The Price of Nostalgia
Article

The Price of Nostalgia

America’s Self-Defeating Economic Retreat

Adam S. Posen
Foreign Affairs, 2021
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The typical globalization narrative says that America leads the world in expanding open trade, liberalizing capital flows across borders and championing foreign direct investment. Sadly, this does not align with reality, according to economist Adam Posen. In this compelling article, he contends that the United States in fact pursues decades-old policies geared toward protectionism, trade restrictions, barriers to investment and curbs on immigration. While critics blame globalization for current US political, economic and social discord, Posen holds that the real culprit is America’s retreat from the international economic stage.

Summary

The United States has largely withdrawn from globalization.

According to politicians of all stripes, globalization is at the root of the political rancor, social discontent and economic friction that dominate US society. Yet America’s trade-to-GDP ratio increased only modestly from 1990 to 2008, inching up from 20% to 30% over the period. In comparison, the global trade-to-world-GDP ratio surged from 39% to 61% in that timeframe. Though global trade flows plummeted during the Great Recession, activity climbed back to its 2008 level in 2019, but trade numbers in the United States have still not recovered.

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About the Author

Adam S. Posen is president of the Peterson Institute for International Economics.

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