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Unformatted text preview: Rodrik doubts that the market has a magic effect and that capitalism invariably brings benefits. However, he is not anti-capitalist – markets are necessary and can bring benefits, but what he is primarily concerned about is the potential tension that exists between the system process level and the domestic level. The demands of economic integration, and the liberalization of markets, often comes at the price of social cohesion and particularly social safety nets. Government intervention in the economy has traditionally been the way that the state has bought social cohesion and social peace in the face of economic crisis – most European states, for example, did not develop within a free-market context – they pursued mercantilist policies that protected labor and domestic industries. In fact, they continue to do so today. States must therefore balance their integration in the world economy with the potential social costs domestically. When politicians sell austerity and cuts to social programs as the price of economic development and...
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This note was uploaded on 11/25/2011 for the course POLISCI 1003 taught by Professor Olson during the Fall '11 term at GWU.
- Fall '11