And how will countries fare in the Fourth Globalization? Ever since the days of David Ricardo, two centuries ago, economists have taught that countries should specialize in those activities they perform most efficiently and import the rest. But “comparative advantage,” already suspect because of the role of subsidies in influencing the pattern of trade in goods, is all but meaningless in the digital age, as it becomes steadily more challenging to figure out how much of a product’s value was added in one place and how much in another. The balance of trade, then, has become a useless measure for tracking winners and losers, an idea whose time has come and gone. A country’s success in the Fourth Globalization will depend not on whether the statisticians compute a surplus or a deficit, but on whether its citizens’ living standards rise as they navigate a fast-changing world economy—and whether it ensures that the benefits of a globalized world are shared widely among its citizens.
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