Contrary to the predictions of abstract economic theories, liberalized global trade in practice does not "lift all boats." In reality, international competition for exports and investment can lead to zero-sum or beggar-thy-neighbour consequences, producing losers as well as winners. These effects damage economic performance (for particular countries, and potentially for the global economic system as a whole) and create political hurdles to international integration and cooperation. This lecture will explore the economic rationale for beggar-thy-neighbour trade strategies, and will consider the sorts of governance mechanisms that would be necessary to regulate this dimension of international competition, so that the economic promise of efficiency-enhancing trade might be experienced more genuinely by all parties.
Jim Stanford is an economist and director of the Centre for Future Work, based at the Australia Institute. The Australia Institute is Australia’s most influential progressive think tank. The Centre for Future Work focuses on issues of work, labour markets, income, economic development, technology, inequality, skills and more.