Eswar Prasad

So I thought, you know, let's wait for the elections and maybe rethink some part of the book.

But of course, everything that has happened since November 2024 has sort of validated the thesis of the book.

And that's brought us to this pass where, as you pointed out, you know, one of the themes of the book has sort of validated by everything that has happened, including in the lead up to and what happened at Davos, which is that instability has become the norm in the world order.

And of course, globalization is only one of the forces I talk about, but there is a sense that while globalization worked very well at the aggregate level, it certainly pulled millions of people out of poverty in countries like China and India.

It helped those countries and many other emerging market economies rise to middle-income status.

But within countries, especially in countries like the U.S.,

The benefits were not evenly distributed, and it created this very disaffected class.

Now, that part of the story is sort of well-known, but what is interesting is that that, in my view, has created this negative feedback loop where populist politicians or false populists, as I refer to them in my book, can start vilifying the other as the cause of displacement of workers from jobs and so on.

And what do I mean by the other?

It could be whatever the politician feels gets traction in the voters' mind.

The other could be the political and economic elites.

It could be China.

It could be immigrants.

And why do these have so much traction, these attempts to pull in the politics of resentment, which is a phrase I use in the book?

You know, the notion that the benefits of something like globalization

go to the political and economic elites is certainly very prevalent.

But what is interesting is that there is this additional layer that people who feel left out feel they're also left out of opportunity and that political and economic elites can basically capture the political system so that it works even more in their favor.

If you look at regulatory policy in the U.S., tax policies, that basically means that those who are benefiting from globalization

get even more of the spoils, while those who are left out feel they don't even have an opportunity to clamber up the economic ladder once again.

So in that sense, globalization affects domestic politics.