Jeffrey Frankel is Harpel Professor of Capital Formation and Growth at Harvard University's John F. Kennedy School of Government. He served on President Clinton's Council of Economic Advisers from 1996 to 1999.
Many economists despair at the public's frequent misunderstanding of international trade theory -- the common failure, for example, to understand the principle of comparative advantage, or the popular notion that imports are bad and exports are good. Many experts have thus given up the attempt to communicate with the general public. But Jagdish Bhagwati, one of the world's most eminent economists, is also one of the most consistent and successful at bringing the lessons of international trade theory -- particularly the virtues of free trade -- to the public. In Seattle in 1999, for example, he explained why the campaign to bring environmental and labor issues into the World Trade Organization (WTO) was detrimental not only to the trade interests of the rich, but especially to those of the world's poor, who need the opportunities offered by trade to develop their economies and raise their living standards.
The Wind of the Hundred Days, a collection of many of Bhagwati's recent influential newspaper columns, speeches, and articles, is an impressive sequel to his earlier collection of public policy essays, A Stream of Windows. Highly readable and enlightening, Bhagwati's new book covers the major policy issues in the international economy over the last few years. Yet it is also packaged as a critique of the Clinton administration's international economic policy -- and here its line of argument is idiosyncratic.
TWO BIRDS, ONE STONE
A recurrent theme in The Wind of the Hundred Days is the principle of targets and instruments: given a particular social or economic goal, one must choose the policy instrument that is appropriate for the target. One of Bhagwati's most important early contributions to trade theory (made with V. K. Ramaswami) was to show that rationales for trade barriers are often claims of market failure that, if valid, would be more appropriately addressed by some other specific policy. For example, a desire to protect a natural resource would be optimally met by taxing all use of that resource, not
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