Free Trade Reimagined: The World Division of Labor and the Method of Economics

Free Trade Reimagined begins with a sustained criticism of the heart of the emerging world economy, the theory and practice of free trade. Roberto Mangabeira Unger does not, however, defend protectionism against free trade. Instead, he attacks and revises the terms on which the traditional debate between free traders and protectionists has been joined.

Unger's intervention in this major contemporary debate serves as a point of departure for a proposal to rethink the basic ideas with which we explain economic activity. He suggests, by example as well as by theory, a way of understanding contemporary economies that is both more realistic and more revealing of hidden possibilities for transformation than are the established forms of economics.

One message of the book is that we need not choose between accepting and rejecting globalization; we can have a different globalization. Traditional free trade doctrine rests on shaky empirical and theoretical ground. Unger takes a new approach to show when international trade is likely to be useful or harmful to the socially inclusive economic growth that every nation wants. Another message is that the movement of people and ideas is more important than the movement of things and money, and that freedom to change the institutions defining a market economy is just as important as freedom to exchange goods on the basis of those institutions.

Free Trade Reimagined ranges broadly within and outside economics. Presenting technical issues in plain language, it appeals to the general reader. It puts a disciplined imagination in the service of rebellion against the dictatorship of no alternatives that characterizes life and thought today.

Unger's intervention in this major contemporary debate serves as a point of departure for a proposal to rethink the basic ideas with which we explain economic activity. He suggests, by example as well as by theory, a way of understanding contemporary economies that is both more realistic and more revealing of hidden possibilities for transformation than are the established forms of economics.

One message of the book is that we need not choose between accepting and rejecting globalization; we can have a different globalization. Traditional free trade doctrine rests on shaky empirical and theoretical ground. Unger takes a new approach to show when international trade is likely to be useful or harmful to the socially inclusive economic growth that every nation wants. Another message is that the movement of people and ideas is more important than the movement of things and money, and that freedom to change the institutions defining a market economy is just as important as freedom to exchange goods on the basis of those institutions.

Free Trade Reimagined ranges broadly within and outside economics. Presenting technical issues in plain language, it appeals to the general reader. It puts a disciplined imagination in the service of rebellion against the dictatorship of no alternatives that characterizes life and thought today.

"Few minds are as fertile as Roberto Mangabeira Unger's. In this extraordinary book, Unger turns his attention to an area that is in much need of creative thinking and breathes some fresh air on the stale academic debates surrounding free trade."--Dani Rodrik, Harvard University, author of One Economics, Many Recipes

"Unger has written an incisive and compelling critique of free trade. The core of the argument-which seems to me historically incontrovertible--is that a nation's comparative advantage is always constructed by collaboration between public authorities and private interests. The essay hammers this point home with the relentless brilliance for which the author is known. A clear and worthy challenge both to those who are sure the doctrine of free trade is right and those who are confident that is fundamentally flawed."--Charles Sabel, Columbia Law School

"This book aims to provide a critical assessment of the present theoretical and practical consensus in favor of the orthodox conception of free trade and to outline the elements of a realizable alternative. Unger reveals a remarkable breadth of understanding of the field, boring into it with his inimitable and potent vision. This is a book of enormous intellectual and worldly interest."--Sanjay Reddy, Columbia University

"As one would expect from Unger, the book is brilliantly written and his central theses are persuasively and passionately argued. It is readily accessible and will command a wide audience and generate significant and constructive public debate and controversy."--Michael Trebilcock, University of Toronto

Themes and Scope of this Book 1

Chapter 1 7

Troubles: The Enigmas of Free Trade Familiar Problems, Disturbing Solutions 7

The History of Free Trade and Protection: Subversive Lessons 15

The Authority of Free Trade Doctrine: Reasons Amounting to Objections 20

Chapter 2 25

Troubles: The Incompleteness of Comparative Advantage The Doctrine of Comparative Advantage 25

Incompleteness: Indeterminacy Resulting from Failure to Justify Unique Assignments of Comparative Advantage 28

Incompleteness: Confusion Resulting from Uncertainty about the Limits of Our Power Collectively to Shape Comparative Advantage 36

Incompleteness: Embarrassment Resulting from the Assumption that the World Is Divided into Sovereign States 44

Beyond Incompleteness: The Sham Similarity between Postmarginalist Economics and Physics 51

Condemned to Eternal Infancy: Implications of the Method Inaugurated by Marginalism 56

A Note Relating Ideas in this Book to the Dominant Tradition of Thinking about Comparative Advantage 65

Chapter 3 77

Ideas

In Search of a Point of View 77

Specialization and Discovery:When Competition Inhibits Self-Transformation 78

Politics over Economics:When Restraints on Trade Imply No Surrender to Special Interests or Costly Dogmas 81

Order and Revision:When Free Trade Strengthens the Capacity for Self-Transformation 87

Alternative Free Trade, Alternative Globalizations: The Market Liberated from the Doctrine of the Market 90

The Division of Labor Reimagined and Remade: From the Pin Factory to the Factory of Innovation 95

A Central Conception:Mind against Context 100

Chapter 4 110

Theses

Nature of These Theses 110

The Thesis of Relative Advantage 110

The Thesis of Politics over Economics 138

The Thesis of Self-Revision 150

Chapter 5 166

Proposals

From an Analysis to a Program 166

The World Trade Regime and Its Reconstruction 167

Free Trade Reformed: The Reconciliation of Alternatives 179

Free Trade Reformed: Experimenting with the Form of the Market Economy 185

Free Trade Reformed: Free Movement of Things and Money Chastened, Free Movement of People and Ideas Enhanced 193

Free Trade Reformed: From Wage Slavery to Free Labor 198

The Troubles of Free Trade and the Possibilities of Economics 213

Name Index 223

Subject Index 225