Globalization
William Easterly
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
Abstract
The passion that surrounds the vague term ‘globalization’ is best seen as a proxy for the long-standing debate about free-market capitalism. The zero-sum mindset, the difference between Pareto superiority and common norms of fairness, and the belief that all outcomes are caused by an intentional agent often cause communication problems between non-economists and free-market economists, who themselves often exaggerate what ‘free-market reforms’ can accomplish and endorse overly ambitious programmers of change (‘shock therapy’), underestimating problems of transition and the second best. Economists could try to understand the protests against ‘globalization’ rather than dismissing them out of hand.

How to cite this article
Easterly, William. "Globalization." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 25 August 2009