Dani Rodricks argues that globalization is an important aspect in international trade if it is bound by legal, social and political authority. This means that trade should not be free without intervention. This argument has its roots in the economic differences between the rich and the less developed countries where differences in economic strength and the size of government hinder balanced control of trade. However, free trade is beneficial to many countries since it opens up chances of trade in new markets which had been locked by tariffs and quotas. It is not right for Rodrick to assert that free trade poses a threat to welfare of countries in regard to social and political setting. This paper tries to uncover the facts; why is international trade beneficial to nations? How does it influence political and social setting?
According to Rodrick, Free trade diverts trade and profits. It determines where profits are made and who determines them. A country with high production capabilities stands a chance for more expansive markets. This explains why countries like china and India have developed so fast with introduction of free trade. As opposed to Rodrick, free trade opens up trade for mutual benefits and does not disrupt the democratic processes of a country. This is because trade does not interfere with the political environment of a country. As such, it should be left to be controlled by market forces. Expansion of trade is beneficial to governments since they are source of economic well-being.
In a nutshell, trade increases the level of incomes and the macroeconomic variables of a country such as employment, revenues and many others. Therefore, it is not right for Rodrick to assert that free trade poses a threat to welfare of countries in regard to social and political setting.
Works cited
Rodrik, Dani. The Globalization Paradox: Democracy and the Future of the World Economy. New York: W. W. Norton & Co, 2011. Print.
