Dani Rodrik: evaluation

Transcript context

…Thank you. I’m a teacher here. I have my class here, in fact, today. We are at the moment studying systems that produce structural conflicts. It makes me want to ask you, when you talk about premature deindustrialization, we’re in the middle of looking at Rosa Luxemburg’s work. I wondered what your explanation is for whether there are structural causes for premature deindustrialization. If Luxemburg were here she would be talking about the effects of imperialism. I wonder how you would explain it. Of course, in the 19th century, it was formal and informal empire. The so-called unequal trade treaties and so forth. You had India and China and the Ottoman Empire, all these nascent textile industries being decimated by imports from Britain. But, of course, we also have cases like Japan, which in the late 19th century, despite having very low tariffs, being able to develop its own domestic industry. We have at least one exception, even back then, of a country that could industrialize despite those circumstances. The late 20th and 21st century analogue of that imperialism, if you will, is China because it’s been China that has been essentially swamping the world with manufactured goods. You go to a country like Ethiopia today in Africa and basically everything is imported from China. Fifty years ago, a country like Ethiopia would be manufacturing very simple things, from footwear to tables and chairs to cardboard boxes. But now, everything is coming from China. The fact that we moved to a stage of the world where a country like China is able to exert such strong effect on world markets in manufacturing means that the opportunities for import substitution in manufacturing is significantly less today in the low income countries that have opened themselves up. It’s not, obviously, imperialism but it’s sort of like, if you will, the imperialism of free trade might be one way of putting it for our current experience. That’s clearly one. It’s also, in terms of the fact that earlier I was saying that traditionally manufacturing has had the ability to absorb a lot of unskilled labor. Manufacturing has become more and more capital-intensive over time. That means that now even garments or textiles, footwear, they’ve become fairly skill-intensive activities. The Chinese entrepreneur I mentioned, when she goes to Ethiopia and opens up a footwear plant, she’s using a very different kind of labor. University graduates and many, many fewer of them compared to what the Chinese experience was. I think changes in technology and globalization have been, I think, the two structural factors behind pushing for premature deindustrialization. Thank you.…

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