By Kimberly Clausing
Globalization has a bad name. Critics on the Left have long attacked it for exploiting the poor and undermining labor. Today, the Right challenges globalization for tilting the field against advanced economies. In Open; The Progressive Case for Free Trade, Immigration, and Global Capital economist Kimberly Clausing faces down the critics from both sides. She demonstrates in this vivid and compelling account that open economies are a force for good, not least in helping the most vulnerable.
A leading authority on corporate taxation and an advocate of a more equal economy, Clausing agrees that Americans, especially those with middle and lower incomes, face stark economic challenges. But these problems do not require us to retreat from the global economy. On the contrary, she shows, an open economy overwhelmingly helps. International trade makes countries richer, raises living standards, benefits consumers, and brings nations together. Global capital mobility helps both borrowers and lenders. International business improves efficiency and fosters innovation. And immigration remains one of America’s greatest strengths, as newcomers play an essential role in economic growth, innovation, and entrepreneurship. Closing the door to the benefits of an open economy would cause untold damage.
Instead, Clausing outlines a progressive agenda to manage globalization more effectively, presenting strategies to equip workers for a modern economy, improve tax policy, and establish a better partnership between labor and the business community.
Accessible, rigorous, and passionate, Open; The Progressive Case for Free Trade, Immigration, and Global Capital is the book we need to help us navigate the debates currently convulsing national and international economics and politics.
Publisher: Harvard University Press
Carmela Chivers on Inside Story wrote:
"Aimed squarely at self-declared 'progressives' in the US, Kimberly Clausing’s new book is an apparent attempt to influence debate within that country’s Democratic Party as it selects its standard bearer to take on Trump in the 2020 presidential election. While acknowledging the need to improve trade, investment and immigration policies, and to introduce a range of other policies to mitigate any negative impact of globalisation, she warns against the temptations of rejecting economic openness. [...] Clausing is an acknowledged expert on multinational corporations and their taxation. It is on this theme that her analysis is deepest, her critiques most cutting, and her policy proposals most developed. [...] It is on immigration that Clausing is most effusive. [...] The central argument of Open is that rather than pandering to populist impulses by blaming foreigners for the ills of society and shooting ourselves in the foot in the process, policymakers should instead directly tackle the root causes of stagnant wages and economic inequality. Rather than being as bold as the author seems to think, her proposed policy responses are a bare minimum that progressives should view as necessary for 'a more equitable globalisation': better education, investment in infrastructure, community-centric adjustment funds, a more progressive tax system, funding for scientific research and using competition policy to address concentrations of market power. She leaves unexamined, however, truly bold policy ideas like universal basic income. [...] Clausing’s writing is fluid, engaging and accessible to the non-specialist. As such, it is a worthy contribution. In her eagerness to persuade, however, the author has a tendency to verge into hyperbole which could come across as tone-deaf to the very people she is trying to convince. At times, she risks excessive reductionism, as when calling on readers to imagine a self-sufficient Finland engaging in zero trade."
Leonard E. Burman on Tax Policy Center wrote:
"The solution, as she sees it, is for countries to become more open, for nations to be more willing to work together on global policy issues, and for leaders to enact progressive tax policies to share the gains from globalisation between rich and poor. Trade agreements can — and should — counter policy competition between nations, she says, by 'helping governments work together' on difficult global problems. International cooperation is needed to crack down on tax havens, counteract climate change, and enforce internationally consistent labour standards. More funding for education and structural-readjustment programs can reskill workers after trade and technology shocks. The problems Clausing identifies are worth thinking through carefully, and her solutions are what you’d expect of a well-trained economist with left-leaning social values. But there’s something missing here. On the one hand, as economist Dani Rodrik points out, compensating workers who lose out from globalisation is made more difficult under free-trade rules that see any domestic regulation as a barrier (or facilitator) of trade competitiveness. On the other hand, figuring out a harmonised set of agreements to spread the gains of free trade more broadly could undermine the right of sovereign nations to design their institutions and regulations."
"Clausing supports her arguments with a treasure trove of useful data. The book would be worth buying just for the tables and charts (although the explanatory narrative is engaging and enlightening too). [...] Clausing also includes lots of amusing and illuminating stories. [...] Thomas Piketty was criticized for breezing through his policy solution to inequality in his book, Capital. Clausing might go too far in the opposite direction in Open. She includes three chapters of policy proposals that go far beyond immigration and trade. It’s kind of a smart academic’s version of the Green New Deal with much more detail. I fear her liberal utopian policy vision will alienate some readers who otherwise will find the analysis of trade and immigration appealing. [...] The book isn’t perfect. There's some unnecessary repetition [...] And the book sometimes falls into jargon. [...] Those quibbles notwithstanding, Open should be required reading for every presidential candidate in 2020, every journalist on the election beat, and everyone who pulls a voting lever. That won’t happen, but if you want to get beyond the recent wave of fact-free rhetoric about globalism, you should read this book."
Lecture + Panel Discussion about the Book
Short lecture (22 minutes) by Clausing at the Brookings Institute on 1 February 2019:
You may also want to watch the panel discussion at the Brookings Institute, which followed this lecture.
- "5 reasons Democrats should be the party of free trade" - OpEd by Clausing at The Hill, 31 July 2019
- "Building a Better Globalization" - recommendations by Clausing in the Harvard Business Review, 13 May 2019
- "5 Questions: Kim Clausing on Open" - interview with Clausing at the blog of Hardvard University Press, 27 March 2019
There are also several podcasts in which Clausing talks about the book, such as on the website of the Financial Times and on Bloomberg.
About Kimberly Clausing
Kimberly Clausing is Thormund Miller and Walter Mintz Professor of Economics at Reed College. She is one of the country’s leading experts on the taxation of multinational corporations, a subject on which she has testified before Congress. Clausing has written for the New York Times and Fortune and spoken on National Public Radio.
Table of Contents of Open; The Progressive Case for Free Trade
- Making the Global Economy Work for Everyone
- Middle-Class Stagnation and Economic Inequality
- The Case for International Trade
- Winners and Losers from International Trade
- Trade Politics and Trade Policy
International Capital and International Labor
- Who’s Afraid of the Trade Deficit?
- Multinational Corporations
- Immigrants, We Get the Job Done!
Securing the Future of the Middle Class
- Equipping Workers for a Modern Global Economy
- A Grand Bargain for Better Tax Policy
- A Better Partnership with the Business Community
- A More Equitable Globalization