Globalization, round two: Will it be a new beginning or an end?

Okay, I tried a loaded question for round one , and basically got put in my place. So I’m going to try to be much more precise this time and much less convoluted.

I want to see what people think about the possibilities of globalization. Do people think that, despite it’s fixable yet horrible bad sides (sweatshops, environmental abuse, corruption, bad management), can the good aspects overwhelm/fix the bad.

These good aspects, I would say, are:

  • The internet. Though not all of the world, or even a majority, is yet connected to the internet, the proliferation of ideas and voices is already significantly higher and more easily accessable than any other time in history. Though not everyone has his or her voice, there are people fighting for them to have a voice who are very visible and very easy to consult (amnesty international, human rights watch, reporters sans frontiers, etc.).

I also would reference the effect that people’s accessibility to varied information, despite repressive governments, is robbing government’s ability to repress people (recent protests in China , Syria, and the youth in Iran ).

One person mentioned, “Sure, this is true, but people can also more easily find the news they want to hear.” Hasn’t that always been the case though? It seems like people have always been able to read only the viewpoints they wanted to, though now there is a much greater access to various points of view for those who want a more contrapuntal view of the news they get.

  • The mounting number of people who are cognizant of the fact that failed states are hotbeds for terrorism, coupled with the knowledge that the “lift all boats” method of the nineties is not a viable method if the smaller boats are full of holes. (see, Amartya Sen, Joseph Stiglitz, Jeffrey Sachs, Mike Scheuer)

  • The growing sentiment that doing business in a corrupt, repressed, unstable country is not good for business (Oil companies in Sudan and Nigeria, for example), because the money lost in fixing problems or having shut down supply lines don’t counterbalance the cheap labor profitability (see Schulz, In Our Own Best Interest)

  • Jared Diamond’s ideas on the relation between bussiness and the environment in Collapse, which, if I remember correctly, was similar to above: the costs losing resources because of pollution is not worth the money lost. (if someone has the book or has read it, and knows what I’m talking about, could you help me a bit on that one. I no longer have the book)

  • A flatter world (T. Friedman, obviously). This idea of globalization isn’t “good” so to speak for people in the West, but I think it’s good for the world. Also, I realize that Friedman’s characterization is kind of flowery view of a flat world at times, but just keep in mind that I’m not saying that I think everything’s alright in the places he talks about (for that, just look at Human Rights Watch or Amnesty International). That said, I believe for the most part the world is getting “flat” and that that, by and large, will be a good thing.

For instance, I think the working conditions in most places are horrible, but most of the people who work in these areas would do anything to keep these jobs. Because they have these jobs, they will be better off, and their kids will be better off, and they will in turn help the economy, and so on. Am I wrong? I see trying to make the conditions better as a crucial argument, but not at the expense of saying off-shoring is bad because of the conditions (that argument would probably be Bhagwati’s). Also, I’m aware that that’s an over-simplification. I want to be clear that I think that these are horrible, and I do what I can to both make people aware of these conditions and to make them better. I just think that, in general, the off-shoring of jobs is a good thing.

  • In contrast to the higher media saturation in the world and faster transmission of images from all parts of the world, some studies show that the wars of the world are actually diminishing. I don’t mean to insinuate that the wars that are still going on are any less significant, or that they will forever diminish. However, like Keynes and Smith said, globalization should be the end of wars, because it will be against the interests of a country to start a war if all countries are linked together. It is important to say also, that this comes also with the assumption that, right now, we are not globalized. We are becoming more and more globalized, but right now it still amounts to developed countries taking advantage of less developed countries, though many developed countries are in Asia and Eastern Europe are changing that. I’m thinking that the more globalized we get, the less possibilty for war there will be.

  • (The kicker, this is the one that got me in trouble on the last one) This is completely from personal experiance…*It seems to me *that a lot of people are starting to see that the cultures of the world, though they are different, the people who come from them are not that different. It seems to me that whether I’m spending time with Chinese, Iranian, Brazilian, etc. people we don’t have a problem because we are first people, not citizens of a certain nation or a member of a certain culture. Yes, our interaction is on an individual level and it doesn’t change national policy (ostensibly), but individuals who go home and say, “Hey, they’re not that different,” do have a significant effect, I think. Now, more than ever people are able to travel and live in other places far away, that is very important I think.

I realize that some of this might sound idealistic, but that’s why I ask. I’m not that intelligent, but that’s what the SD is for. I’m just trying to present much of what I’ve read and seen myself and see what other people think.

So, what say you? Is there reason to be optomistic (or as Jared Diamond said, “cautiously optomistic”), or are things going to remain unequal and unbalanced? Am I missing something big?

I am a child of the 80s, but I hope that I’m not repeating the same empty optomism that many people say characterized the eighties as far as foreign relations goes.

I don’t see a bright side. Period.

Could you elaborate?

Is there something I wrote that you take issue with?

The global economic pie is growing, the issue is that the global economic pie is also shifting to countries such as China. You’re going to see a major clash over the next few years because China has been a net exporter on a global scale.

Globalization has done a tremendous amount of good in terms of raising the standard of living and individual freedoms in countries such as China. The price paid is that a lot of lower end manufacturing jobs have been exported away from the US and to countries like China. Those US workers then get double whammied because alternate jobs tend to be a cashier at WalMart.

Globalization has been happening for hundreds of years. It’s inevitable. Either go with it or get crushed by it. There’s no reason it won’t work out well for most people. Those “sweatshop” jobs are how countries kick start their ecomomies and become inustrialized. We’ve seen it all over Asia. Working conditions improve as people get more money, and become more educated. Besides, the alterative to those “sweatshop” jobs is more often than not no job at all, or back-breaking agricultural work.

No, that’s only true if you’re unwilling to improve your skills or take some risk and start your own business. I suppose if a person’s attitude is “hey, someone needs to give me a job”, then your conclusion is correct. However, I can’t muster much sympathy for that type of mindset.

I see this a lot. But it leads me to wonder about the following:

Not everybody is capable (either financially or otherwise) of improving their skillset. Nor might they have the resources to start their own business.

My question (and I do appreciate that this is something of a hijack) is this; what becomes of those who, for whatever reason, are truly incapable of improving their skills or starting a business?

Are they doomed to be forever at the bottom of the heap? Cashiers or cleaners at Walmart?

The post by Nocturne was actually written by me. I forgot to log her out.

Sorry

Someone needs to do the job. For someone to be at the top of the heap, there needs to be someone at the bottom. There’s a great phrase from the book Fluxx which I can’t quite recall, but it’s something like, “I may not like my position in the social order, but I recognise the necessity of its existence.”

I understand what you mean here. But it seems we then throw people like this to an existence that is rather Hobbesian in scope - nasty, brutish (try trying to live on minimum wage foreverr, let alone try to raise a family) and often short (how much quality medical care do you think they are going to get). Condemned to live in poverty through no fault of their own.

I think I might spin this off into a GD of its own rather than disrupt this one any further

I question the premise that there are significant numbers of people who are incapable of improving their skill sets. Sure, there are mentally retarded adults or severely physically handicapped who simply haven’t the brainpower to compete in the marketplace. But I don’t think that’s what you mean, do you? How many non-retarded folks do you know who are literally incapable of improving their skills? I don’t know any.

As for the resources to start your own business… depends on the business.

The ‘bottom of the ladder’ in the U.S. is not nasty, brutish, and short. In fact, it’s significantly better than the world average standard of living. Furthermore, there is significant mobility at the bottom, with people routinely moving up the ladder while others move down. The old class warfare rhetoric, which assumes that the people at the bottom are there permanently just isn’t applicable in a modern free economy.

That’s why globalization is important to these other countries. Factories don’t just increase the standard of living, they increase freedom. They provide the means by which people can improve themselves and move out of despondency. Because as long as the poor in a country are dependent on either handouts or eaking a living off of a tiny plot of land for subsistence, they have absolutely no hope of changing their condition. But factories change that. People make more money, and have the ability to gain skills and experience. But more to the point, the mere existence of the factory implies a lot of investment in the infrastructure, which helps make the country more productive, which lifts up everyone over time.

It’s a lot better to be poor in South Korea today then it was to be of average wealth in South Korea 50 yers ago.

As for Globalization in general, it’s inevitable. And it’s a good thing. Will it hurt those of us in the west? Not necessarily. This isn’t a zero-sum game. As the world as a whole becomes wealthier, we all benefit. Look at the auto industry. The new challenges from Korean makers have driven up quality and driven down prices across the board. Koreans making cars, ships, and computers and much more valuable to the world than are Koreans subsistence farming and living in shacks. Sure, they are competitors, but there’s nothing wrong with competition.

Some anti-globalization people think that globalization will drive down American wages. They are operating on the mistaken assumption that Americans make the wages they do because they are protected from the alternatives. But in fact, Americans make the wages they do because they are productive enough to earn them, and that will not change. Or at least, it won’t change because of globalization.

And there is a growing opposition amongst the very nation who will allegedly “benefit” from Globalization, on the grounds that they do not benefit.

The CEOs benefit.

Their income has become amazing. It just doesn’t do anything good for anybody else, that’s all.

And there were factories in the Soviet Union, in Mussolini’s Italy, in Hitler’s Germany. Were they free? :dubious:

Factories & economic systems aren’t a guarantee of freedom, honest & responsible government is.

You are still thinking in Cold War terms.

How are you defining “productivity”? If I work in a factory and I still produce 50 widgets a day, just like I did last year, but Chinese competition has depressed the market value of widgets, am I still as “productive”? If so, my productivity is not likely to be rewarded to the same extent it was before; I might have to take a pay cut.

By most measurements, Americans are the most productive people on earth. Sure, an individual’s productivity numbers are dependent on the market for the particular widget they product, but the U.S. worker on average, across all widgets (I love that word) is remarkably productive.

Why? Free, open society, stable government, law and order, infrastucture, etc. The country is free and has invested in itself.

So, your “productivity” as a worker depends mostly on factors over which you, as an individual, have no control?

Can you provide a cite as to your last sentence? Because I don’t believe you. Rich people don’t just stick their money in a vault; they invest it, providing jobs for more people. They spend their money. They employ people. Economies don’t work on money; they work on the flow and use of money. Sure they hope to make a profit on it - what’s wrong with that? But if they make a profit, they’ll use that profit to try and make more money, repeating the cycle.

You are mistaking average productivity with the productivity of any given individual. But yes, just being born in the US makes you more productive that if you were born in say, Vietnam. Even if you had identical factories in each country, the infrastructure in the US is better than in Vietnam. OTOH, you can make yourself more productive than your neighbor by increasing your skills. The key, though, in relation to this discussion is that there is a floor below which you can’t fall thru (unless you simply refuse to work) in the US which is higher than the floor you would have in a less developed country.

Even if my Vietnamese counterpart has the same daily widget output as I do? (Or are you saying that, if he works just as hard as I do, he still won’t be able to produce as many widgets, because his factory can’t get enough of the materials, or something?)

That’s correct, sort of. Of course, you can choose to sit on your ass and be completely non-productive until someone fires you, so let’s assume that you’re doing your best, trying to be as productive as you can.

Now ask yourself - how productive could you be making shoes if your job is to be one of the handful of workers on a shoe assembly line that puts out 10,000 shoes a day? Now compare that to an equally hard working person who is given a leather punch, some scissors and thread, and a pile of leather and cloth, and told to make shoes. Who is more productive?

American workers are productive because of the immense amount of resources that are poured into the industry in which they work, and because of the money poured into the roads, trucks, shipping companies, distribution networks, repair centers, and other infrastructure bits that help get their products to consumers inexpensively and raise the value of their products. Auto workers make the money they do not because of unions, but because each worker typically has hundreds of thousands of dollars of capital investment poured into machines and an infrastructure that allows him to leverage his labor dramatically. If cars were made by hand, with frames being hammered out and welded by people, seats sewn by seamstresses, etc., they would either cost so much that no one could afford them (and therefore those jobs would not exist), or we’d have to pay those people pennies per hour to make cars affordable. They could unionize all they want, but the only choice the union would have would be to allow their workers to be paid pennies or have no job at all.

Henry Ford paid his factory workers enough so that they could buy their own Model T’s. That was one of his goals. He achieved it not through legislation or being a nice guy, but by implementing the modern assembly line and making his workers productive enough that he could afford to pay them what he did.

In addition, a modern worker’s productivity, when measured by how much material they can produce and actually get into the hands of the consumers, is improved by things like lean manufacturing, ‘just in time’ inventory that reduces wastage and prevents productive capital from being tied up in static inventories of goods.

Productivity has increased dramatically in the last decade not because people are working harder - they aren’t. Productivity has increased because assembly lines are more flexible, have less downtime, and make parts of higher quality with lower rejection rates and with better fit-and-finish leading to more durable goods. Flexible assembly lines mean modern factories can change their output based on real-world demand - the same assembly line that builds a Ford Fusion can also build a Mazda 6, eliminating duplication and maximizing productive capacity.

This is the story throughout the modern world. This is why modern workers get paid so much. Their labor is greatly magnified by the capital investment and infrastructure they work in.

In the third world, productivity is low because the factories are sub-standard, the electrical grids unreliable, the roads and shipping facilities are poorer, and political instability often prevents the kind of capital investment needed to raise standards of living.

This is what the anti-sweatshop protestors refuse to understand, and what the conservative anti-globalization types also fail to understand. The left sees these sweatshops and believes that there is no reason why, with a little prodding, these workers can’t be paid what everyone else gets paid. The right sees these low income workers as threats to American high-paying jobs. Both beliefs are the result of the same fallacy - that the only difference between 1st world workers and 3rd world workers is that the 1st world workers have government protection and artificially high wages.

The fact is, 3rd world labor is cheap because the productivity level of the 3rd world demands it. As investment accumulates in these countries, productivity will climb, and wages along with it. For example, the per-capita income in South Korea in the 1950’s was equal to other poor countries in the 3rd world. Then investment flooded in, and South Korea became the ‘sweatshop capital of the world’. Everyone knew that ‘Made in Korea’ meant cheaper, lower quality goods as opposed to ‘made in Japan’, and that the stuff was probably made by someone in a sweatshop earning 20 cents an hour.

Today, South Korea has a 1st world standard of living. It’s the largest ship manufacturer in the world. Their cars are now world class, and its per-capita income is the same as the European average. South Koreans never became a threat to provide labor 10X cheaper than Americans, because as soon as they became as good as Americans at making something, they got paid the same.