Over past decade it seems that globalization has resulted in a steadying decrease in the standard of living for the average American worker. Our lives are less stable. Our benefits are less secure. We are losing our manufacturing base and even our actual manufacturing facilities are being dismantled and sold for scrap.
What does this mean for us in the short and long term? Can we depend on continuing technological development and innovation to keep creating new sources of employment? Now that manufacturing has moved to India and China, won’t it soon be easier for Indian and Chinese elites to do the innovation than it is for us?
I’m not looking for a political dispute here. I want to know what the solid arguments are and who are the experts we can rely on. Has the economic crisis of the last couple of years changed any thinking on this issue?
Globalization is good for international corporations. It is bad for America. It is terrible for American workers. It is great for owners and executives.
It allows corporations to get cheap labor and escape environmental regulation. Part of the strength of America has been the huge market we represent. That is diminishing.
Short term it is bad.
Long term it will be devastating. America will have less financial power.less industry and manufacturing. We will have lower wages and less benefits.
We also will have less inventions. Most innovation is problem solving. If you are building a product you continually try to improve it and streamline its manufacture. China and India now have to deal with those problems.
This is true, but I think its a good argument for moving things like health insurance away from being provided by employers, rather then scrapping globalization. And indeed, the US has begun to do this with the recent UHC legislation.
This isn’t true. Manufacturing output in the US rose every year from 1987-2006, and I believe is now rising again after having fallen due to the recent Great Recession. Manufacturing job numbers have been shrinking, but that has more to do with increases in productivity then a shrinking of output.
Well, has globalization has advanced, unemployment in the US has stayed pretty low (again, ignoring the most recent economic unpleasantness). And you have to include in that that during that period a large number of woman were absorbed into the workforce. So at least in the past, a decrease in manufacturing jobs has been met with an increase in jobs elsewhere.
Do you have any reason to presume that technological capability has reached its peak or even begun the process towards plateauing?
Innovation is an issue of schooling. Indian and Chinese schooling will probably lead to people who are better at refinement than innovation. And of course, you can always hire away the leading names.
The economic crisis is a temporary issue brought on by poor financial practices which led people to withdraw all their money from the economy and sit on their thumbs, depressing everything to far lower than the situation merited. It has nothing to do with globalization nor does it have anything to do with the world nor the US being fundamentally past their good years.
I can only give my impression, but consumer prices and inflation do seem to go down due to globalization. So that is a short term benefit to us.
Long term, the economies of China & India will be as large as ours. Around 2050 the Chinese economy is supposed to be 70 trillion while the US & Indian economies will be tied at about 35 trillion according to Goldman Sachs. Vietnam’s economy will be as big as Canada’s, and Brazil’s economy will be bigger than France & Germany combined.
So in the future that’ll create a larger demand for US goods while adding to global scientific & technological advances. Sixty years ago South Korea was a dirt poor nation. Now they are a world leader in biotechnology with a stable middle class.
That’s good. Because it certainly isn’t a political issue.
Traditional economic thinking (by which I mean pretty much anyone who knows about economics) believes that globalization and free trade are generally good because it allows nations to produce the goods and services they are best at producing. It frees up resources and capital to be used elsewhere in the economy to perform other needed work. And generally, it allows consumers to buy goods and services at a lower cost.
That said, in the short term there are always winners and losers whenever the economic status quo changes.
No. That was a crisis caused by debt, not outsourcing.
You might usefully divide globalization, in the sense of increasingly open international trade, from globalization, in the sense of the particular way in which key institutions are currently pursuing the opening up of international trade.
On the former, there is a near consensus view that globalization is good for all nations in the long run, especially one like ours with tremendous social and physical resources. On the latter, the view is not so unified, and there are legitimate criticisms of the major trade agreements and institutions through which globalization is being pursued.
That said, most of the criticisms of globalization-in-practice concern how it is affecting poor countries in the global south who aren’t well-represented in global institutions. For example, people criticize unfair agricultural subsidies, rigged systems of intellectual property favoring those with capital over those with unique biological treasures, and agreements that prevent countries from effectively taking human rights into account in their trade decisions because it looks like improper favoritism. Thus, even within the community of economists and others who criticize globalization as it is currently proceeding, the dominant view is that it is good for the US, if not everyone else.
Globalization is like the trickle down theory. There will be so much more being made and sold that a lot of money can be made. However it gets ugly for the richer countries in the near term. Labor will be allocated to places that will work cheaper. We already have child labor being used in many places. If they can get away with it ,they will do it. It is a mad race to the bottom. Safety standards, child labor, environmental destruction, suppression of indigenous people, corporations taking over governments and all other money making techniques will be in play. It is not pretty.
I doubt that there is any non-fringe leaders who advocate for anything except globalization. They might disagree with expansion into particular countries or disagrees with the minutiae of how it’s undertaken, but that is different from arguing against globalization as a general concept.
Trade is good. It helps stabilize and link the world together. It helps to increase the number of people working on improving the quality of life of mankind. It particularly (can) help to raise the quality of life in poor regions without need for revolution or war, and via a process that creates wealth rather than costing it.
I mean actively arguing this position right now. Is the administration or any prominent economist publicly stating (post-financial crisis) that we must continue on the globalization path? I’m not doubting the assertion. I’m just wondering whether anyone is currently putting themselves out front on this even after the recession.
The thing about globalization is that it will probably involve losing a lot of manufacturing jobs, which happen to be prominent industries in Ohio, Pennsylvania, and Michigan. Additionally, globalization increases pressure on the US to cuts its bloated agricultural subsidies, so critical in Iowa. Where have you heard of those four states most often grouped together? Presidential politics. So politicians (of both major parties, but its worse among Democrats because of unions) walk a tightrope where they don’t want to be seen as exporting anyone’s jobs or cutting anyone’s subsidies, but they also want to open up trade because its good for the country as a whole and because big corporations want it.
So there’s quite a bit of political rhetoric about the dangers of free trade, criticism of NAFTA, etc. But it’s mostly just rhetoric. I think to the extent there is genuine disagreement among politicians, it is over the extent to which trade deals should take into account environmental and labor issues. Do we want to open our borders to goods produced by child workers? That’s not really a question of whether global trade is good. The underlying assumption, that open trade benefits the country as a whole, is pretty universally shared, the question is just whether the government should regulate it in the way it regulates domestic markets.
If there is nobody prominently in favor of globalization it is for the same reason there is nobody prominently in favor of, say, democracy. The intellectual battle has been won so effectively by Friedman, Krugman et al. that there’s no point having a debate; there’s nobody but cranks left on the other side.
I wonder if it might help things along here if you defined what you think the term “globalization” means. The reason I ask this, is that you ask that question as if the current economic situation could somehow repudiate the idea that free trade between countries is a net good. I mean, that is one of the rock solid tenets of economic theory.
http://www.export.gov/logistics/eg_main_018142.asp Here is a list of tariffs by country. Where is this free trade you are discussing? It does not exist, and has never existed. It is just a mantra that sounds good to some people. American corporations are the only ones pushing for free trade. These countries all inhibit importation to protect their industries and jobs.
I have not interest in what you have to say on any subject. I want the OP to define what he means by “globalization”. Please let him do that without interference.
Very generally speaking, I mean to explore the issue of why the U.S. shouldn’t use tariffs, import restrictions, tax policy, restrictions on export of technical knowledge, and similar means to try to prevent a range of jobs, such as manufacturing and other sectors from being offshored.
Read this article by Paul Krugman, where he compares opposition to Comparative Advantage to creationist’s opposition to Evolution by Natural Selection.
