Globalization and Its Costs
The expansion of global trade, who it enriched, and what it left behind
Free trade is among the most robust findings in theoretical economics and among the most contested claims in applied economics. The gap between the two reflects not a failure of economic theory but a failure to account for distribution: trade that increases aggregate output while concentrating gains at the top and spreading losses broadly can produce political backlash even when the numbers are positive in aggregate.
Free Trade Theory
Comparative advantage is elegant and partially correct. What it omits is more important than what it explains.
NAFTA
The 1994 agreement restructured North American production -- with benefits concentrated at the top and costs distributed broadly.
The China Shock
China's entry into global trade produced adjustment costs in American communities that economists systematically underestimated.
Who Benefits
Globalization increased aggregate output. The question of who captured those gains admits a precise empirical answer.