In Defense Of Globalization With A New Afterword

Understanding the Book and Where to Find It

In Defense of Globalization With A New Afterword is a revised edition of Romesh H. Rangarajan's earlier work on the economics of open trade and investment. The core text argues that globalization has been net positive for developing economies, and the new afterword addresses criticisms and events that came after the original publication. If you are looking to read it, you can find it on Amazon, Google Books, and various used book markets. The original edition came out around 2005, and the updated version includes the additional afterword material. The book makes a straightforward case: opening economies to global trade and capital flows tends to raise growth rates, especially for countries that were previously closed off. Rangarajan draws on India's own liberalization experience as a primary example. He acknowledges problems — inequality, financial volatility, job displacement — but argues these are manageable with the right domestic policy response rather than reasons to reverse course on openness. The afterword updates the argument for events after the original publication, touching on the 2008 financial crisis and its implications. His position doesn't shift much: the crisis was not primarily caused by globalization in the sense he discusses, and retreat from openness would not have prevented it.

Key Arguments That Hold Up

There are a few points that are worth taking seriously, even if you disagree with the overall thesis. Trade and growth correlation is real. Countries that moved from closed to open economies in the 1980s and 1990s generally saw faster per capita income growth. This is not a trivial observation. The East Asian tigers, China post-1978, and India post-1991 all fit the pattern, though each had significant differences in implementation. Capital account liberalization deserves more nuance than usually gets. Rangarajan doesn't simply argue for full capital account convertibility overnight. He distinguishes between trade in goods and services, which is relatively safe to open, and financial capital flows, which require stronger institutional foundations. This is a distinction many casual debaters skip over entirely.

The inequality argument is miscalibrated by opponents. Globalization does increase inequality within countries in the short to medium run. That is accurate. But the counterargument that closing off would reduce inequality is wrong. Closed economies tend to entrench existing hierarchies. The question is how to distribute the gains, not whether to take them.

Where the Argument Falls Short

I want to be direct about the limitations because this is where most reviews of the book skip to their own agenda. The afterword is thin. It addresses the 2008 crisis but does not engage substantively with the decades of research that followed on financial crises, currency contagion, and the role of speculative capital flows. If you are reading this for a current understanding of globalization's risks, you will need to supplement it with work by Stiglitz, Reinhart and Rogoff, and others who have analyzed crises more thoroughly since 2005. The book also underestimates how globalization reshapes domestic politics in ways that make the policy responses it recommends politically impossible in many democracies. Trade adjustment assistance programs fail not because they are bad ideas in theory but because political conditions rarely allow them to be funded at the scale they would need. This is not a criticism of the economics. It is a criticism of the political economy.

There is also a selection bias in the case studies. The book focuses on successful liberalizers. It gives far less attention to countries where premature opening led to deindustrialization without productive alternatives, or where commodity dependence made the benefits of trade highly volatile.

How to Read This Book Practically

If you are using this for research or to form an informed position, here is how I would approach it. Read the core chapters first. The afterword can wait. The main argument is self-contained. The afterword adds a few pages of response to critics but does not change the fundamental framework. Pair it with something critical. Joseph Stiglitz's Globalization and Its Discontents is the obvious companion read. It directly challenges Rangarajan on the role of international institutions and the sequencing of reforms. Reading both will give you a much clearer picture than either alone.

Pay attention to the India case. The book draws heavily on India's experience, and that is where the evidence is strongest. If you are applying these arguments to a different country, the India experience may not transfer cleanly. Institutional capacity, scale of economy, and geopolitical position matter a lot.

What to Take Away

The book is a competent defense of economic openness written by someone who was inside the policy process. It is not a definitive statement on globalization, and the afterword does not update the argument enough for current conditions. But the core economic case — that openness raises living standards when paired with strong domestic institutions — is still defensible. The useful takeaway is not the conclusion but the framing: the debate is not whether to globalize or not, but how to manage the transition and mitigate the losses. That is a harder question than the book fully answers, and it is one the field is still working through.