Larry Summers: There's nothing wrong with economic nationalism

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Summers on the hunt for alternatives

Former US Treasury Secretary Larry Summers wrote in the FT yesterday and touched on a few key points that are frustrating voters.

This is a great line: "The willingness of people to be intimidated by experts into supporting cosmopolitan outcomes appears for the moment to have been exhausted."

He notes that the touted benefits of NAFTA and China's ascension to the WTO haven't materialized.

The core of the problem, he says, is that governments are misguided.

"A new approach has to start from the idea that the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global good," he writes .

He uses some good examples to show that cooperation can work (for things like cracking down on tax evasion) but that setting international rules where democracies can't do what they think is needed, or right, is folly.

"If Italy's banking system is badly undercapitalised and the country's democratically elected government wants to use taxpayer money to recapitalise it, why should some international agreement prevent it from doing so?"

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Forex

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