Re: Is free trade fair trade?

David Dollar: As I said, I consider myself to be a pragmatic progressive because I would be in favor of significantly more public spending on education  for example in the United States. But the pragmatic adjective means we have to be smart about how we do that. There are cases where we spend a lot of money and we don't get much result. So I think we need to look at what would actually lead to better educational outcomes in inner cities, for examples, and different kinds of communities in the U.S. But I would be in favor of spending a lot more on education. I would be in favor of some kind of national health system. I know this is controversial and I'm not the best expert to design the details, but I do think the United States could learn from other countries that have more successful systems that provide health insurance to more or less the whole population. So I think there are things you can do with health and education that would cushion a lot of families from some of the shocks that come with globalization. I'm also a fan of progressive taxation. Frankly I can get into the specifics of U.S. tax policy. As a World Bank official it 's not really my role; but I feel comfortable saying that I believe in progressive taxation. I think if a country has very good institutions . . . you know, good institutions, and property rights, and good educational system, I think you can have progressive taxation and you don't t have to worry that all your rich people are gonna leave because your country is actually a very nice, productive place to operate. So I think if the U.S. continues to strengthen its basic institutions, I don't think a lot of people will leave if tax rates go up modestly. So I would be in favor of using . . . These are your basic fiscal tools. How do you raise tax revenue? And then what public goods do you spend it on? I think that we can do a lot. I think any rich country can do a lot to make people's lives better and cushion some of the shocks of globalization, and i am completely in favor of that. Some of my critics caricature me as being something of a neoliberal, and I completely reject that. I think the free trade idea is a classic liberal idea, and I associate it with progressives going back a long way. So I don't see how cutting your economy from the rest of the world is a progressive idea when, from the point of view from the U.S., most of the rest of the world is poor. They wanna trade with the U.S. They want to come to the U.S. They want investment from the U.S. I don't see how cutting U.S. off from the poor world is in any way to progress an agenda.

Recorded on: 7/3/07

 

 

Dollar talks about making globalization more equitable.

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