Friday, July 3, 2015

A tale of two trilemmas

I am honoured that Branko Milanovic spent some time thinking about a question I asked in his recent talk at IESE in Barcelona. This is the result of his thoughts. After explaining the two trilemmas (his and Rodrik’s), he reflects on the fact that the point they have in common is globalization, and that in practice more than clear corners of the trilemma we have some intermediate or fuzzy realities, such as not very democratic international institutions. 
What the trilemmas show is that while they are useful constructs to try to understand things, reality is more complicated to be shoe-horned into the schemata. In effect, in both cases, the three cartouches that we drew above continue to exist (none has been “deleted” as we would expect in a real “solution”) but are being redefined. 
Here we have perhaps the foundations of an interesting debate with the more optimistic although perhaps unjustified view of Josep M. Colomer about global institutions. Still, I believe that both trilemmas are useful to describe the tensions we live in. It seems difficult to me to understand some of the pressing issues in Europe (Greece and immigration) without thinking of the trilemmas. Rodrik has a recent piece on the federal deficit in Europe. In it, he seems for the most part to be willing to abandon national sovereignties (the opposite of what he does in his book "The Globalization Paradox") although at the end of the article he goes back to federal pessimism, which I guess has intensified with the drama in Greece. The current situation there reflects precisely the social costs of the “federal deficit.” But given the ghosts of Europe, and given Milanovic’s trilemma (which I interpret as walls to globalization being incompatible with technology and inequalities), I dare to simplify even more than using trilemmas: it’s misery or democratic federalism... But OK, accepting that reality is more complex.

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