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Mason professor explains the backlash against international trade

July 30, 2018

Maurice Kugler

The growing backlash against international trade can be seen in the United States and around the world, a George Mason University professor said, and that is a red flag.

“If the retrenchment is permanent, there can be substantial decline in well-being around the globe because the economy will operate below its potential,” said Maurice Kugler, a professor of public policy in Mason’s Schar School of Policy and Government and a former senior economist at the World Bank. “Even if it is a temporary retrenchment, it can lead to a substantial slowdown in economic activity, which can have persistent consequences and reverberate across many countries.”

The problem, Kugler said, is that the economic gains of globalization have mostly gone to corporations and skilled workers. Unskilled workers have been left behind.

“We’re at a point where politicians who want to revert a lot of the tendencies of economic integrations have a lot of support from large segments of the population because they blame unfair competition for the problems they are facing,” Kugler said.

That sometimes leads to the imposition of tariffs, as has been done by the United States, something Kugler said is counterproductive as it spurs retaliatory measures.

“The question is: ‘What is the best response?’ You have to make sure that a lot of the gains of globalization in the form of higher profits for firms are also invested in people,” said Kugler, who has done extensive research and whose work about the impact of economic policies on the growth of the global economies and labor markets has been widely published.

“The way to go, in my opinion, would be to have government programs that promote and support the possibility for entrepreneurs, workers and firms to be competitive in the world economy. That implies continued support of research and development as well as the accumulation of human capital through skill upgrading.”

Maurice Kugler can be reached at 703-993-3804 or mkugler@gmu.edu.

For more information, contact Damian Cristodero at 703-993-9118 or dcristod@gmu.edu.

About George Mason

George Mason University is Virginia’s largest public research university. Located near Washington, D.C., Mason enrolls more than 36,000 students from 130 countries and all 50 states and Washington, D.C. Mason has grown rapidly over the past half-century and is recognized for its innovation and entrepreneurship, remarkable diversity and commitment to accessibility.