens when the same goods are being traded, it descends into labour arbitrage, and that is exactly what has happened with FDI and corporation owned technology transfer to developing economies, to the benefit of corporations. Looking at the numbers as a global figure is meaningless. When 500K of Wildebeest cross the Mara river there are fatalities, for the herd overall it does not matter - for the fatalities it does. Voters fear becoming a fatality and will take steps accordingly. With regard to tax distribution - there is probably a problem on the horizon as the pyramid of income /employment structure erodes and the middle class numerically reduces inducing a higher demand for redistribution. A redistribution requires additional tax for many who will oppose it. The middle class are key players - normally well educated, professional, and know how the game works and which strings to pull, and pull them they will. Trump may be losing popularity but there is a significant hard core of voters who will support him even if all he is a tweetstorm. The fact they are highly unlikely to go away is a major signal of social stress. Tax redistribution does not resolve either demographics or productivity

I still think Greenspan put it well -
http://uk.businessinsider.com/alan-greenspan-productivity-brexit-trump-2017-2

http://prosyn.org/JOACiy2/zh;

Log in/Register

贸易会促进不平等吗？

To continue reading, please log in or enter your email address.

Featured

What’s Been Stopping the Left?

Political Machismo

Will China Really Supplant US Economic Hegemony?

Should Tech Companies Be More Tightly Regulated?

Liberal World Order, R.I.P.

New Comment

Email this piece to a friend

Contact us

Handpicked to read next

The Complexity of Inequality

A Tale of Two Realities

Who Cares About Big Tech’s Displaced Workers?

Germany’s Populist Temptation

The West’s Crisis of Confidence

No Blank Check for Development Banks

Missile Strikes Are Not a Syria Strategy

The “Next Eleven” and the World Economy

Should We Really Care About Inequality?