Power, as well as price, matters in a well-run economy

That's the lesson to take from both the founding of the Bretton Woods system 80 years ago and the Biden administration today.

- Rana Foroohar

Mr Joe Biden may be a one-term president, but his administration has changed the global political economy in ways that will continue to resonate long after he is gone. In particular, his trade policy put an end to the era of laissez-faire globalisation, which tended to favour the unfettered interests of the largest corporations and state actors, and ushered in a post-neoliberal era in which labour, natural resources and the market-distorting effects of concentrated power are once again major concerns for policymakers.

Critics like to portray this shift as some kind of wacky, woke deviation from economic norms. It is certainly a change from the trickle-down, market-knows-best approach of the last half century. But the Biden stance actually takes the US back to the first principles of the post-World War II period during which the Bretton Woods institutions were established. Back then, US leaders tried, and only partially succeeded, in crafting a post-colonial, worker-centred approach to trade, one that looks a lot like what the Biden White House has tried quite rightly to resuscitate.

Consider the original 1945 State Department proposals on world trade and employment. They argued against government restrictions on trade, but also recognised the power of private actors to distort the system, as well as the need for states to guarantee regularity in the production of critical goods and secure employment at home.