An Economist Who’s Not Only an Economist

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bagwati2.jpgThe latest Radio Economics interview is with Jagdish Bhagwati- world renowned trade economist. The discussion touches on topics like immigration, global warming, globalization and future leaders in the world economy. He’s critical of one of his students Jeffery Sachs (for advocating shock therapy in Russia and ignoring the Russian social setting), calls Stiglitz’s book, ‘Globalization and Discontents’, a ‘silly book’, refers to Kyoto Treaty as ‘the most idiotic treaty I’ve come across’. I liked his comments about global warming and immigration issues in the US. I can’t believe that Nicholas Stern, former Chief Economist at the World Bank has never heard of the Super Fund – and he’s been advising Tony Blair on global warming. His advice to budding economists- ‘if you want to have an impact on society- you better be a broad economist’.

Krugman credits Bhagwati’s willingness to see things differently which allowed him to come into prominence with new trade theory.

“It was during those early years that I formulated my summary of the reaction of a lot of people in Economics – presumably in any field but certainly in Economics – to any seriously new idea, which is, “It’s trivial, it’s wrong, and, furthermore, I said it in 1962.” At that point, Jagdish had created a marvelous institution, which was the Journal of International Economics, which could, very easily, in someone else’s hands, have been the bulwark against change, could have been a monument to the field’s orthodoxy at the time. Instead, it became the ground, the place, in which much of the new stuff was published – and with some difficulties. Twenty-six years later – you can still remember all those lousy referee reports and rejections on the first papers, and Jagdish plowed ahead and published it in the JIE, and – not just me, but other people – I remember Jim Brander, that there were some extremely negative reports from other people, but I went to bat for him, and Jagdish did….So I think that Jagdish deserves a lot of the credit for the now quite old, long in the tooth, new trade theory coming into prominence. He really made a tremendous difference – obviously to my life, but I think also to the field of International Economics.”

Bhagwati’s way with words and mastery of metaphors is well known;

“Take, for example, the brother-in-law analogy that he uses to highlight the distinction between rent-seeking behavior and corruption. When you lobby for rents and use up resources, he explains, it is a directly unproductive (DUP) activity. But if there is a brother-in-law to whom the rents are inevitably headed, nobody will bother to lobby. In this case, there is corruption but no DUP activity. Unless, of course, some farsighted crook devotes resources to court the sister in order to become the brother-in-law in order to get the rents. Then we are back to rent-seeking.

Commenting on those who argue against free trade because it leads to de-industrialization and destroys linkages between industry (ketchup makers) and agriculture (tomato growers), he observes: "As I read the profound assertion about the tomato farm and the ketchup plant, I was eating my favorite Crabtree and Evelyn vintage marmalade. It surely had not occurred to me that England grew its own oranges."

Related Links:

- The Poor's best hope

- In Defense of Globalization- webcast

- Radio Economics podcast- download now, freely available for limited time

1 Comment

Which is why I have long recommended Jagdish Bagwati for the Bank of Sweden's Nobel Prize nomination.


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This page contains a single entry by Paul published on April 28, 2006 12:18 AM.

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