Globalization and its disconnect

While seemingly elegant in theory, globalization suffers in practice. That is the lesson of Brexit and of the rise of Donald Trump in the United States.

Truth be known, there is no rigorous theory of globalization. The best that economists can offer is David Ricardo's early 19th century framework: if a country simply produces in accordance with its comparative advantage (in terms of resource endowments and workers' skills), presto, it will gain through increased cross-border trade.

Trade liberalization - the elixir of globalization - promises benefits for all. That promise arguably holds in the long run, but a far tougher reality check invariably occurs in the short term. Brexit is just the latest case in point.