https://www.project-syndicate.org/commentary/populist-economic-policies-easier-sell-than-liberal-orthodoxy-by-raghuram-rajan-2023-08?barrier=accesspaylog Skip to main content Access provided by Project Syndicate - Back to home Project Syndicate Logo * Newsletters * Subscribe * Log in * * Menu * Latest * Economics * Politics * Subscriber Exclusive * PS Quarterly * Columnists * Access provided by * Sustainability * Development * AI * Ukraine * Culture * Africa * Democracy * Crypto rajan84_Alex WongGetty Images_mmt Alex Wong/Getty Images enEnglish * fr French * de German * pt Portuguese * ru Russian Economics * * * * * 4 * The Populist Advantage Aug 18, 2023 Raghuram G. Rajan Since the 2008 global financial crisis discredited the old liberal orthodoxy, the door has been open for simplistic policies, in part because most people tend to focus only on a policy's first-order effects. Unfortunately, everyone will have to learn the hard way why such policies fell out of favor in the first place. CHICAGO - Even in the best of times, policymakers find it difficult to explain complex issues to the public. But when they have the public's trust, the ordinary citizen will say, "I know broadly what you are trying to do, so you don't need to explain every last detail to me." This was the case in many advanced economies before the global financial crisis, when there was a broad consensus on the direction of economic policy. While the United States placed greater emphasis on deregulation, openness, and expanding trade, the European Union was more concerned with market integration. In general, though, the liberal (in the classical British sense) orthodoxy prevailed. So pervasive was this consensus that one of my younger colleagues at the International Monetary Fund found it hard to get a good job in academia, despite holding a PhD from MIT's prestigious economics department, probably because her work showed that trade liberalization had slowed the rate of poverty reduction in rural India. While theoretical papers showing that freer trade could have such adverse effects were acceptable, studies that demonstrated the phenomenon empirically were met with skepticism. The global financial crisis shattered both the prevailing consensus and the public's trust. Clearly, the liberal orthodoxy had not worked for everyone in the US. Now-acceptable studies showed that middle-class manufacturing workers exposed to Chinese competition had been hit especially hard. "Obviously," the accusation went, "the policymaking elites, whose friends and family were in protected service jobs, benefited from cheap imported goods and could not be trusted on trade." In Europe, the free movement of goods, capital, services, and people within the single market were seen as serving the interests of the EU's unelected bureaucrats in Brussels more than anyone else. To continue reading, register now. Subscribe now for unlimited access to everything PS has to offer. Subscribe As a registered user, you can enjoy more PS content every month - for free. Register Already have an account? Log in General-Onsite_Digital_1333x1000 Subscribe to PS Digital Access every new PS commentary, our entire On Point suite of subscriber-exclusive content - including Longer Reads, Insider Interviews, Big Picture/Big Question, and Say More - and the full PS archive. Subscribe Now Raghuram G. Rajan Raghuram G. Rajan Writing for PS since 2003 84 Commentaries Follow Raghuram G. Rajan, former governor of the Reserve Bank of India, is Professor of Finance at the University of Chicago Booth School of Business and the author, most recently, of The Third Pillar: How Markets and the State Leave the Community Behind (Penguin, 2020). Cancel Close new comment has been posted. new comments have been posted. Refresh? Close 0 Comments on this paragraph, 4 in all 4 Comments on this article Before posting a comment, please confirm your account. To receive another confirmation email, please click here. * Durga Prasad Duvvuri Aug 21, 2023 This piece is like a synopsis of a larger paper that the Professor should write. Promising hypotheses, which could inform policy provided they are subjected to some analytical rigour in a peer reviewed paper! Reply A new reply to this comment has been posted. Load? * Edward Lane Aug 20, 2023 Show paragraph While there's much here I agree with, MMT does NOT advocate "printing" money. Please find this out for yourself. Reply A new reply to this comment has been posted. Load? * Robert Johnston Aug 20, 2023 Snake oil salesmen have always found a ready market. Reply + Viswanathan Suresh Aug 21, 2023 Donald Trump being one such successful salesman ! Reply A new reply to this comment has been posted. Load? A new reply to this comment has been posted. Load? Close New Comment * * * * * * Contact Us 4 * * * * Contact Us https://prosyn.org/biEWMq9 New Comment It appears that you have not yet updated your first and last name. If you would like to update your name, please do so here. [ ] Pin comment to this paragraph After posting your comment, you'll have a ten-minute window to make any edits. Please note that we moderate comments to ensure the conversation remains topically relevant. We appreciate well-informed comments and welcome your criticism and insight. Please be civil and avoid name-calling and ad hominem remarks. 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Further reading + Yanis Varoufakis Austerity Ruined Europe, and Now It's Back 9. The Populist Advantage rajan84_Alex WongGetty Images_mmt Alex Wong/Getty Images Economics 4 The Populist Advantage Raghuram G. Rajan explains why so many previously discredited economic policies have become easier to sell to the public. Further reading + Sebastian Edwards Modern Monetary Disasters Support Project Syndicate Subscribe Upgrade Donate Get our weekly newsletter [ ] [Sign up] Make your inbox smarter. 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