Make the Rich Pay… for the Sake of Globalization

“Tax the rich more heavily to thwart an economically crippling political backlash against trade prompted by workers who see themselves–with some justification–as losers from globalization. . . . using the tax code to slice the apple more evenly is far more palatable than trying to hold back globalization with policies that risk shrinking the economic apple”

This quote is not from some leftist newspaper or website but from today’s Wall Street Journal, in which David Wessel discusses an article from a former Bush economic adviser. The idea is pretty simple: Globalization boots productivity and growth but because the gains are distributed unevenly, the public could end up preferring protectionist policies; therefore, the future of globalization may lie in progressive taxation and redistributive policies.

It’s always nice to see free market fundamentalists come around and acknowledge what many mainstream economists (e.g., Krugman, Rodrik) and political scientists (e.g., Garrett, Swank) have been arguing for a long time. As Dani Rodrik put it recently in a discussion of Paul Krugman’s position, “the need for social policy becomes greater when globalization exerts downward pressure on wages and creates new risks and anxieties. As a large and venerable literature has shown, countries that trade more have larger social programs and more generous safety nets.” It follows that, in contrast to what opponents of globalization claim, free trade does not necessarily entail less social spending. Actually, it requires more.

Gender Diversity in the Next French National Assembly

Last week I raised the issue of minorities in the current French legislative election. Following up on this, I want to point out an interesting column by MIT economist Esther Duflo that came out today in Libération. She discusses the likely absence of gender diversity in the next French National Assembly, which should include about 15% of women (today it includes 12.3%). France is thus under the European (19.8%) as well as world (17.3%) average. It also does worse than Africa and Asia. The only countries where women are less represented are Arabic, with 9.6%. That’s pretty bad for a country that came up with the Declaration of human rights more than two centuries ago. But perhaps the fact that the Declaration concerned the rights of men (the French talk about the “droits de l’Homme,” “Man” being an all-encompassing, universal reference) should have given us a hint.

But what about the 2000 parity law that aimed at promoting equal representation between men and women? As Duflo explains in her column, the incentives of the law are not properly distributed because they focus on the first ballot and ignore the second. Put differently, women need not be elected for parties to abide by the law; their presence as candidates in the first ballot suffices. But insofar as they generally run in districts that they are unlikely to win, their presence is simply a token and men continue to monopolize winnable districts and seats at the National Assembly without parties having to pay major fines. Hence the question: What was the law for?