Eleventh Global Studies Conference

Abstract

This paper analyzes skill-biased technological change and interrogates the long-standing notion that “free” trade lifts all boats, and thus also benefits the less and semi-skilled labor population. The paper also explores the institutional reasons and the incentives that allowed for the development of a rigid orthodoxy in the the public policy discourse on recent trade-finance-driven globalization. The paper argues that the hermetic approach to trade policy, despite warnings delivered by decades-old theories (Stolper-Samuelson) which had established that trade can lead to creation of winners and losers, and new divisions of global labor pools, has resulted in the creation of dual economies in economically advanced economies. The paper addresses the resulting inequality and social struggle that is emergent due to that and explores ways in which a more balanced and equitable globalization can be developed at this stage.