How will Globalization affect my standard of living?

…Which also happened to the Acme Buggy Whip Company, Honest Abe’s Conestoga Wagon Sales, and the RCA Victor television manufacturing plants.

The question is, “Is protecting those jobs from competition a good thing?” Would we be better off if Congress had passed the “Buggy Whip Manufacturer’s Full Employment Act of 1903”? Would we be better off if we had closed the borders to Japanese electronics to protect the domestic electronics manufacturing industry?

These arent’ far-fetched notions - there were debates over doing exactly that back in the day. For the same reasons being espoused by anti-globalization types today.

No one is saying there won’t be local disruptions and people who lose their careers and have to start over. That has been the case since capitalism first started. One of the primary benefits of capitalism is its dynamism, its ability to move resources where they do the most good. Job destruction and job creation are two sides of the same coin.

The problem is that people aren’t (and shouldn’t be treated as) “resources,” and don’t have the flexibility that a palette of plastic parts does in this day and age.

When Ace Buggy-Whip Makers went out of business, the former employees could go across town and work at Best Brake Liners or whatever. When your high-tech jobs gets shuttered in Illinois because someone in Singapore can do it for one-fifth of your salary, moving yourself and your family to Singapore is not a viable option.

Saying things will improve as a whole is just whistling past the graveyards of the people and families and lives broken in the process.

Your statement would be good news in 1920. But it’s irrelevant and wrong for todays workers.
When the 42-year-old carriage-makers and buggy whip makers lost their jobs, they just walked across the street to the new Ford factory and made Model T’s—using the same job skills they had before (unskilled labor was all you needed). They had good job security, and even earned higher pay than their previous job.

oops–rjung beat me to it. and more eloquently, too.


Human beings, being human beings, are naturally more inflexible than corporations. To me, the prospect of packing up and moving to India to build drivers for Debian servers or something is a life changing, no-going back proposition that would have a massive impact on me, my wife, and everybody else around me.

For a corporation, the prospect of packing a factory off to Malaysia comes down to a simple cost/benefit analysis.

Corporations not only have the financial resources to stack the deck, but the political influence to create laws and regulations that are beneficial to their interests - not the interests of the consumer, worker, or citizen. They’re not in business to create some utopian, hand-holding paradise of contented global capitalism and high standards of living; they’re in business to extract as much capital as possible from their markets, full stop.

Globalization will ultimately be to the detriment of everybody but the rich until two conditions are met:

First, that national economies individually develop to the point that they are internally self-sustaining. Economies that are dependant on transnational or foreign owned capital (the Chinese joint partnerships come to mind) are ultimately at the mercy of the whims of that capital. It’s not a truly free market if some CEO is holding a metaphorical gun to the head of your finance minister.

Second, that governments do away with all barriers to an individual’s ability to freely participate in the global marketplace. This means things like universal education, health care, and removing any and all restrictions to world-wide immigration.

Until individuals have equivalent resources to leverage their power in the market as coporations and the wealthy, the “rising tides” platitudes of globilization proponents are nothing more than starry-eyed hot air that put the rants of the most vehement campus Marxists to shame.

And what did the tens of millions of farm workers do when the employment industry for farm workers collapsed entirely?

What did the workers at the RCA Victor television plants do when TV and electronics assembly jobs left the country permanently?

It’s a glib response to say, “Before, there were always new industries almost exactly like the old ones”. In a lot of cases, there weren’t. I’d venture to say the majority of cases. How about the coal mining industry? The collapse of coal mining industry caused entire mining towns to become ghost towns. Those people didn’t just move across the street - entire towns were boarded up, and the people had to move elsewhere, go back to school, retrain, and find work elsewhere.

Does that suck for the individual? Absolutely. Is this an argument against globalization? Absolutely not.

Thank you, Donald Rumsfeld.

I forgot to add that the buddy whip example is a fallacy.

It’s not that the buggy whip manufacturers discovered that they could start paying kids in Mexico half as much; it’s that the buggy whip became obsolete because of the automobile. Technological change is inevitable, and people have to adapt to it.

T-shirts, however, have not suddenly become obsolete because of some startling new breakthrough in garment science. The manufacturers (or disributors, or retailers, or somebody) figured that they could turn a bigger profit by paying offshore workers a fraction of what they’d pay Americans.

If somebody could come up with an accurate pre-Globalization era analogy, I’d appreciate it. The first one that comes to my mind is the collapse of the Indian cotton industry thanks to American slavery. Hmmm…

That has little to nothing to do with globalization. I don’t have a cite handy, but the loss of farming jobs is mostly due to increased mechanization and industrialization, not global trade. The US still grows basically all of its own food.

They got shafted. This was a bad thing. And its still an ongoing phenomena:

Again, irrelevant to globalization. We’re not importing foriegn coal.

Unless you’re talking about the shift from coal to oil. And we all know how well that’s working out.

Anyway, most of those areas have never recovered. Have you been to Eastern Kentucky or WV lately? I have. Great scenery, friendly people, but I sure as hell wouldn’t want to live there.

I’ve got a chronic cough. It is a permanent thing.

I suspect this would be a deal-breaker, even though it ain’t TB, or anything else.

Is it a dealbreaker?

Other suggestions?

The Indian cotton industry didn’t collapse because of American slavery, it collapsed because of (relative) Indian inefficiency. When it is cheaper to grow the cotton in India, ship it to England, refine and produce goods from it, and then ship it back to India than it is to complete all those processes in India… suffice to say, that situation doesn’t have much to do with slavery in America. It would have happened with or without American slavery.

(ATTENTION, if you read the above as a pro-slavery argument, you are mistaken.)

Sound economic arguments for free markets and free trade can be articulated in this forum until the cows come home, and many here have done an admirable job in doing so. However, it appears that many people lack a basic understanding of economics that it would require to make such discussion meaningful.

Of course people are resources. Their labor produces goods and services. That does not also preclude them from being human beings, or any other designation you may feel more comfortable with. Business owners and other entrepreneurs are also resources, though in a different category. Considering them resources is merely a way of creating a more simple model for a complex system. A similar statement could be made about the term “consumer”. Yet people’s misconceptions typically give rise to a degree of apprehension upon hearing the term. Being a “consumer” doesn’t prevent a person from being all sorts of other things too, but those other things are distinctly less useful in determining, measuring and predicting certain economic realities.

If the denizens of the SDMB are serious about fighting ignorance, then they might do as I did. Take a good college economics course. When I started following an economics debate on the SDMB for the first time, it was easy to see where either side was coming from. I was pretty neutral. Arguments from Sam Stone, John Mace and others caused me to consider things in ways I hadn’t before. I don’t necessarily agree with them (or any one person) on everything, but I decided to learn more for myself and included both a sociology and an economics point of view.

What I learned is that there are indeed legitimate economic issues, but also a great deal of fear based on misconceptions, misunderstanding and even bias. Globalization is a term with so much baggage that it is difficult to think rationally about it. I honestly don’t intend to offend by saying “educate yourself”. I recommend it to my friends, and so far nobody has regretted taking my advice and doing so. :wink:

My OP is all about an individual.
It’s about me.
I’m not trying to get annoying, but I still don’t really know which way to jump.

And the variety of educational opportunities here in Tennessee are…limited.
A lot of educational institutions around here never really “got” the DotCom revolution, and I’m really skeptical about their vision of the future now. :frowning:

Whether an industry becomes more efficient because of automation or because of ‘outsourcing’ makes no difference. Steve Landesburg described this well with his ‘Iowa Car Crop’ analogy. It works like this:

First, let’s assume that we get rid of a whole bunch of auto jobs by building a new automated factory. Instead of X dollars going to workers to build cars, we have X-Y dollars going into maintenance of a factory. Raw materials go in one end, and finished cars come out the other. If the cost of the raw materials + the cost of the factory is less than the cost of the workers + the factory + the raw materials in the original manufacturing scheme, then our new process is more efficient, and wealth is created.

Now imagine that new factory is offshore, and runs on grain. So we pay Iowa farmers to make grain, and we pile it on barges and ship it to our new automated factory, and when the ship comes back, it’s loaded with cars. If the cost of making the grain + the cost of shipping it gets us a shipload of cars for less than what it would have cost to make them here, we benefit, and our wealth increases.

Now call that offshore automated factory “Japan”.

Since I “lack a basic understanding of economics” and all, I’m not sure I follow this.

  1. Cotton is grown and manufactured in India, and shipped to Britain.
  2. Britain begins to industrialize. It becomes cheaper to import raw cotton, and manufacture the textiles in Britian.
  3. India is one source of raw materials, but…
  4. America, with its vast supply of slave labor, it a cheaper one.
  5. Viola, no more Indian cotton industry.

I’m not arguing that industrialization had no effect on the manufacturing end. It’s the agricultural side of the collapse that’s directly attributable to slavery.

Then again, I’m all “uneducated” and such, so maybe I should just turn the rest of the thread over to Sam.

I understand, but you did phrase it as a question about Globalization. So the discussion has become more general.

To get back to the personal a bit - Since you’re thinking of becoming a programmer, I’d say that globalization is not about to destroy the American software industry. I’ve been involved in outsourced projects where we set up development teams in India, and I can tell you that the experiment has been at best a mixed success. Project managers underestimated the diffuculty of managing software teams spread around the world - just the time zone differences alone can be maddening, and a lot of our schedule slips were due to this. Then there’s the problems with communications - not just language, but cultural assumptions that make it difficult for everyone to be on the same page. Finally, as programming shops in India become better, the salaries of Indian programmers go up, lessening their advantage. Our company is hiring hundreds of programmers right now, in the U.S., Canada, and India. But mostly in the U.S. and Canada.

If you want to be a software developer, go for it.

I don’t understand this analogy :confused: The logical thing to do is to move the factory to Iowa in order to cut shipment costs.

And what happens when the grain industry is outsourced? What happens if every one of our current industries aside from those that can’t be outsourced like nursing and teaching (not to mention Walmart greeting and hamburger slinging) can be done cheaper by people overseas?

Okay, let me re-state it this way: A factory can be modelled as a black box. Raw materials go in one side, and finished goods out the other. Inside that factory could be a thousand American workers, or an automated assembly line. It makes no difference. If the assembly line can do the work cheaper than human labor, it makes sense to do it with the assembly line. That frees up the labor to work on things that it does better than making whatever it is it was making. That’s how wealth is created. It’s not a zero-sum game - by improving efficiency, we do more with less, allowing us to create more in the aggregate.

Now imagine that what goes on in our black-box factory is that the raw materials are shipped out the back entrance overseas, the finished goods come back, and they are sent out the front door. The equation doesn’t change. Raw materials go in one side, finished goods out the other.

So, at the end of the day, the factory owner ir richer (through automation) and people have lost their jobs?

I disagree. Automation, or, more generally, increasing technological efficiency, is and always will be a fact of life, barring some kind of global cataclysm that sets us back 5,000 years.

Anybody who protests against globalization in that context doesn’t know what they’re talking about. Yes, it’s a problem for people, but it’s not a new problem, and we’ve generally been able to keep up with it.

Globalization, as it is commonly understood, means that capital is (and, supposedly, labor) is no longer bound by the traditional barriers of national borders, laws, and economies. Your headquarters can be in Detroit, your tax address in the Bahamas, you mine your iron in Argentina(?), process it at a foundry in Japan, build the cars in Malaysia, and sell them back in Detroit.

Notice what’s missing in that equation? Revenue for the consumers and workers, either in the form of wages or taxes. Globalization proponents then wave their hands and say “Retrain! Learn new skills! Find a new market for your labor!”

Problem is, as globalization currently exists, capital has that market completely sewn up. Capital can bring power to bear on national economies that labor can never hope to achieve, given the current set of laws and circumstances at the ability to leverage inequalities in the standards of living among various countries.

If it were truly free market, and not just a free-for-all for capital, a laid-off textile worker in North Carolina would be able to pack up the car, drive to Mexico, and get his job back at the new factory. And have a similar standard of living. That’s just not possible with our current set of laws and regulations, to the benefit of capital.