Most say globalisation and free trade is fine - just as long as it seems fair

While globalisation occasionally raises difficult questions about the legitimacy of its redistributive effects, we should not respond automatically by restricting trade.

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I was recently invited by two Harvard colleagues to make a guest appearance in their course on globalisation.

"I have to tell you," one of them warned me beforehand, "this is a pretty pro-globalisation crowd." In the very first meeting, he had asked the students how many of them preferred free trade to import restrictions; the response was more than 90 per cent. And this was before the students had been instructed in the wonders of comparative advantage.

We know that when the same question is asked in real surveys with representative samples - not just Harvard students - the outcome is quite different. In the US, respondents favour trade restrictions by a two-to-one margin. But the Harvard students' view was not entirely surprising. Highly skilled and better-educated respondents tend to be considerably more pro-free trade than blue-collar workers. Perhaps the Harvard students were simply voting with their own (future) wallets in mind.

Or maybe they did not understand how trade really works. After all, when I met them, I posed the same question in a different guise, emphasising the likely distributional effects of trade. This time, the free-trade consensus evaporated - even more rapidly than I had anticipated.

I began the class by asking students whether they would approve of my carrying out a particular magic experiment. I picked two volunteers, Nicholas and John, and told them I was capable of making US$200 (Dh734.60) disappear from Nicholas' bank account - poof! - while adding $300 to John's. This feat of social engineering would leave the class as a whole better off by $100. Would they allow me to carry out this magic trick?

Those who voted affirmatively were only a tiny minority. Many were uncertain. Even more opposed the change.

Clearly the students were uncomfortable about condoning a significant redistribution of income, even if the economic pie grew as a result. How is it possible, I asked, that almost all of them had instinctively favoured free trade, which entails a similar - most likely greater - redistribution from losers to winners? They appeared taken aback.

Let's assume, I said next, that Nicholas and John own two small firms that compete with each other. Suppose that John got richer by $300 because he worked harder, saved and invested more, and created better products, driving Nicholas out of business and causing him a loss of $200. How many of the students now approved of the change? This time a vast majority did - in fact, everyone except Nicholas approved.

I posed other hypotheticals, now directly related to international trade. Suppose John had driven Nicholas out of business by importing higher-quality inputs from Germany? By outsourcing to China, where labour rights are not well protected? By hiring child workers in Indonesia? Support for the proposed change dropped with each one of these alternatives.

But what about technological innovation, which, like trade, often leaves some people worse off. Here, few students would condone blocking technological progress. Banning the light bulb because candle makers would lose their jobs strikes almost everyone as a silly idea.

So the students were not necessarily against redistribution. They were against certain kinds of redistribution. Like most of us, they care about procedural fairness.

While globalisation occasionally raises difficult questions about the legitimacy of its redistributive effects, we should not respond automatically by restricting trade. There are many difficult trade-offs to consider, including the consequences for others around the world who may be made significantly poorer than those hurt at home.

But democracies owe themselves a proper debate so they make such choices consciously and deliberately. Fetishising globalisation simply because it expands the economic pie is the surest way to de-legitimise it in the long run.

Dani Rodrik, a professor of international political economy at Harvard University, is the author of The Globalisation Paradox: Democracy and the Future of the World Economy

* Project Syndicate