Freakonomics Radio - 519. Has Globalization Failed?

Episode Date: October 20, 2022

It was supposed to boost prosperity and democracy at the same time. What really happened? According to the legal scholar Anthea Roberts, it depends which story you believe.

So one big promise of globalization was that countries, as they became more integrated in the global economy, would also modernize on a political dimension. Some people argued that economic globalization was going to be the U.S.'s best ever effort at spreading democracy. I'm curious how successful or unsuccessful you think that's been. One of the things that I think has clearly come out from both Russia and China is that that has not borne fruit in quite the way the United States may have hoped. But part of it may also be that the US may be retelling that story a little bit. It may have been that they wanted to say that it was about democracy, but actually a lot

of it was also just about their own economic interests. And now their understanding of their economic interests have changed. What kind of stories do we tell ourselves about economic globalization, about how countries interact and compete with each other? That is a question Anthea Roberts has spent years thinking about. She is a lawyer by training and now a professor at the Australian National University. She is also the co-author with Nicholas Lamp of a book called Six Faces of Globalization, Who Wins, Who Loses, and Why It Matters. Their main point is simple, but also profound. We all tell stories about our economic lives. We as individuals and countries too,

but we don't all tell the same story. Maybe you prefer the story about how a rising tide lifts all boats, or the story about how China is stealing America's jobs, or maybe the one about how our planet is on an unsustainable trajectory and that GDP is a terrible measure of prosperity. Most of us, when we subscribe to one of these stories, we tend to discount or ignore the others. Yours surely is the right story. The others must be wrong. But in the words of F. Scott Fitzgerald,

the test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. Anthea Roberts is able to hold six opposing ideas in mind. And today on Freakonomics Radio, we unpack all these stories in order to answer a big question. Has economic globalization been a failure? Think about the U.S.-China relationship. There have been upsides. And so that has lifted hundreds of millions of people out of poverty.

It's really increased consumption. And it's made our lives much more diverse, everything from food to electronics. But I think at the same stage, if you look on other metrics, it's had some really damaging effects. We have seen left-behind communities that have created much more of a backlash. We've also seen increase in suicide, increase in drug addiction. We are seeing those communities really falling apart. A recent global survey by Ipsos found that only 48% of respondents said that globalization is a good thing for their country. And that number has fallen sharply in the past few years. So what's the best way forward?

I tend to be a little bit less convinced that I know exactly what the right answer is. Will that stop us from asking the question? No chance. This is Freakonomics Radio, the podcast that explores the hidden side of everything, with your host, Stephen Dubner. Over the years on this show, we have come at the topic of globalization from many angles. We would conservatively estimate that more than a million manufacturing jobs in the U.S. were directly eliminated between 2000 and 2007 as a result of China's accelerating trade penetration in the United States. That is the American economist David Otter

from a 2017 episode. The accelerating trade penetration was a result of China joining the World Trade Organization in 2001. Otter's analysis focused on U.S. labor outcomes. Some people are leaving the labor market. Some people are going into unemployment. Some people are going on disability.

And so the reallocation process seems to be slow, frictional, and scarring. Slow, frictional, and scarring. Slow, frictional, and scarring. That is not what most economists told us would happen. More global trade was supposed to mean more growth, even at home, as manufacturing jobs were offshored. Yes, some American jobs would be lost, but those workers were supposed to be retrained and reallocated, as Otter puts it, into better jobs. In her book, Six Faces of Globalization,

this is what Anthea Roberts calls the establishment narrative, the first of the six stories we tell ourselves. That's the idea that economic globalization is a win for everyone. It's a rising tide that lifts all boats, or it's a growing of the pie so that everybody can have a greater slice. One of the things that's obviously happened is you've had a relative decline in the share of the global economy from the developed world and from the United States, and a relative increase in the share of the global economy from developing countries, but particularly from the Asian region.

What would you think of this way of looking at things then? America didn't get what it wanted fully out of economic globalization, or at least not yet. And there's been a lot of downside and a lot of pain, although a lot of upside certainly as well. But the good news is that the rest of the world has benefited at a faster pace. And therefore, it's a pretty good trade-off because the US is so rich to start with. And therefore, we should actually rejoice in the way that economic globalization has worked out so far. Is that a narrative you would endorse? So that doesn't take into consideration the way people actually value things or the way states

actually work. Many people might say, look, as long as we maximize global welfare, then that's the best outcome. But it's very, very clear that that's not the way individuals or the way states approach it. Well, there are a few academic economists and others who think that way, but most people couldn't care less about that. So we find individuals are incredibly sensitive to relative gains, but particularly to relative losses. And I would say countries as well are particularly concerned about relative losses.

As a child, Roberts excelled on the debate team. This led, perhaps logically, to the study of law, after which she spent several years with the big international law firm Debevoise & Plimpton. So we did a lot of work for government, but we also did work for corporations that were suing governments. But she wound up leaving the private sector for academia. She has since taught at a variety of law schools and won a variety of awards for her writing and research. Today, she focuses on what is called global governance. I sort of broadened out to not just look at the applications of laws, but also the way in which we govern different regimes. And when you say the way in which we govern, who's the we? That's a really good question. So I think when people think about

international law, they very much think about states and states coming together in international organizations. But global governance, I think, thinks about it more broadly. So you would think about participation of companies, of NGOs, of various actors that help create the different ways in which our world and our economy function. Consider, for instance, the World Trade Organization. It was founded in 1995 with a mission to ensure that trade flows as smoothly, predictably, and freely as possible. In 2018, we interviewed the then head of the WTO, Roberto Azevedo. Trade between China and the U.S. wasn't particularly smooth, predictable, or free, and the Trump administration was just ramping up tariffs against China. Here's what Azevedo told us. Regardless of whether or not we are in a full-blown trade war,

I think not a full-blown trade war. I think the first shots have been fired, clearly. And those hostilities have outlasted Trump. The Biden administration has not only kept tariffs in place, but they recently restricted U.S. companies from selling computer chips or chip-making technology to Chinese. And Thea Roberts says the establishment narrative of globalization has been attacked in the U.S. from both sides of the political spectrum. From figures like Trump, you'll get a right-wing populist argument. We can't continue to allow China to rape our country, and that's what they're doing. It's the greatest theft in the history of the world.

The right-wing populist narrative, they see the elite having allowed an external other to take advantage of the people. It can also be that they have failed to protect the domestic native population from external threats in the form of things like immigration. And some politicians on the left are just as skeptical of free trade, like Senator Elizabeth Warren. They put the level playing field promises in those trade deals. Good luck on getting them enforced. The left-wing populist narrative really takes issue with the establishment narrative's assumption that you're going to have redistribution. They say, no, actually the gains from economic globalization have been accrued largely by the

rich and at the expense of the middle class that has been hollowed out to the creation of now a much larger and more insecure service class. So these are the first three of the six narratives that Roberts explores, the establishment view, which defends globalization, and the populist challenges from the left and the right. You may well subscribe to one of these narratives yourself, but Roberts has three more narratives to consider, each of them critical of globalisation. The first is what she calls the geoeconomic narrative. Now, the geoeconomic narrative says what we want to do is focus on countries as a whole, but in particular on great power rivals. And here,

the leading example is the United States and China. And from the geoeconomic perspective, they would say, yes, China and the United States have both gained in terms of absolute economic outcomes from the period of globalization, but that China used this period to catch up with the United States to reduce the US's lead.'s lead economically, militarily, and technologically. And that's now creating all sorts of geopolitical and security concerns. In other words, trade is as much a foreign policy issue as an economic issue. And when you dwell on the costs and benefits of the economics, you might miss the geopolitics. Or if you want to think about it in terms of trade-off, economic gains may come at the expense of national security. That is Roberts's fourth

globalization narrative. The fifth is called the corporate power narrative. The corporate power narrative says, actually, we've got the wrong unit of analysis, that really the winners are not particular classes or particular communities or even particular countries. The real winners here are the multinational corporations that are able to use trade and investment deals to hop, skip and jump all around the world. And so this idea is really that what globalization has done is it has strengthened the hand of transnational capital against the hand of transnational capital against the hand of

transnational labor. If that strikes you as a depressing story, you might want to take a breath because her sixth and final narrative is the most depressing of all. You will recall that the establishment narrative, the first one she discussed, told a win-win story. It's a rising tide that lifts all boats or it's a growing of the pie so that everybody can have a greater slice. And all the other narratives have at least some winners. But her final narrative? When we go to the final narrative,

it's what we would think of as a lose-lose narrative. She calls this the global threats narrative. So here we see that there are certain global threats that have either been caused or exacerbated by economic globalization. And obviously the climate crisis is one that is front and central, but we can also see it with things like pandemics. On this idea that actually the way that we have integrated our economies and pushed so relentlessly hard for economic efficiency has created or exacerbated these global threats

that now have put us on a collision course with our planet. Which of Roberts' six narratives lines up best with how you see the world? They all have their share of noisy advocates, and they're not all mutually exclusive, but each of them does coalesce around a different set of concerns. That's one reason the conversations about globalization get heated and fast.

If you are looking through the lens of one narrative, it can be really hard to even consider the view from another. And Thea Roberts herself won't pick a favorite. I am much more interested in giving people tools that help them in how to think about complex problems rather than telling them what to think about complex problems. How do you weigh economic efficiency against concerns about traditional loyalty or how do you weigh economic efficiency against concerns about national security? I don't actually think that there is a clear right answer to that. One thing you write early in the book is that as we disentangle the debates that have been playing out in the Western media, six prominent narratives around the winners and losers from economic globalization emerged.

Now, when you say these stories have been playing out in the Western media, I wanted to ask you how influential the media is in not just presenting these different narratives, but making them believable. Because those of us who make journalism would say that we typically reflect the reality. It seems as if you're saying that the media to some large degree shapes the reality. The media is reporting and reflecting on and trying to make sense of what they see. But in doing that, they also create storylines, create ways of understanding things that then feed into what people read and see in their lives as well. And so the media kind of reflects reality, but also helps shape the next round of reality. As a member of said media,

I have to say, I don't want someone like me shaping the economic global reality. It's not that I'm not invested in it, but it's not my role. It's not what I'm good at. I don't have enough information. I don't have enough leverage and so on. Do you feel the media narratives are too influential? I don't think the media is doing this by themselves. We clearly see politicians doing this.

One of the things that you saw the media do after the Trump election in 2016 was really do a lot of soul searching of how do we miss the story that was coming out of so many places and how did we assume Hillary Clinton would win or how did we just assume that people were racist or xenophobic or stupid and didn't understand their interests. And so I think one of the things you've seen in the US is a bit of a reckoning of the need for greater inputs and diversity in terms of how you're reporting on things domestically. But I think that there would also be an argument for doing that internationally, because just as your East and West Coast dominate in the United States,

the Western media and the English speaking media dominates globally, and that makes it just much harder to understand perspectives from elsewhere. It makes me think of Philip Tetlock, the psychologist whose work I know you are very familiar with, and he's studied a lot of things, but especially forecasting and the fact that most of us are quite terrible at prediction. I asked him once to summarize the traits of someone who's particularly bad at predicting, and he said, yeah, there's one thing. It's dogmatism. Just drop the dogmatism and you'll immediately be much better. Now, that's obviously much easier than it sounds.

Do you have any general anti-dogmatic advice? Dogmatism is a killer because it makes you convinced that your perspective is right. And so the people who disagree with you must be either stupid or malevolent. I would say you want to sort of have active open-mindedness and curiosity, but you also want to deliberately practice empathy of trying to see things through others' eyes without immediately judging them. The reason we use the idea of six faces is we end up putting these narratives onto the sides of a Rubik's Cube. And one of the reasons I would do that is a way to intuitively get people to think in a more three-dimensional way. You may have your preferred narrative, but if you view everything

through that narrative, you tend to have a very one-dimensional view of what's happening. If you just look on a corner and you see two different narratives, you often have a very polarized view of what's going on. But if you zoom out and look at things from many different perspectives, you will also have a greater ability to think about ways that you might be able to mix and match different approaches so that you can come to new coalitions going forward. That, we should say, isn't so easy to actually do after the break.

If you treat China like the enemy, China will become the enemy. Also, a lot of people write to us at radio at Freakonomics.com to ask how they can support our show. Okay, I'll tell you how. The next time a friend or family member is looking for a podcast to listen to, tell them to listen to Freakonomics Radio.

It's that simple, really. Personal recommendations are the single biggest driver of podcast listens. So thanks for doing your part. I am Stephen Dubner. We will be right back. For a while, economic globalization was seen as a sort of panacea that would raise prosperity around the world while also smoothing out geopolitical relationships. It hasn't always worked that way, especially from the American angle. Russia and China have moved further into authoritarianism. Even in the West, nationalism is on the rise. But even among centrist liberals, some of whom were the biggest

champions of globalization, many of them are also retreating from pure free trade principles. Jake Sullivan, the Biden administration's national security advisor, recently said that Biden is looking to move beyond the old model of free trade agreements to a model that is more geared to today's economic realities and the lessons of the last 30 years. And Thea Roberts, the legal scholar and author we are speaking with today, has identified six narratives that govern our thinking about globalization. I asked her which of those narratives the Biden administration appears to subscribe to. The Biden administration is actually trying to bring together multiple narratives. I can give you a couple of examples of that. I think the CHIPS Act and also the Inflation Reduction Act both have this element. CHIPS stands for Creating Helpful Incentives to Produce Semiconductors.

So the CHIPS Act is a huge investment in semiconducting manufacturing and trying to bring that back onshore to the US. So that really combines a geoeconomic narrative of wanting to invest in cutting-edge technologies in terms of global competition, and it's got a very strong resilience aspect to the narrative of not wanting to rely on semiconductors being manufactured 90% in Taiwan, which may be subject to invasion. It's got a strong protectionist element of wanting to build back domestic manufacturing. We're even seeing the big Taiwanese chipmaker TSMC is building a factory in Phoenix, right?

Exactly. So the CHIPS Act, you actually got bipartisan support for. Where you got more of a division along party lines was the Inflation Reduction Act. That one has a very strong climate-first sort of clean energy transition, which is obviously something that is not bipartisan. But one of the things you can see is that they have, I think, a seven and a half thousand sort of tax credit towards electric vehicles, but you cannot have that subsidy if any of the parts of your electric vehicle have been manufactured in China. And so there you see a Biden administration that really wants to do clean energy, but also wants to do it in a way that supports technological investment with allies and onshore and sort of undermines support for technological investment in China. That's a

bringing together of multiple narratives. So to what degree would you say the Inflation Reduction Act and the CHIPS Act are what we might call a nationalist retrenchment? In other words, a pullback from what we typically think of as economic globalization? They definitely have a strong nationalist element to them, but it's not always just nationalist. They have a very strong climate change direction towards them. They also have a much stronger focus on friend-shoring or ally-shoring than previously. Instead of just open economic globalization, we're going to see more regionalism, but we're also going to see more economic agreements that are based on political and

values alliances. Let me ask you a question about the Chinese perception of the US. I read a piece recently called The Rise and Fall of Chimerica. And the argument was that for decades, China was infatuated with the US for its prosperity and its superpower status. But that as China gained on the US, that infatuation and respect began to decline. Here's a quote from the piece, they cannot believe that a society can keep rolling along as chaotically as America seems to do. I'm curious if you have anything to say about that observation, whether you think it's true, first of all, and if you think that that change of mind is really affecting the geopolitical relationship between the US and China? I think that change of mind is real. I remember reading people who had done work in America and

they said back in China that they used to always be called on to explain America as an example of how could we do this or how could we do that? And now they're called on to explain America as like, how do we not end up with that sort of inequality or how do we not end up with that sort of inequality? Or how do we not end up with that polarization? I also think that there has been a real sense in China that the United States is trying to contain China's rise, and that that is something that really pricks a strong national consciousness because of their experience with the century of humiliation at the hands of the West. The century of humiliation is the period of Chinese history starting with Britain's defeat of China in the First Opium War, fought from 1839 until 1842, and ending with the founding of the People's Republic of China in 1949.

If you treat China like the enemy, China will become the enemy. Negative interactions are much more powerful than positive interactions. This was work by John Gottman and his wife. And they first discovered this when they were looking at marriages. They found you needed to have five positive interactions to counteract every negative interaction. We're definitely not at the five positive to one negative. In fact, we might be in the reverse. I've read that some multinational firms are making contingency plans in case China actually goes to war over Taiwan. Can you tell me what you know about that? with Russia invading Ukraine is many people who thought that sort of thing would be unimaginable, it suddenly made it imaginable. And so a lot of governments and a lot of companies are starting

to think, okay, well, if there was a war over something like Taiwan, what would we do? What sort of sanctions would be imposed? At what point would companies leave? And so that sort of game planning is happening in the private sector and with governments. I'd like you to talk about how Russia has experienced globalization very differently from the US. And relatedly, Putin has repeatedly called Ukraine the West's anti-Russia project. So should we interpret Russia's war in Ukraine as a fight against globalization to some significant degree? and those have ended up creating incredible problems in the Russian economy. So we saw a creation of a system where things got sold off very quickly at very small prices. They were often bought by people that were politically connected.

It created tremendous lawlessness, tremendous drop in incomes. They had their own deaths of despair, extraordinary levels of inequality. By the time Putin came back in, there was a real sense from many people in Russia of, you know, we tried your Western approach and it really didn't work for us. One of the things Putin would say is that the end of the Soviet Union was the great geopolitical travesty for Russia. And so it's got a very, very different experience of economic globalization. But I think what you're starting to see be articulated by Putin is this sort of idea of the US and the West have been hegemonic in setting the rules, but also hypocritical in not following the rules when it doesn't suit

their advantage. What's an example of that? I guess the war in Iraq would be an example of that. The West would be very strongly condemning Russia's use of force, but then want to say that they had Security Council authorization, at least implicitly, to go into Iraq. There are also examples where the West uses what Putin would call its hegemonic advantage. So the way that the United States and the West control economic sanctions or the swift banking system. What you really see Putin saying is that what's happening in Ukraine is not really about just Ukraine, and it's actually not just about NATO expansion. What it's really about is standing up against Western hegemony. Talk for a moment about the political,

but especially economic, after effects of this war. Plainly, we don't know how things are going to turn out, But between Russia and Ukraine, they export, I think, about 30% of the world's wheat. Russia had been sending a lot of heating oil to Europe. So talk about who will be missing out and losing out and who will be winning. For instance, I see that Abu Dhabi is now going to be delivering its first shipment of natural gas to Germany later this year. So what kind of political but especially economic scramble do you see being produced by this war? There are going to be the short-term economic scrambles on things like food security. We think

about things like bread crisis as being one of the factors that led to the Arab Spring. I think that the medium-term to longer-term shift, though, is going to be twofold. The first is that the West is very much cutting Russia off as an unreliable partner, so that will make it look more towards China. What I think it's done in Europe is an extraordinarily fast realisation

that they had become economically interdependent on core parts of their economy, including in a very concentrated way on certain other economies, but in particular in a very concentrated way on countries that they now consider to be foes. So let me ask you a naive question. Is the global economy actually globalized? I think it has never been fully globalized and it's becoming less globalized. Some things globalize more than others. You know, trade and goods has globalized more than others. But even then you see things like the gravity model of trade that suggests that a lot more trade happens more closely than at further distances.

So it's never been pure. In things like migration, actually, even though there's very strong pushback to immigration, migration levels are not massively high in an absolute sense. So we've often globalized capital and we've globalized goods, but we haven't globalized labor. I think we've historically thought of the internet as the worldwide web. And we've known for a long time that China has carved out through the great firewall of China, a more Chinese part of the net. But what we're now seeing is Russia carving out a bit more of a Russian internet. We're seeing fragmentation in a whole variety of areas.

And what about the globalization of ideas? Isn't that what we ultimately, I guess, at the highest level care about? I mean, the trade in goods is really important. Services, sure, important. Internet, sure, important. But how freely or well would you say that ideas are actually flowing around the world right now? You definitely saw a wonderful flow of ideas and collaboration among scientists with respect to the COVID-19 pandemic,

for example. And I think in many ways, science is much more globalized than many other areas. But we also, I think, have some real blind spots and asymmetries that come with where our best university is located, what languages do most people use? What media do they read? All of those things still give us a very, very strong asymmetry and bias towards the West, towards English speaking. And I think that one of the things that we're going to see with the rise of Asia in particular is more of a rebalancing on that. The other thing I should say is that some of the dynamics that we're seeing geopolitically play out at the moment, I think will have quite a chilling effect

on the global flow of ideas. A lot of what you saw in the United States with the China initiative that was trying to target research collaborations between Americans and Chinese institutions, or often targeting people of Chinese nationality or ethnicity that were working in the United States. And these were often people who'd been working in academia in the US for years and years, yes? Yes, absolutely. Those sorts of things, I think, end up having quite a chilling effect, both on the attraction of global talent, but also on the kind of collaborations that you could have. So I think we're going to see more separation of the technological ecosystems between China and the West, and that will make academic and scientific

collaboration harder. Anthea Roberts has her views of globalization, at least six of them. After the break, what happens when you ask economists to adopt a different point of view? I think where the economists struggled was in dealing with things which are value questions that they just don't quite know how to answer. I'm Stephen Dubner, and this is Freakonomics Radio. Please remember to tell your family and friends to also listen to Freakonomics Radio. We'll be right back. Over the years on this show, we've had conversations about globalization with many economists, with politicians, with officials from the World Bank and the World Trade Organization, but never, at least as far as I can recall, a legal scholar such as yourself. So how does your perspective as a legal scholar differ and perhaps improve upon, for our purposes,

those more standard views? Legal scholarship really trains you in two different ways. So the first is it teaches you to take the role of an advocate. When you're a barrister or a solicitor and you take a case, you don't necessarily agree with that case, but you learn to argue and make it understandable to other people who may not instinctively like it or agree with it. But the other thing you also learn is the role of mediation or the judge, which is how do you take on board arguments from different sides and come to a sort of more synthesized, integrated

conclusion that balances out and brings together those two different perspectives. When we went through the review process on this book, apparently the economist who presented it said, an economist couldn't have written this book because we're told to optimize something. And what are we going to optimize? And I think the very nature of a complex, more pluralistic approach is if you're trying to optimize one thing, then inevitably you're going to create problems because there are going to be things that you're missing. How much blame do you place on economists or maybe the economics profession for what turned out to be pretty poor forecasting for how economic globalization and trade liberalization would work out. I don't want to throw the economics profession under the bus, but there was the sense that they had given this idea strong approval. I think economists did two different things.

The first is that they tended to really simplify their case when they talked to the public. So if you'd asked economists in a graduate seminar, is free trade good? They would have been like, well, good for who, on what timeframe, you know, all sorts of qualifications. But whenever you saw an economist speak to the public, speak to newspapers, they really simplified their message in a way that made it all win-win, which when there were clearly communities that weren't winning, led to the loss of faith. I don't fault the economists for making incorrect predictions on some of these things. The prediction is incredibly hard. What I fault is a kind of a

disciplinary arrogance that means that you're less likely to take on board views from different areas or different disciplines that don't speak the same language as you. So there's a lot of research, for example, that says that many other social sciences are much more likely to cite economics than economics is likely to cite other social sciences. What we really want to do is encourage all of our disciplines to be more humble and open, that they all offer insights into some things and can have extraordinary blinders with respect to others. I know you presented your book to a variety of constituencies and audiences, some of them academic. Tell me about presenting it to economists. Yeah, we definitely got mixed responses from economists. So some economists are a bit like,

well, aren't these just falsifiable claims and we can just work out, is this correct or is this wrong? And there are some narratives where there are going to be empirical questions. To what extent are job losses caused by trade and to what extent are they caused by technology and what is the interplay between those two? There is an empirical answer to that. A hard problem to solve. Incredibly hard. But there is an empirical answer. Yeah, and there are techniques you can try to get at.

But I think where the economists struggled the most was in dealing with things which are sort of value questions that they just don't quite know how to answer. Many of the different narratives are valuing something else that's just not commensurable with efficiency. One critique of economists over the years has been that they know the price of everything and the value of nothing, which is, you know, a pretty harsh indictment if you're trying to acknowledge that value and price are not the same thing. But do you feel that a lot of economists these days, especially younger economists, are opening their views to finding value in things which are not

so easily priced? So I think you've seen real shifts in the economic profession about thinking about inequality, both across classes and across regions. I think you're also seeing a new generation of economists that are thinking much more about climate change and how to value the environment and what we can do to sort of reorient our economies towards clean energy. Kate Raworth is famous for doing the donut economics approach. And one of the things she says is that we've typically taken an approach of maximizing economic efficiency and maximizing gross domestic product. And that this has put us on a collision course with our planet because it's meant we've really destroyed our environment. Here is the economist Kate Raworth from a 2020

interview on this show. So the standard economics I learned was not based on a delicately balanced living planet. There wasn't really a planet. Anything natural was called an environmental externality. And here's Raworth explaining what she calls donut economics, which is the title of a book she published in 2017. So imagine a donut, the kind that's got a hole in the middle, and we want everybody to be living in the donut. That means kind that's got a hole in the middle, and we want everybody to be living in the donut. That means no one is in the hole in the middle where they're falling short on the essentials of life without food or water, healthcare, housing, education, political voice. But at the same time, don't overshoot the outer crust of the donut. We put so much pressure on

our planet, we begin to push her out of balance and we cause climate breakdown and we acidify the oceans and create a hole in the ozone layer. So it's a balance. Meet the needs of all people within the means of the planet. And Thea Roberts again. And that's the basis of donut economics, which really seeks to take economics and put it towards a different set of goals, but also to recognize some more fundamental constraints on our economic models. One critique I've read of your book is by the economist Jason Furman, former head of the CEA, the Council of Economic Advisors in the Obama White House. Here's a quick quote. The left-wing narrative, one of several that you describe,

that trade helps the rich at the expense of the poor, was stronger on facts about increasing inequality than it was on analysis linking this in any qualitatively important way to trade. Yeah, look, I think that's actually accurate about where the left-wing populists are. So, I think the left-wing populists are much more concerned about class inequality, and they tended to sort of have a hostility to things like international trade deals, but they themselves didn't fully explore the link between those. I think what Jason's saying is correct, but I think it's correct about the left-wing populist narrative, that they sort of make an assumption that this is partly to do with trade, but they don't really fill that out. Here's one more critique from Furman that I found interesting. Some of the zero-sum perspectives in the different faces, he writes about your

six faces of globalization, are clearly based on fallacies and misconnections that should be dispelled and not sympathized with. In other words, don't give narratives that I, Jason Furman, think are illegitimate an equal hearing. Whereas you go out of your way to say one of the best ways to analyze the world, or in this case, economic globalization, is to put yourself in the position of those who have grievances. So is that just an irreconcilable difference between your mission here and his reading of it? Is this just an economist being an economist? Look, people can have very different approaches to this issue. We don't say that you as an individual shouldn't ultimately end up coming to judgments about what you agree with and what you disagree with. What we say is that the first thing you should do is try to understand things that may not initially seem right to you.

There are elements that you may understand and there are elements that you may dislike, and I think that it's okay to draw those lines. But I wouldn't draw them too quickly, because I think when you draw them too quickly, you often don't understand in the first place. And so I think where economists, for example, were very, very quick to draw the line quickly was about the relationship between China and the United States to say, look, they both gained in absolute terms from economic globalization. We know that we get more from cooperation. From an economic welfare absolute gain perspective, you as the technological leader should collaborate with the technological up-and-comer. But ultimately, for a country like the United States, your national

interest is about reconciling and balancing those absolute economic welfare gains against security positional loss. And what we're starting to see in US policy, whether you agree with it or not, is sort of a changing perception of the balance between those two things. It matters who builds our 5G. It matters who has access to all of our data. And those are not questions just of comparative advantage. I love the way that you think about and explain these concepts, both the economic components of globalization and the political components of it. Now, you happen to be a legal scholar, and I think there's certainly some connection between your background and your ability to not just explain globalization this way, but to think about it. Which makes me think that maybe there's something inherent in legal thinking,

legal training that provides that benefit. On the other hand, many of our politicians, in the US at least, are lawyers, and they don't seem particularly good at all at seeing and balancing all these different perspectives. So if you could have a heart-to-heart with your legal fraternity, with your colleagues in U.S. government, what would be one thing that you might say that could somehow dodge the heavy, heavy, heavy artillery of the partisan language that we all participate in now to encourage them to think a little bit more about these global issues from a slightly more sophisticated perspective? I would say consciously try to put yourself in multiple different positions. Consciously try to think, what would the world look like if I was a manufacturing worker in one of these towns? What would the world look like if I was sitting in Beijing and had the experience of the century of humiliation and I was now looking at these American approaches?

What would the world look like if I was sitting in Russia and I had gone through the terrible 90s of the loss in income and the security challenges? And really empathetically try to situate yourself in multiple different perspectives. It's something I would say you can apply at many different scales in your life. So I think it applies in your interpersonal relationships. So when you think about something in your role as a couple, what does it look like from my perspective and what does it look like from my partner's experience and from their perspective? I think you see it with Republicans and Democrats. You see it with

the US and China. You see it across many different things, everything from your interpersonal relationships to your geopolitical relationships. I love it. I came for the geopolitics and I stayed for the marriage counseling. Thank you very much. It was a pleasure to join you. Thanks to Anthea Roberts for today's conversation. Her book is titled Six Faces of Globalization, Who Wins, Who Loses, and Why It Matters. Her co-author is Nicholas Lamp. I would love to hear what you thought of Roberts' arguments. We are at radio at freakonomics.com. Coming up next time on the show. This is the biggest change to hit labor markets in many decades. Nearly three years since the pandemic started,

the work from home revolution is still a thing. So how's it going? Flexible work is a double-edged sword. One thing that we're concerned about is this possibility of an urban doom loop. An urban doom loop? I just figured I can't be the only one having these struggles. The winners, losers, and unintended consequences of working from home. That's next time on the show.

Until then, take care of yourself, and if you can, someone else too. by Zach Lipinski. Our staff also includes Neil Carruth, Gabriel Roth, Greg Rippin, Ryan Kelly, Rebecca Lee Douglas, Julie Canfor, Morgan Levy, Catherine Moncure, Jasmine Klinger, Eleanor Osborne,

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