top of page

Pop Internationalism, Paul Krugman 1996

Pop Internationalism is a book written by Paul Krugman, an American economist, to sweep away the clichés about globalization, what he calls "pop culture". Pop Internationalism was written to be understood not only by the most experienced economists but also by the general public.

Pop Internationalism, Paul Krugman 1996

In Pop Internationalism, "pop" means "popular" and designates a dominant ideology in society. For Krugman, this "pop culture" denounces globalization as the scourge of the 20th century due to relocations, leading to growing unemployment, especially since the crisis that began in July 2007. In Pop Internalism, Paul Krugman criticises the arguments against globalization.

The first argument used by pop culture against globalization is that globalization increases unemployment because it forces nations to open up to foreign competition in terms of labor productivity. Krugman replies that this reasoning is wrong as the branches of activity are not the same from one country to another.

He adds that the American State uses globalization as a culprit, while the real culprit is a deep dysfunction of the American market. Krugman denounces the profitable strategy of increasingly flexible MNCs, which consists of creating atypical jobs, fixed-term contracts and no stable situation for workers.

For him, it is tertiarisation that penalizes the American industry by substituting capital for labor. The tertiary jobs democratized in the US, such as local services, are more precarious and less stable than industrial jobs because workers are not active all day. This form of "all service" consumption is detrimental to employment, especially for women.

De-industrialisation is not the result of globalization but of a lack of competitiveness and a lack of adaptation to emerging countries that are gradually taking market shares and changing their specialization as a result of upward mobility. Those who had dictated the laws of the market are now disappearing because the unequal exchange is reversed: they now complain that they are victims of globalization.

For example, while the United States needed highly qualified employees because of the increased demands for more complex services and goods of a better quality, there were few of them. Krugman believes that this is due to the inefficiency of the school system, which leads to young people dropping out of school.

He argues that globalization is, on the contrary, beneficial to the United States, apart from a social consideration. Indeed, it is a zero-sum game, an unequal exchange, in which the United States is certainly not a loser. The US deficit is virtuous, as it creates a domestic dynamism that stimulates the need for imports. Since the dollar is the most widely used currency in the world, the US does not need to support it. Moreover, it receives savings from China (a country with a large surplus), which compensates for this deficit. Thus, the author argues that the United States benefits from globalization because globalization finances its deficit, thus allowing the United States to live beyond its means.

For Krugman, political views on international trade are the result of fashion, not of thorough economic analysis. Today, the dominant paradigm is that of free trade, since its triumph in the 1980s, which the author calls the "Washington doctrine". The dominant equation today seems to be: free markets + sound money = economic prosperity.

Developing countries approach globalization differently. The successful countries benefit from rapid growth through the production of manufactured goods for export (e.g. China). The disasters are poor countries that continue to get poorer. Krugman even questions the label "developing" used to qualify these countries (eg. African countries).

Some countries have improved significantly since the 1980s thanks to economic reforms advocating trade liberalization and rapid growth, attracting foreign investment flows because this liberalization reassures investors. (e.g. Chile, Argentina, Mexico). The author denounces protectionism as a threat to developing countries, as it would reinforce the tripolarisation of the world.

bottom of page