The prosperity is all most here.
All we had to do was give poor countries our factories that fueled our cities and states with tax money .
Gave the middle class good paying jobs.
Now they gone and never coming back.
The prosperity is almost here.
13
NAFTA was the problem and was implemented by the Clinton administration. They sold the American people out big time. Hopefully President Trump will do something to put us back on top again. Hopefully the family structure will follow and flourish again too.
2
The article classifies people into two groups: consumers and workers. The benefits of globalization for advanced nations is a middle (consumer) class wih a greater ability to spend money and buy goods that's are produced by workers in developing nations. The implied goal ignore globalization according to the article I should the production of more consumers in developing nations. The standard should by which we measure quality of life should not other be whether people can't see a movie and eat at KFC. There I should motel tonthe human condition than consumption. This is the resistance to economic globalization. The intensification of economic globalization has us act as consumers in more and more spaces of our daily lives. The lenses used by economists only imagine people as worker/consumers in a global economy and those lenses shape policy that affect and organize many of our lives in ways we don't want. This is something economists don't understand and so we end up with derisive articles like this one that assume that anyone who pushes against global economic order doesn't get
It. We do. It's not that we're against globalization, it's here, it's that we want a say in how out world is organized and the ethics that organize it.
10
Why does the liberal media promote and advocate for gloablzation, when it is obviously detrimental to the little guy? It is counter-intuitive. The media purports to support the down-todden, but globalization is obviously painful to the middle and working class. It is an upside down world.
There is a green slogan, 'Buy local'. This is supported by more than a few liberal minded folks. This slogan makes sense on so many levels - 1. it encourages support of local businesses who are neighbors and 2. is more friendly to the environment. Yet the media peddles globalization which has a huge environmental and carbon footprint (shipment of tremendous distances) and does not help your neighbor unless you think that your neighbor is now China.
Americans were much better off with a more local economy or at least an economy based upon trade with equals - i.e., amongst other developed and democratic countries with comparable stadards of living, worker protections an democratic insitutions. China does not offer any of that, and the system breaks down as a result.
11
We have given away the blue collar jobs and are in the process of offshoring any white collar job we can.
Don’t worry, eventually everyone else will have enough money to buy the things we no longer make.
8
“The interesting thing about tariffs on steel or other goods is that it’s fighting the last battle, not the future one,”
Replace a few words and that’s the current political landscape here. Boomers had their chance and now it’s gone. STOP trying to bring back the past!
1
The author conveniently forgets to mention that the benefits of globalization flow only to the shareholders of the company in terms of higher dividends, share buybacks etc. The general public is left without the health insurance, without the money to send their kids to college, without the protections of a country that really wants to take care of its citizens. What we have now is oligarchy of few companies, and an economy that works only for the rich. And, then we have the propaganda machine of of Fox news that divides the society and tells people that the cause of all their problems are immigrants, Blacks who are taking away all the resources. To counter this narrative we need a country that provides basic safety net in terms of healthcare, education and basic standard of life for everyone :-)
15
That’s OK, the parts of the world the self-righteous (& misguided) anti-globalization crowd feign concern about aren’t necessarily dependent on the West anymore. As with Trump & Trumplicans, this has been about short-sighted white westerners feeling threatened (witness Sander’s blustering about China). And no, globalization is not “another word for colonization”, to claim anything of the sort is to demonstrate ignorance of how the real world works, while feeding on anti globalization, anti free trade propaganda. Parts of the world like Asia (I am from Goa, India) have many problems, free trade & globalization are not among them - try corruption, authoritarianism, curbs on personal liberty & freedom of expression, etc. Those actual problems however can in many ways be traced back into the colonial era & its legacy.
1
I ran Mr. Irwin's thoughts through google translate (Plutocratish > English) and got this:
"Yes, my employers have stolen your jobs and put your health and even your survival at risk, but they've made a lot of money doing it so they want to keep at it. And you should let them because the next phase of things is going to be really good for the banks and the pharmaceutical monopolies, which will be gaining new customers all over the world. All YOU have to do is wait. And, after all, you've waited all this time, what's a few more years? So just wait. And wait. (And wait.)"
12
I will bet Dave Autor and the journalist who wrote this $1M if they think the Chinese government will ever allow the US to export significant products (apps!) to their citizens. Throwing around buzzwords as has been done for 4 decades is not going to work. We have all seen this movie. It ends with China having all the jobs and the elites telling us that it wasn't supposed to work like that according to their textbook theories.
9
This article utterly fails to persuade. None of the alleged rewards of further globalization are going to the people who have already seen their livelihoods destroyed by the last round of globalization. Why should they buy in? This sounds like the lament of a capitalist that the little people are interfering with his plans, just as they were set to really be profitable.
12
I would love to say that "globalization" is a good thing. That it benefits our people and country and that of other countries around the world. But, looking at it critically, I can only see it benefiting the wealthy and corporations.
It's wonderful, on one hand, to know we're giving workers in, let's say, China, a job and allowing them to live a better life, but aren't we also exploiting them and their cheaper labor at the expense of our own labor force?
When you factor into this equation that we frequently receive substandard products from China that can kill our pets or injure our people, and we know unequivocally that the Chinese are engaged in espionage against America, how can anyone cheer for the flood of products on our store shelves from China?
The idea of "globalization" is a good one. We simply aren't administering the concept and constraints properly.
7
Remember the "look for the union label..." ditty from the 60s and 70s?... remember the glee of southern states that took "northern" manufactoring jobs ('cause: right to work, no unions, owner friendly government...) that's still going on today? Like water eroding the countryside, Capital will always seek the lowest level of labor cost. And yet, for all the "blame" on globalization causing our ills, WE"VE BOUGHT the anti-union line, BOUGHT the right to work jingo, BOUGHT the less and less taxes will set you free panacea, BOUGHT a million products looking at the label on the OUTSIDE and never once glancing at the INSIDE...
Mr Trump IS the defining example here- rail against trade imbalance, theft of intellectual property, impose tarriffs of China... but have your namesake clothing made there, furnish your namesake properties with imports...
don't like this picture? then stop painting it....
6
There's a real danger in wearing horse blinders, an affliction that economists are especially prone to.
Here that is in Mr. Irwin's failure to ask how all of those goods can be manufactured for the hundreds of millions of peasants entering the middle class without raising global temperatures to devastating levels.
3
how much State-Corporate capitalist Kool aid is being served in this article? why is it automatically good to refer to expanding bases of 'consumers' when we all know that consumers are increasingly marginalized and subject to increasing shares of the burden that corporations create, with the blessings of the state?
why not increasing numbers of people who experience upward economic mobility? increases in the numbers of "owners" (another capitalist term) or food secure people?
we should not let it slip each time we are referred to as consumers. that is a term of alienation and one that reaffirms the ideology of modern capitalism.. which is running into it's logical limits until we start monetizing all social relations and start mining asteroids and selling shares of other planets......
1
Finally, someone of the MSM persuasion makes the obvious case against the use of the neutron bomb of tariffs. The economy has adjusted to the outrages of race-to-the-bottom global capitalism; why tariffs and a potential trade war now, when it will only blow it all up again and produce no net gain for us or anybody else?
The solar and steel/aluminum tariffs share the absurdity of threatening more jobs in secondary industries than they have any hope of creating or saving in the primary manufacturing they ostensibly are targeted to benefit.
So elites and corporations in the US have transferred the wealth, and lives, of the American Middle Class to the global poor, and 20 years later, after those people are already dead from suicide or drug overdose, some of that money may come back as increased profits for those same elites and corporations. You've convinced me, NYT. Globalization is great.
6
Have all the costs of globalization been borne? I think they are still being borne in the “rust belts” of many of the advanced economies, which may explain the rise and popularity of white nationalism in the West.
4
This article fails to acknowledge the protectionist trade policies of countries with rising wealth. China is obvious on this front, but Japan has been guilty for decades. Following the reasoning of this article, the US will be reduced to an agricultural state ran in the manner of a banana republic that its leaders are turning it into.
4
"the China shock on large-scale manufacturing and its mass employment effects, that part is largely behind us,” Mr. Autor said.
This shockingly tone deaf comment demonstrates the problem. The policy elite thinks in terms of events that affect the global economy. Once the event has occurred, It's behind us, as he said.
But it's still a living, smoking, bleeding disaster for many millions of Americans who still have no plan, no resources, and especially none of the leadership required to move into a new economic paradigm. By now is for them likely too late. They will continue to make us and our children suffer for it.
7
I don't believe a word these "experts" say. Globalization deals were not made for our benefit but for the benefit of the 1%. The rest of us saw salaires stagnate, stores flooded with cheap trashy junk made in China and customer service disappeared as all calls were routed to useless call centers in India. Why should we have to bear the cost of lifting people in other countries out of poverty? That is their governments' problem, not ours! Our government should protect us, and I'm hoping we'll see less Chinese junk on store shelves too.
2
An interesting column, but you neglect a discussion of the late 1990s anti-globalization movement. Seattle???? The backlash started long ago, only to be interrupted by 9/11, security issues and two wars prior to the Great Recession. We are just arriving back to that era...
1
This is why having a president who scoffs at knowledge of any sort and who wallows in his own ignorance will be so damaging not just in the short, but also in the long run.
And this article comes at - no surprise - a wonderful time, although maybe Aug. 2016 would have been better - if only a few million people in Ohio and Wisconsin & a couple of other states had read AND UNDERSTOOD IT.
However, I'm more than a little suspicious as to the accuracy, because the Times team (P. Krugman, Capt.) has been beating the pro-globalization drum too loud and too long.
Specifically, a major point is that "trade has leveled off since 2008."
Seems to me that that's both dubious and overlooks the events of 2008 and nearby, namely the near-death of several major economies.
Kind of figures that trade would slow down under that circumstance, ... and one can very plausibly argue that since only the very wealthy in our country have gotten back to where they were at that time ... and they can buy yachts from US producers, maybe, all we're seeing in terms of lower trade numbers is that people are still not all that flush. If housing numbers have picked up, THAT has nothing to do with trade. If people are spending on cable service, Netflix, etc., ditto.
10 years is really not a very long time, so that "we've leveled off" is also suspicious in terms of "reality!" Has global warming ended, because NYC has gotten a lot of snow lately?
Not for the first time, one wishes that op-ed pieces were better edited - somebody smart and knowledgeable needs to say, "Neil, TheUpshot should INFORM, not campaign!!"
1
‘freelance labor’ there’s a new buzz phrase for open borders, every man for himself legal or illegal opportunism. We know about the economic upheaval from globalization. The cost to developed western economies for the sake of the developing. Now let’s talk about the damage to social cohesion without it breaking down into intellectually lazy accusations of xenophobia.
1
Let's be honest. Irwin or the NYT would never agree that there was a "right" time for backlash to globalization.
It so happens that millions of voters in Europe and North America do not like having race to the bottom labor competition with the entire Third World. They do not see the benefit of enriching China and the Pacific Rim so that their own standard of living remains stagnant. They do not like millions of immigrants moving to their countries without permission.
And it turns out that making China wealthier didn't make China a free market paradaise. It just emboldened authoritarian nationalistist mercantislism whose only rule for any interaction is "China wins!".
3
You’re wrong Mr. Irwin, the next step in globalization will not be a plus for America’s and Europes middle class, the next step will be the American multinationals that allowed this to happen will now be thrown under the bus. The Chinese will shortly no longer need American companies at all, they will have bought, stolen or been educated acquiring all the necessary technologies. We will be a colony to visit. There are over a billion industrious Chinese hungry for the life America had in the fifties and to delude ourselves into thinking this is somehow going to benefit us is idiotic. They are already creating the next generation of industry and in a very short time will as example make all the autos not some parts. The Chinese have circled the globe cutting deals to ensure continual supply of raw materials, they have been building a “New Silk Road” and establishing relationships, they have been turning out engineers and scientists in their own Universities be the millions, this as we have been shuttering entire towns, our streets now teem with homeless, our children’s futures diminished
unless you’re one of God’s chosen few, this as we squander our future fighting wars for others in the Middle East. Our country has been raped by the most squalid of vultures. We won’t recover, our rotten brand of capitalism has been exposed for what it is, a fraudulent rip off. We will end in either a whimper as we continue to circle the drain, or with a roar in a war or revolution.
3
Globalization looks like a search for cheap labor. That's about it.
4
Trump and the Populists are running things now; back to the past ;of course. Trumpists pull us out of the World. The World will go on; without America. Ray Sipe
I'm afraid Mr. Irwin couldn't be more wrong.
Either we do put the genie back in the bottle OR we will have fascism. Full-bore fascism. The scary kind, the kind that will make the likes of Trump look like a kitten by comparison.
The genie will either have to go back in the bottle or democracy is going to be completely annihilated.
Either the globalization advocates secretly pine for a fascist takeover or they are absurdly naive.
4
Aaah, the old one-two. Capitalism up the wazoo for the poor countries, and protectionism at the slightest hint of inconvenience to the rich. Gotta love western ideas of fair trade! When America floods India with Coke and Pepsi, that's good and righteous. But when India sends its surplus labor to America? Bad, bad India!
2
You say, 'the wrong time'. When is the right time?
We've gutted the average American's dream for 4 decades. Reagan and the Republicans cut taxes for the rich (much like Trump and the Republicans) and the working people have gone down, down, down ever since. So, what do you propose?
The term 'globalization' is a way of saying open competition on the world stage. It doesn't matter how much you pay your workers, it doesn't matter if you pollute this planet, and it really doesn't matter if you're a cutthroat capitalist or communist. All that matters is the billionaire class grows, at about the same rate as the lower-class, in industrialized countries, grows.
So many lies about equality and values and community. We've wantonly been played by the rich and their lawyers, lobbyists, super-PAC's, right-wing media, politicians (usually Republicans), judges, etc.
We're stooges, and we've been so dumb for so long that we now have the most vile and fake and vainglorious President of all time. We kind of deserve this greedy, hateful, destructive Trump. We've had so little honor for so long.
Equality. This is the problem. Greed. This is the problem. Globalization's just a fancy word for the rich getting richer, democracy fading and humanity taking a dive.
5
Yes, indeed. China is building a massive military claiming the entirety of the South China Sea, threatening the rest of Asia largely as a benefit of the massive investment, technology and jobs transfers from the USA to China's low wage, abused labor force.
Nothing brings capitalism and communism together like tax breaks for sending jobs from the US middle class to an oppressed, impoverished, low wage labor market controlled by a dictator.
Lenin gave Wall Street too much credit:
"The Capitalists will sell us the rope with which we will hang them."
He should have said:
"The Capitalists will give us the rope with which we will hang them."
I'm sick of Pollyanna, psuedo intellectual nonsense about one world economy. We have placed health care out of reach, advanced education out of reach, our infrastructure is in decay and we have a literal mad man in the White House.
We can thank all the Ivy League intellectuals, moderates and centrists for the undoing of democracy and the rise of US totalitarianism.
The US intellectual class is self-absorbed and their smug entitlements are destroying us.
6
How has the NY Times itself benefited from globalization? Is Times journalism reaching China's middle class consumers? Has U.S.-based employment at the Times increased now that digital subscriptions are available in most parts of the world?
Americans have finally realized that imported cars, clothes, and electronics are creating the same types of economic, diplomatic, and national security distortions that imported oil did until very recently. There is no upside to American factories closing and Americans being thrown out of work.
4
Our bad luck, as a nation, to be “led” at this time by a deluded sociopath, too lazy to understand where the real problems are and too impulsive to keep from making things worse!
Life is hard enough - without a Me-der (instead of a leader) taking us down the wrong road, the road to ruin.
We must look to the young (I am old), those marching today for their lives. I just hope we survive this mis-administration so the young can undo the damage Trump and his cronies are causing.
Re the headline: If not now, when? Global rule by multinational corporations, rather than elected governments, has never been a good idea.
1
MikeCody, you can't buy an iPhone if you've no money.
You can't have money unless you earn it, steal it or inherit it.
If you lose your well-paid skilled job, thanks to globalisation, then you're worse off.
Without a job paying a living wage, globalisation is nothing more than a sick joke.
2
NYT " Globalization’s Backlash Is Here, at Just the Wrong Time."
The headline above is not entirely correct. It should read: "Globalization Backlash is Here, at Just the Right Time for China and Developing Countries."
The US corporation-led integration process of the second half of last century created winners and losers.
On the winning side, politicians, corporations and wealthy investors worldwide.
There is not a single middle-class politician in the US Congress today.
One important NYT investor is Carlos Slim Helu, a Mexican billionaire.
On the losing side, American manufacturing workers which lost their unions and political protection in Congress. This explains why Donald Trump is the US president today; a vote against the political system.
6
To me, the tariffs will only block imports from China. It doesn't have much to do with revitalization of American manufacturing sectors. In fact, the migration has already happened. At Costco, I cannot find clothes or shoes made in China anymore. The tariffs will be painful to China but it may end up doing them a favor after all. Their economic reform must move forward with full speed. Debt-driven economy will be replaced by technology-driven economy. In fact, this is exactly what Xi is pushing now.
To me, the real damage has been done. By losing the manufacturing sectors, most Americans now don't want to do "dirty" works. In fact, the influx of cheap labors is a much bigger problem. What is the wisdom of bringing in cheap labors to make things in this country? Yes, the products are "Made in USA" but by "cheap immigrants". The can-do spirit and the hands-on ability are disappearing. When manufacture, efficiency and cost-cutting are essential. However, for "managers" doing desk works, they make things more complicated to justify their values and contributions. Of course manufacturing jobs will not come back unless things can be made by robots. The reason is so simple! Stupid, the problem is "administration" but not manufacturing.
2
Missing the point: the global backlash is spurned from power brokers such as Putin, The Kochs, Trump etc who want the wealth of the globe to themselves. Thye do not care about the economic conditions of the global population or anything else. Its is a they say all "Trumped up"
3
American ships were trading with China in the 1700s. Global trade, or "globalization" is not new. The basic concepts of free trade/capitalism were outlined pretty clearly in Adam Smith's "Wealth of Nations" in 1776 and his contemporary and colleague Riccarod's "proof" of the benefits of comparative advantage. (Free trade benefits everyone in aggregate)
The devices we are discussing this on and the networks on which we do it are ONLY possible because of globalism. But "globalism" as a term has been coopted as a "dog whistle" term by the extremist right.
The fact that most Americans can spout endless sports statistics but could not tell you who either of those people are or pass Econ 101 does not change the rules of economics. The fact that we have an imbecile in the White House who is actually more economically ignorant than the ignorati who adore him makes things far worse.
2
This is the price we all pay for cheap goods and services. Pay $20 for a pair of jeans at Wal-Mart? Or $250 for the American made version? That's the trade off. We've met the enemy and he is us.
1
This is a brilliant, well-informed, original analysis, which should be required reading for all economists, policy-makers, and those who take an interest in politics and public policy.
1
http://cepr.net/blogs/beat-the-press/more-thoughts-on-trade
March 25, 2018
More Thoughts on Trade
Neil Irwin had an interesting piece * arguing that Trump is fighting the last battle on trade in worrying about imports of steel and aluminum. His main point, that the millions of jobs we lost in manufacturing to trade in the last decade are not coming back, is largely correct. But there are a few points worth adding....
-- Dean Baker
[ Terrific commentary and terrific column. ]
1
Globalism is basically how to relocate factories to low labor, environmental, safety, education standard locations, while keeping access to selling back to shrinking Western middle class, (while blocking access to Western exports). Oh also how to locate corporate profits in low tax jurisdictions. People are starting to see what Globalism really is.
7
Is globalization really the problem, or is it unfettered capitalism and market driven economics without proper regulations? Can anyone really believe that if globalization were to vanish today, the lot of Americans would improve as a result? The problem is, the nature of our economy benefits a few disproportionately highly, and leaves most people out. Globalization is just another facet of the modern world, which cannot be avoided without losing ground to countries that benefit from it, and which benefits a few much more than it does others.
3
The Chinese government has been “encouraging” companies to move their R&D centers to China.
This will not work out well.
4
"Globalization... delivering immediate pain to rich countries, along with benefits that only now are starting to be more apparent"?
Well, the rich and heads of big corporations are, as usual, immune to the "pain," and they always will be unless things change, while many OTHERS in "rich countries" have been feeling the pain and not really getting much in the way of "benefits," since they're unemployed, under-employed, or working with no benefits in the so-called "gig economy" (a euphemism, if here ever was one, for the "right" to work with NO benefits and NO job protections!).
22
Until the US implements universal healthcare, affordable or free higher education, and a solid safety net for everyone, as the long-globalized northern and western European countries have done for their citizens, Americans will continue to resent globalization. Right now, most of us are not allowed to share in the profit-taking, and the only thing that is going to ameliorate the resentment and anger is a solid social safety net. Social democracy had better not be much longer in coming, because it has been too long already!
40
You already massively share in the benefits of global business every single day with an incredible array of products and services for very cheap, and have done so for decades.
OK, this is all making me physically sick. I’m going to type this quickly and then shut down the laptop for the rest of the night.
I’m old enough to remember when there were foundries (such as made wrought iron railings and implements), textile mills (socks, hats, underwear), knitting mills (fabric, lace) in every small city. For those who didn’t go to college, you either went into the military or you worked in a mill. (Naturally, there were retail sales, barbershops, building trades, etc.). But for the purposes of this article, to work in a foundry or mill, all you needed was a willingness to work (usually) three shifts and a basic understanding of the machinery on which you’d be trained. Foundry workers needed steel-toed work boot and a few personal tools.
This all began to change with the consolidation of these mills into larger entities. When they were no longer locally owned, owners had no interest in the communities in which they were located. Mills were merely investments. At some point, and I recall it being far earlier than the 90’s (more like the late 70’s – it was after Nixon), the larger entities devised a strategy to offshore their production. This served two purposes. One, it satisfied the desire for cheaper labor. Two (maybe even more importantly) it created a new customer base of staggering proportion in the newly industrialized nations.
30
Ya that’s good thing. Over that same period, hundreds of millions of people moved out of dire poverty in developing nations.
It is difficult to understand how American workers benefit when more people in China can afford McDonald's brand hamburgers. Hollywood is the avatar of an industry where massive profit flows to a few stars, while temp gigs and unemployment insurance suffice for everyone else, and even it is being eclipsed by China's own budding film industry. A competitive advantage for the United States is becoming harder and harder to find. While the horse may well have already left the barn, that is a rationalization or a lament, not a justification for tearing off all the barn doors.
37
You guys hav long since unionized your way out of competitiveness in many industries.
China has shown that aside from a few status brands like iPhone, they have no desire to allow foreign companies to freely compete in their market. They have made a fine art out of hassling and regulating foreign competitors to such an extent that many of the best US companies essentially don't bother to compete there. The reason Trump can impose tariffs is that behind closed doors most US business interests are apathetic and think a shakeup might exert pressure on Chinese leadership to change. Of course these business leaders cannot outright say this, but that is the sentiment at least in California.
27
Agree.........and which nation created the iPhone? The USA - with Steve Jobs encouraging a crew of talented people at Apple.
Who copied the iPhone? China........and other countries. Cell phones aren't the only intellectual property copied / stolen by other countries..........as yourself which country invented most any product you have in your home or anywhere else. Then ask where those products are manufactured now.
1
Globalization is great if you are China, Germany or Bangladesh. A US outsourcer. Or an academic economist.
Any way one looks at it, it is a transfer of wealth. Some countries manage it better than others. Case in point: China. It benefits from the openness of globalization at the same time as it benefits from fierce protection and acquisition of foreign know how.
44
Bravo! "China.... benefits from the openness of globalization at the same time as it benefits from fierce protection and acquisition of foreign know how."
China protects the work of its citizens - including China's billionaires - while stealing foreign knowhow........and they've been doing it for decades.
Why spend millions on research and development when you can sit back and wait and either steal/copy the product or steal/copy the information on how to make the product?
And it's not just China doing this.........
2
Anybody catch what's missing from this article? Any mention whatsoever of fair labor practices and environmental protections.
Note that it's called the WTO, the World TRADE Organization, not the World Trade, Labor and Environment Organization. It's mission is to promote trade for those business entities who are so large that national borders are a constraint. It's mission is NOT to propagate improved labor rights or environmental practices. And of course, there is no international organization with the kinds of legal powers available to the WTO to support labor rights and environmental practices.
64
The problem is Globalization means different things to people than it does to corporations. People embrace the idea of an interconnected world with an exchange of ideas, goods & services. Corporations look at it as a way to lower labor costs, avoid costly regulations, and have little responsibility in workers health or their retirements. China’s totalitarianism for example, makes this all happen seamlessly on the other side of the globe. No ones asking for globalization to stop. I’d like a smarter approach without giving up every job to a joint partnership so we keep people working and our intellectual economic might stops following out of the country. Pretty soon Americans will be in the outside looking in at the world because we don’t make anything “real” here anymore.
26
The concept of globalization as seen by Third World countries is simple: Heads I win, tails you lose.
1
And the biggest winners in globalization have been, as always, the richest. In America workers have lost out to the executive suite and the likes of the Koch Brothers. Unions were demonized, more states became right to work which is not what it sounds like. More people do not have a dependable income. More Americans are contract workers with no protection from dishonest employer practices.
Globalization has been great for the multinational corporations. For the rest of us, the jury's still waiting to see if our politicians develop a backbone when it comes to supporting us, we the constituents, the under- and unemployed who have lost. We lost not because we lack skills. We've lost because, since the 80s, businesses stopped investing in or caring about employees on a national and a global scale.
56
A main complaint against globalization is the skewed distribution of income from it that goes to the relatively few at the top. But that skewed distribution is also true in the domestic business context. The answer in both areas lies more in a more progressive tax policy that can capture some of those outsized profits and income and redistribute it to those at the lower end of the income scale.
21
And we had that progressive tax policy, decades ago. Trump and his crew have made our tax policy even more regressive. Basically we now have a feudal system in which everyone in the US who isn't rich, is a serf whose tax money subsidizes the rich.
USA does not have a Wealth Tax as in other advanced nations. 3% tax on all assets annually. That changes society but we don’t talk about it. The average Western European has a much better life than the American.
Globalization had is growing pains for sure, but anyone with a modicum of knowledge of world history would realize the dangers that nationalism pose. Nationalism of the kind espoused by the “intelligentsia” favored by the Steve Bannons of the world gave birth to two cataclysmic world wars in the Twentieth century. The primary motive for the belligerence of the Japanese Empire in the 1930s was, for example, raw materials. War, not trade deals, was seen as the only practical way to get the resources needed to fuel their modernizing economy. The lessons of history are constantly relegated to the dust pile of history.
9
Very few have studied or know anything about history.
It really makes you wonder why the politicians allowed this and even encuraged this to happen.
Globalization has been a disaster for the American middle and working class. Both good paying blue collar jobs and white collar jobs have been mass utsourced to lower cost countreis, and at the same time, America has experienced mass migration, both legal and illegal, further reducing wages at home. A double whammy.
This benefits only the corporate CEOs and stock holders, and not the US labor market. Americans tend to overconsume, so the consumer angle is not a real benefit, but actually a detriment.
This led directly to the election of President Trump. As long as the pain of globalization continues, the backlash will increase, and more anti-globalist politicians will increasingly win elections. The recent election results in Italy are another example. The backlash is long overdue.
35
Excellent points!
As good-paying blue and white collar jobs left the USA, America experienced mass legal and illegal immigration. As you say, a double whammy. No one benefited except the wealthy: there are now far more wealthy people than 20-30 years ago, and their wealth has increased.
Blue collar, pink collar and some white collar jobs have seen wages drop. Millions of blue and pink collar jobs and white collar jobs have disappeared.
Our government subsidized the disappearance of jobs by giving tax breaks to the owners of the means of manufacturing who moved the equipment to other countries.
The workers in the disappeared jobs used to be taxpayers - and because of our nation's social policy, many of them are now recipients of tax dollars, through welfare / SNAP / SSI / SSDI.
At the same time, our politicians encouraged immigration, both legal and illegal. The cost of bringing in a legal immigrant plus family can be well over $100K before the immigrant is settled and working. The cost of allowing/encouraging an illegal immigrant plus family is $50K or more per year....an ongoing cost as the family grows.
We have fewer taxpayers and have increased numbers of recipients of safety net benefits. The result is an ever-increasing Federal deficit (over $73 billion) and Federal debt (over $21 trillion). Many states are operating at a deficit.
The amazing thing about globalization's backlash is that it took so many years to arrive.
4
I believe your comment gives too much credence to so called Politicians. Remember the consensus of the top admirable professions . Airline Pilots and Physicians are at the top, Politicians and used car salesmen fight it out for 9th and 10th place.
But why should we prioritize consumers over workers? I would rather prioritize workers and the environment.
32
We should create situations that are favorable for workers and the environment, but everybody consumes. There's no one who is a worker who is not also a consumer. And people have to consume whether they are able to work or not. We need to think of everyone.
11
Everyone is a consumer, but not everyone is a worker. Workers should be prioritized over capitalists.
1
If workers don’t have well-paying jobs (or jobs at all) how can they be consumers? This is the bit about capitalism that I never understand. Pay your workers less and less, and how are they going to afford to buy anything?
Bill Clinton's promises as he urged Congress to pass PNTR for China in 2000:
"And of course, it will advance our own economic interests. Economically, this agreement is the equivalent of a one-way street. It requires China to open its markets -- with a fifth of the world's population, potentially the biggest markets in the world -- to both our products and services in unprecedented new ways. All we do is to agree to maintain the present access which China enjoys.
Chinese tariffs, from telecommunications products to automobiles to agriculture, will fall by half or more over just five years.
For the first time, our companies will be able to sell and distribute products in China made by workers here in America without being forced to relocate manufacturing to China, sell through the Chinese government, or transfer valuable technology -- for the first time. We'll be able to export products without exporting jobs.
Meanwhile, we'll get valuable new safeguards against any surges of imports from China. We're already preparing for the largest enforcement effort ever given for a trade agreement."
Again these were some of the promises made on behalf of China by President Bill Clinton on March 8th, 2000.
This is what the American people were promised. How much longer should we wait for this promise to be kept?
36
Think of how many of us would have died if we had been able to hold our breath until this promise was kept!
But as Hillary (and people like me) learned, Bill Clinton lied. I campaigned in my area for Clinton. Remember what Bill Clinton said about this: "NAFTA means jobs, American jobs and good-paying American jobs. If I didn't believe that, I wouldn't support this agreement."
If you look at it a positive way, Clinton lied. But if you look at in a negative way, Clinton told the truth: NAFTA did mean the loss of American jobs, good paying American jobs.
Clinton knew he was lying when he made the statements. I was told this by a reputable source, close to the parties quoted: At a meeting with top executives in NYC, an old friend of Clinton had spent a night or two in the White House before going on to the NYC meeting. During the was visit, Clinton asked the head of Sara Lee to delay opening a then under construction knitwear plant in Mexico for at least a year after NAFTA was passed. The division head said, "I'll try".
He didn't try: within a few months the Mexican plant was completed, and knit products plants in North Carolina, South Carolina and Georgia were closed, with the manufacturing equipment loaded and moved to Mexico.
1
“Benefits”? To whom? When those “benefits are more widely and fairly distributed to more than just the very top global elite, then we can say something. We aren’t there. Not even close.
30
1964-65 was America at its greatest. It was America at its liberal democracy zenith. It was the civil rights act and when the middle income American was his wealthiest. It was also when the GOP purged its moderates and became the party of Reagan, Nixon, Goldwater and Koch's John Birch Society.
It was the time of Viet Nam and where losing was worse than arriving at a resolution. It was the time the GOP nominated a mad dog who would rather blow up the world than allow a small nation to forge its own way in the world.
In 1973 Nixon put an end to Bretton Woods which had allow a semblance of a level playing field for all nations big and small.
For nations like Canada globalization has meant a look in the mirror and an understanding that doing business with nations like the Philippines, Russia, and Saudi Arabia not only encourages oppression it adversely affects our people in Canada.
It is a small world and when countries like the USA, Russia, China and India see the world as an alien dimension where the betterment of Canada or Mexico represents a loss to the USA we give globalization a bad name.
Golobalization is meant for those who believe there is a strong possibility of a win/win when peers negotiate. I cannot say enough about the success of peer trading blocks like Estonia, Sweden and Finland and the failure of trading blocks dominated by the USA, Russia, and China.
The demand of countries like the USA to win at all costs may mean it will cost us all.
13
1964-65 globalization.
UK acts such as the Beatles, Stones and Gerry & The Pacemakers began having hit records in the US.
It is CHINA and the elites who have been playing a zero sum game, we (China & The Financial "Elites") win, you (The American Worker) lose.
You're pretty selective in calling out the good old days of the US.
The middle income America was wealthiest - take a look at the percentage of vehicles sold in the US that were assembled in the US.
And Vietnam? You did a nice little dance there about Goldwater and didn't even mention LBJ. He had such contempt for working class Americans that he would rather order them to their deaths than allow a small nation to forge its own way in the world. LBJ felt good that he allowed draft deferments for college students.
Peer trading blocks? They won't bring back your good old days.
This is a welcome alternative perspective to the hand-wringing about "globalization," to which might be added two additional thoughts: First, before the Trump tariff tantrum, world-wide economic growth was finally recovering from the shock of the financial crisis, powering increases in exports and in US employment, and, among things, the boom in the stock markets. Second, China's (Xi's) turn to autocracy is a great opportunity for the US to scoop up Chinese-born talent, who value freedom. US science and the humanities were immeasurably enriched by those fleeing the autocrats of Europe. We can make a similar play with China. Third, China's turn to autocracy dooms them as a long-term economic threat to the US (if we keep our wits about us). No set of rulers is that smart about "industrial policy" and power will corrupt. We may need to take short-term steps to abate the theft of US IP, but the strong move vis-a-vis China is to offer a green cards to Chinese scientists, technologists, scholars, and their families. The risk to the US is unsteady hands. (Small, trembling hands.)
12
Yes, by all means, let’s give out green cards to Chinese born talent who value freedom. They have a name - Taiwanese.
Globalization in all field certainly is the best approach to world's functioning and realization of peace on the earth. Our President should organize a world forum to discuss this matter and seek world countries consensus as to how we should all operate in this complex world with so many complex problems.
1
Globalization is simply a fancy word for colonialism. It is Colonialism applying new and improved techniques of extraction of resources and exploitation of labor. The result is unsustainable damage to the environment and extreme inequality. It is good for the world’s billionaires and millionaires in the short run but terrible for the vast majority of humanity. In the end everyone loses. The author should look into the notion of Sustainability.
21
I'm a liberal too, but your outlook betrays willful ignorance about how global demand for, e.g., Chinese goods has truly lifted several hundred million people out of poverty and many of the health-costs of poverty. India is headed in the same direction. Any worker on the factory floor here would applaud the economic growth, even if it's created a tiny minority of ultra-wealthy, powerful elites who dominate decision-making and economic competition. People flock to factories when the alternative is to keep doing what they've been doing--struggling to eke a living out of the soil in a crowded village without running water or electricity or medical care, tired of promises from well-meaning rich people in the West to 'save' them with technological or policy prescriptions, no capital or options to do anything else but the same as all those who came before. As ugly and destructive as it can be, industrialization gives a comparatively fast and easy out, unrivaled by anything else that has been tried (and there have been many, many experiments).
I’m Chinese and I work for Alibaba Group in New York. My job, contrary to what many would think, is not about helping Alibaba compete with Amazon and sell cheap iPhone screen protectors to Americans. In fact, I’m here to do the opposite. I’m here to convince American companies that make great products to sell INTO China.
Some of these brands ask me, “well, will Chinese 25yo women really buy our moisturizers? I mean, these are $40 a piece.” Well, yes. The urban Chinese middle class is now driving the same cars you’re driving (save the pickup trucks), paying just as much at local restaurants, running marathons and buying expensive road bikes. Some are spending more on vacations and their children’s education than you are.
I split my time between China and the US. Seeing what’s happening in both places, I can’t agree more with the author. Now is simply the worst time for rich countries like the US to reject globalization. How about, instead, you encourage continued innovation to make your goods and services even more competitive? That’s why Chinese people, and the rest the world, (used to) look up to this great country anyway. And we will continue to buy your $80,000 Tesla’s and $40 moisturizers, if they are good.
26
How many people in China can afford to buy the $80,000 Teslas and $40 moisturizers?
And how many Americans can no longer afford to buy a $25,000 Chevrolet or $12 moisturizers?
Globalization has increased few consumers of high dollar items in China.
Globalization has greatly decreased the number of Americans who can work at jobs that pay decent wages so that we can be consumers of moderately-priced goods.
Millions of Americans are not buying the words you are selling.
3
Good comment, Q.
Some of us don't want to reject globalization. We want to fix it, because it's broken, as you probably know.
In fact, paradoxically, more globalization is the solution to the problems that the last 25 years of globalization have caused for the West. But it has to be done right this time.
That will involve realizing Jack Ma's vision of re-architecting globalization so SMEs can be the primary drivers going forward, not multinational corporations. This will help solve the income distribution problem of globalization that is destabilizing the developed world, because income distribution is inherent in the SME model, so shared prosperity is built into it as well.
The multinational model has failed. The digital platform ecosystem model of globalization is the only hope we have of avoiding global social unrest.
People like Jack Ma, Kai-Fu Lee, Jeff Bezos, Michael Bloomberg, and Reid Hoffman need to figure out a way to make this work. This is a non-trivial task, but there's nothing more important, and the urgency cannot be overstated.
If they can find a path forward, the 2020's may very well be the best decade in the history of humanity. Literally.
Do comment more, Q. Your perspective is valuable.
And welcome to America.
1
How many US citizens work for Alibaba Group in New York, and elsewhere in the US? Is English the language spoken in the workplace? Has Alibaba Group been forced to give up its IP to a local US partner?
I am a progressive and I absolutely do not support unfettered globalization in the pursuit of growth. This kind of thinking-that the globalization horse is already out of the barn, or that there is no turning back the clock-is what got Trump elected and will get him re-elected. $19,000 a year for a family of 4 is abject poverty in the United States. The American economy has to work for American workers, not just for American corporations seeking lower labor costs or for the global middle class they hope to sell their products to. It is the reckless, selfish greed of American financial institutions and American corporations seeking higher profits that forced the horse out of the barn. If Democrats are not willing to represent the interests of struggling families across America, particularly in swing states, they will hand the populist platform to nationalist Republicans like they did in 2016 and that will be a very, very dangerous thing for us and for the world.
29
"$19,000 a year for a family of 4 is abject poverty in the United States. "
Of course it is. But that is not going to get fixed with Trumps tarrifs.
That would get improved with higher minimum wage, better healthcare, better child care, and so forth. All things, that Trump supporters effectively voted against, and always have (lower taxes for the rich is what Republican thrive on, and their voter support that).
Any democrat what would do what you ask them, would need to propose higher taxes, which would not go over well.
This country is selfish, from the rich to the poor, and that is the real problem.
14
Well said and so true.
Much of American middle class losses and lower income stagnation is due to specific policies (high military spending, for profit health care etc) and the policies of jealousy/infighting that have seen the majority of Americans fall behind their peers and see many former developing countries peoples enjoying benefits and societal "givens" that are still outside the purview of Americans and their leaders, from universal Health care, Paid Leave/sick leave/maternity leave and generous social welfare initiatives to name a few but which in more and more countries are increasingly enjoyed and seen as a given .
How about jobs? Bill Clinton and Al Gore campaigned in 1992 on this statement: "It's the economy, stupid". Of course they also worked really hard to get NAFTA passed and ruin the economic outlook for more than a million families.
But perhaps it made Clinton and Gore wealthy.
All my fellow readers appear to be screaming about the disadvantages of globalization and in particular it has meant the concentration of wealth at the top. This is an economic issue and I am not gainsaying its political importance to individual economies. But what about the broader political advantages-- and I am thinking of one in particular: the persistence of more than a 70 years of global peace? Yes, God knows we have had local conflicts, from Korea and Vietnam to Pakistan-India, the 6-day War, Iran-Iraq, Iraq and the US and now ISIS and Syria -- but so far we have not had World War III. I think the biggest single reason is because everybody's economies are so interconnected that no country can go it alone-- and this what Trump is trying to do with his "America First" slogan. Let us never forget who was using that slogan it the 1940s -- the American fascist movement, with Charles Lindbergh as its leader. Trump would like to make the US self-sufficient again, and I can think of only one reason that trumps everything else -- so that the US can go to war. There is no other reason we HAVE to be self-sufficient, but with his military buildup, his appointment of the hawkish Mr. Bolton as secretary of state and now his doing his best to set up the US economy as self-sufficient by binding it up behind tariff walls, that is what it looks like he's trying to accomplish. He's already picked our enemy: China, which would be a BIG mistake--one that Harry Truman didn't make.
10
Global peace? At what cost to Western nations?
How many trillions of dollars (and pounds and francs and lira and deutsch marks and Euros) have Western nations given to their "allies" and "friends"?
And how much of that money trickled down to the needy and hungry of those countries? How much of that money went into numbered bank accounts?
And what peace? Do we have peace when Western nations must supply peacekeepers in nation after nation?
1
Trump’s tariffs on steel and aluminum is not anti-globalization, he is simply protecting key industries from unfair pricing practices that some countries, including our allies, engage in to unload excess production. These necessary measures are long over due and should have been taken by the previous administration. The drama of trade wars resulting from these measures are overblown and are stoked by the press and democrats to attack Trump. These partisan attacks have little regards for the jobs of American workers or the damage that their incendiary rhetoric causes to our economy.
6
I am waiting to see if these tarrifs bring back jobs or raise wages, which workers need. Previous attempts at this stuff have cause the loss of jobs. So I am not sure where your optimism comes from.
"In short, the anti-globalization drive that is spreading across the Western world may be coming at exactly the wrong time — too late to do much to save the working-class jobs that were lost, but early enough to risk damaging the ability of rich nations to sell advanced goods and services to the rapidly expanding global middle class."
And, just when does the author of this piece think that Xi Jinping (now that he is the unquestioned leader of China for life) will open the Chinese market to free trade?
8
China is the largest market for GM, Boeing, Caterpillar etc. China plays hard to give access to its large market because that’s a TRUMP card. We’ve been used to eating away huge slice of global wealth pie for so long even though we are only 5% of the world market. Now we got to get used to Asia dictating the terms of trade as it has always done until about 1800s.
Times they are a changing and a resurgent Asia driven by China and India are well on their way to becoming the top two economies of the world. They have always been the top economies throughout human history until the 1800s when free labor due to slaves and plundered Native American resources collapsed their economy.
2
Globalization is immaterial. Only the class war to resolve the wealth inequality matters.
7
The author fails to mention the role of the State in the control of the Chinese economy. China's Government has mastered the art of being "communist", while employing capitalistic principles to boost their economy, and raise its own version of a middle class. In short; have your cake and eat it too.
For the most part, privately owned, manufacturing companies located in the U.S. are competing against Chinese government controlled concerns, and their lower labor costs. Throw in the U.S. Tax code, which, according to Seth Hanlon: "Because of a feature in our tax system known as deferral, U.S. multinationals can delay paying U.S. taxes on overseas profits indefinitely, whereas they must pay taxes on domestic profits in the year they are earned.", and you kinda have a one two punch.
Add to this the short term profit chase, which fueled the race to move manufacturing jobs overseas to reduce costs and increase the bottom line. The Knock Out punch.
8
As you say, China's government pretends to be Communist while functioning as capitalists.
And as tossed around by a few wits, Massachusetts is more Communist than China.
1
As Iennyg posted, our problem is not realizing the significant pain that started in 1975 when Capital stopped sharing with Labor the benefits of rising productivity. That has led to our massive inequality in wealth and income. Great unfairness.
As Mr. Irwin notes, we cannot go back to the past. So, what is forward for us. Three things:
1. A massive Marshall Plan for our own society built on aid to families in the lower 70% of the income scale so that their children have a more level start with those in the upper 30%. Right now, they have little chance of moving out of poverty or lower middle class---struggling all their lives and they are angry!!
2. We must protect our intellectual property far better than we have. Our brains and creativity is what makes the West different. We have the freedom to think differently and that is what matters.
3. We must figure out how to help men be more responsible for the children they father. Single motherhood is a prescription for poverty. Over 48% of children of all races now are born to single mothers.
This will take long-term focus and money. I am not very hopeful of real change. Few in power get it.
12
Wholeheartedly agree with your points 1 and 2!
GOP is generally against women having true reproductive choice. Birth control (hormonal and otherwise, in my opinion) should be fully-subsidized, accessible, and universal given the overall benefits to society. It would be nice if we could have a cultural shift towards engaged fathers, too, but let's start with the obvious and practical.
Pretty amazing to me that you pick birth control over marriage and involved fathers. The family is the source of stability for society.
Let's get fathers involved, and of course let's keep birth control available for all - whether the readily available birth control pills at $4 per month or more.
Part of the Occupy Wall St. movement was an attempt to protest these globalization measures that were strongly affecting us. Yet that movement got bashed down so quick and strong it is hardly remembered or discussed anymore today.
Hmm? I wonder who shut it or these protesters down?
8
Organization like Occupy will remain irrelevant as long as they eschew electoral politics and think street protests alone will change things. The kids on the streets yesterday were also registering new voters. Did Occupy do that? Did it sponsor candidates?
1
Economists have been SO wrong about their effusive claims of trade benefitting America that it has crippled Americans' faith in ALL scientists and experts. Global warming, vaccines, even intelligence agencies are universally doubted today in ways that would have been unthinkable 50 years ago.
You economists need to come clean about HOW. MUCH social damage your policies have caused.
16
Economics is not a true science. Like psychology, economics can explain any failures by citing 'variables'.
1
When the West started to "globalization" process everyone knew that there would be winners and losers and who the losers would be (labor). There was discussion but no around how to take some of the "winner's" spoils to offset the "loser's" loses. It never progressed beyond talk. We have reaped the benefits, such as they have been, of higher profits, higher stock prices, much higher salaries for those at the top. We have also reaped the liabilities of wage stagnation, loss of benefits (healthcare and pensions). I do not care who the "blame" is attached to but wonder why the electorate that has experienced these effects remains ignorant of the causes and fails to vote their own interests. Trade agreements are not the problem, trade agreements that only serve the already powerful is the problem.
9
"Trade agreements are not the problem, trade agreements that only serve the already powerful is the problem."
That's a heckuva rationalization there.
"I do not care who the "blame" is attached to but wonder why the electorate that has experienced these effects remains ignorant of the causes and fails to vote their own interests. "
Some of the social programs of the Democrats and those favored by the Democrats decimated neighborhoods in Detroit. I lived in one. In 1972 a Federal Judge ordered busing for school desegregation. Originally Judge Roth wanted to include cross-district bussing.
Judge Roth (a Nixon appointee) in his findings said,„ “Transportation of kindergarten children for upwards of 45 minutes, one way, does not appear unreasonable, harmful, or unsafe in any way. In the absence of some compelling justification, which does not yet appear, kindergarten children should be included in the final plan of desegregation.”
Enter Reagan describing how the Federal Government is not the solution but rather the problem.
Get it?
I think the expression is: Never Again.
2
BTW, McGovern supported the busing program during the 1972 Michigan Democratic Primary, which George Wallace won.
The problem is that we are given a choice between two corporate parties that say that trade deals should favor corporations. Then they tells us that voting for a third party is a waste of our vote.
So many people look at that and say voting is a waste of time.
That is the opening Trump stepped into.
What was missing when the globalization started was a plan or even a creditable idea of what we were going to do with the people displaced. It was a cold, hard enactment of the republican ideal that the only responsibility a business is to make money for its shareholders, nothing else. So now we are living with the effects of this idealogical purity, adopted by even some Democrats named Clinton. Do you really think just sitting back and believing that someday, things will take care of themselves will work? (If you are not completely happy with the current happenings, that is.)
13
As you point out - although in a back-handed kind of way - it's politicians, Republicans and Democrats alike, who are responsible for our dismal economy.
The dismal economy began its downward slide in the 1970's. President after president benefited from job creation numbers. But they did this without saying the new jobs were part-time, at or close to minimum wage, with no health insurance and no retirement benefits.
And they deprived proud people of good jobs and put them on the dole - the last thing most of these proud people wanted.
2
Globalization will result in a small world-wide elite with massive reserves of resources and no allegiance to any country or society.
For the other 6,990,000,000 people (or 9,990,000,000 people by 2050) there will be disruption until everyone (except the elite) equalizes to the same level of poverty, hopelessness and slavery.
Sure a lot of people will go from making $2 a day to $4 but a bunch of other people will go from a middle-class lifestyle into wage-slavery.
There is no way anyone can sell that as a positive. Trade one good life to make four lives slightly less unbearable.
14
"Globalization will result in a small world-wide elite with massive reserves of resources and no allegiance to any country or society."
The exact same thing would happen without globalization. Remember the era of the oil and steel robber barons. The rich in Americ have rarely felt much allegiance to society in general.
2
WillT26,
I appreciate but don't necessarily agree with your comment that it is not a net positive if we "trade one good life to make four lives slightly less unbearable". One would really have to run the numbers on this but if the extra incomes of those four lives exceed the loss of income to the one (presumably Western) worker I am not sure that you can say it's a net negative.
Assuming that there is a trade-off here, the real question is whether it's more important that the world benefits or our country benefits.
Assuming you mean what you wrote in your last paragraph, I can tell you that to the vast majority of Americans, it's more important that our country benefits.
Why can't China and Mexico and other low-wage countries raise wages so that their citizens can become consumers of the products they manufacture?
As the late Tip O'Neill (D-MA) said, "All politics is local".
And of course,this narrow minded "economic" analysis ignores all the damages done by globalization to the environment.Sea of plastic,deadly air in major cities,climate change catastrophes,wars due to overpopulation on drying land.NO ECONOMIC PROGRAM WILL SURVIVE A DESTROYED PLANET.
6
Interesting article but fails to mention a few things like China’s current wealth and clout in many ways is built on intellectual property (IP) theft from the west (and in some cases seems like willing surrender of IP - outsourcing of manufacturing when often it’s more than just manufacturing ; and it’s not just call centres that are outsourced but also development effort). Hard to make out what the actual western strategy is when it comes to protecting national IP and interests .... seems to be driven by corporate shareholder returns ....
8
Agree........China's wealth is built on it's intellectual property theft from the West, whether stealing designs for tractors or computers.
And it's not just China but other Third World nations as well.
1
The problem is China doesn't allow advanced goods and services to be sold in China unless you get a local partner or give away the technology. So it's a mirage to think the rich nations will get the fruits of globalization. Just ask Microsoft how many windows licenses it sold in China since China joined WTO. How come no Twitter, AWS, Uber , Whatsapp competition come up in any other developed nations like Germany but only in China. The country to be blamed for this is China not United States. However much I hate to say it, I absolutely agree with President Trump.
7
China stole some of the technology and economic modeling. In most cases, we gave it away in pursuit of quarterly earnings to prop up the stock market, 401k, pension plans, etc. Consider the fact that they are our biggest creditor and they buy Treasuries like they are going out of style. China thinks long term. IS thinks 12 weeks into the future.
1
We choose cheaper products in exchange for fewer jobs paying lower wages. If you still have a decent or better paying job you benefit. The well off can afford to pay for their children's education with few student loans and their children may remain as one of the haves. If you are in the bottom half of society - you lose.
6
We didn't actually choose it for ourselves. Our politicians and Wall Street gurus chose it for us.
Remember Bill Clinton and his 'NAFTA will bring jobs'?
1
Without Trump #metoo and now #neveragain would have been much smaller and less significant. And now Trump may just slow down environmental degradation and global warming. Economic growth worship does not include adequate evaluation of environmental impacts. Imagine if fewer cars are produced and growing populations must live in more dense circumstances and walk or ride bikes and refrain from growing lots of grass using water destroying toxins to create "beautifully" uniform grasslands around single houses. Imagine if Iowa pork production is cut because China retaliates and our farmland is no longer stressed to produce as much pig feed.
NYT please take my suggestions apart with a proper article that speculates about the benefit or detriment to global environment as a result of reduced trade and consumption of cheap stuff.
It is 1 World. The people against globalization are the people who want to stop superior products than theirs from being available to the population. I say they cannot stop The World from happening. Superior Products will win. Intelligence is Power.
1
Love it. Well put.
Did you have any relatives who lost jobs in the mid-1990's after NAFTA passed? Do you have any relatives who lost jobs when manufacturing plant after plant shut down? Who lost jobs when call centers moved to India? Who lost jobs on the West Coast when neurologists in Asia did the interpretation of X-rays and CT scans and MRIs?
Didn't think so.
Ask not for whom the bell tolls: it tolls for thee.
1
Globalization has it's pros and cons. It has lifted hundreds of millions of Chinese, Brazilians, Indians and others out of abject poverty. This is certainly a good thing. But at what cost? Well, we might have destroyed the planet in the process.
The purpose of globalization isn't to help poor people. It's to increase corporate profits by maximizing consumption. You maximize consumption by making things cheaper. But maximizing consumption when you live on a finite planet is not a sustainable strategy.
Globalization is meant to ensure that the party never has to end. It doesn't matter if you cut down all the trees in your country - you just go to the next country and cut down all of theirs. Then move on to the next country. You can just work you way down the alphabet. But when you get down to Zimbabwe it's probably going to occur to you that maybe the party does have to end. But by then it's too late.
10
Excellent piece, but I fear fake global warming science could also derail these new found riches.
1
How can you complain about globalization when you continue to enjoy less expensive products made by cheaper labor outside of the USA.
2
How about the people who lost jobs due to globalization who now work part-time at minimum wage and can't buy the less expensive products made by cheaper labor outside the USA?
2
China doesn't follow two of the indications given here. First, the Chinese government restricts capital outflow for ordinary citizens, capped at $50k per year. They do not want money leaving China. Their citizens cannot participate freely in moving investment around the world. Second, the Chinese government blocks many social media outlets such as Google, Facebook, and Twitter (and the NYT among many others). This prevents Chinese citizens living in China from participating in global social connection and information flow.
5
The U.S. "backlash" to globalization is as effective as trying to eliminate the internet and modern technology. The only thing that's going to end it is totally destruction.
I buy locally made as much as possible. Best of all is union made in the U.S. I scrutinize everything i buy. No interest in making oligarchs richer. elections matter and so does voting with your wallet.
10
Keep track. I'd bet 80% of your non-food purchases are made outside of USA. You can "scrutinize" all you want...............in fact you are like the rest of us - you buy the best product for the money.
Yes! I do not, ever EVER shop at Walmart.
The multinational I worked for sent 100s of US jobs to India in 2017 in what Unilever called a “location” strategy. So, yes, it is global competition for good jobs, and no, it’s not in the past, it’s happening right now today. Globalization is only good for senior managers who earn bonuses by reducing headcount (job losses), stockholders, and the 1%.
Everyone else loses because our jobs are gone, multinationals practice tax avoidance but are happy to use the infrastructure our taxes pay for, get tax breaks for not relocating their offices and so on, and beaver away moving jobs to India and manufacturing to Mexico while jamming the shelves of US Walmart stores with their products. Globalization is simply another word for greed.
17
Do you know India is one of the top markets for Unilever? What do you think will happen if India kicks Unilever out of India? Do you think US will gain jobs? No US will lose hundreds of jobs. Are you fine with American companies selling to only 5% of world market? Do you know Most US companies make most of their revenue outside the USA?
Do you know that US with only 5% of world market enjoys 25% of world wealth? Doesn’t that tell you that we are the largest beneficiaries of globalization? You think its fair? Did you know what killed Chinese and Indian economy in the 1700s and 1800s? It is free labor of slaves in America and plundered resources from Native Americans.
The issue is not globalization. The issue is that the rich get away with all the benefits because of low taxes and perpetual tax cuts for the rich. Unfair wealth distribution is the reason for income inequality NOT globalization.
It's rather disheartening that when the little guy who has seen wages decrease, jobs taken or lost, wants to change the way things are for the betterment of themselves and all the others like them talking heads want to smack them back down. They again are abused by calling them things that they are not to shut them up. Globalization is not the utopia the powerful/wealthy thinks it is. For those who find it not working for them have every right to fight against it. It's their survival they are fighting for, just as the wealthy, corporations, fight for whats best for them. Stop degrading those who need to fight for their own well being, and start looking for ways ALL can succeed.
10
A couple of observations. Just as all politics is local, many Americans don't really care that the world's population has grown richer when the economic losses were concentrated in Industrial Midwest and Southern towns where they or their relatives live. If you want to see in one graphic where the winners and losers of the past three decades of increasing global trade reside, look at the 2016 Electoral College map: winner regions are in blue and loser regions are in red. Second, why is a rapidly expanding global middle class a good thing? Our environment can't sustain its current population (90% of whom are poor by Western standards of living), let alone even more consumption-manic households. If we want to accommodate 7 billion inhabitants on Planet Earth, we should immediately start curbing our plunder of its natural resources and that implies putting a hard cap on the number of middle class people worldwide.
5
Why do I suspect that you, personally, are doing well and probably in the upper middle class?
So you want rest of the world to continue to be poor while Americans ride big SUVs and live in mega mansions. You want America to continue to plunder other people’s share of the global wealth pie because we do enjoy 25% of world wealth with only 5% of world population.
The solution is not to continue mass poverty. The solution is to impose carbon taxes on consumption in America and rest of the world. That way we are all equally interested in preserving the earth.
I don't know why we keep talking about the potential economic losses due to the tarriffs. Congress has just proven that we don't care about economic anything by passing another budget that puts us further in debt. We are all doomed. But don't worry, Congress will be fine because they are all rich.
1
The author talks abotu globalization's effect on the western world. In Europe the effects are less since the unionized workforce and government have forced compensation for jobs lost.
6
Exactly! Not to mention our elected Governments working in our best interests with our Societies prospering through what we now see as "givens" and have in many cases enjoyed for generations...from Universal Health Care, Paid Holidays,Sick and Maternity Leave, Overtime, growing wages and social welfare support that encourages if not Equality...but success from avoiding poverty.
America of course has no such "Givens" and its leaders are all about creating divisiveness, mistrust of Unions and Government and if the more savvy or less selfish decided to notice or care...the debasement and exploitation of the majority of Americans over and above their dreams, aspirations and the opportunities that should and could be easily made available to them if the "powers that be" (and are) wanted them to have and enjoy them.
This is excellent work, and thinking. Trade is good and makes both sides better off, and people have known that and made decisions based on that since the "Wealth of Nations," and certainly intuitively known that long before then. But changes can be wrenching, even ones that we figure to have a good outcome. What I think happened is some gross indifference to the actual workers in the US by the owner/managerial class, a complete lack of concern, while the owners and managers grew rich. We could perhaps say the same about workers in higher income countries all over the world, but I certainly do not know that much about working and workers outside the US. This gross indifference was exacerbated by what amounts to internal propaganda in the USA and a bait and switch political program by the Republican Party, and the continual, if charming and amusing, gullibility of the lower class Republican voters. The whole transition was poorly managed.
5
Many of the workers in higher income countries (such as mine) have it MUCH better than the average American Worker due to societal safety nets, welfare support and "universal givens" that we all expect and have enjoyed for decades that unfortunately, many and most Americans do not enjoy or benefit from.
You need better Politicians (on both sides of the house) more representative and agreed on what most Americans need and want.
But most Americans need to be more united together on what those obvious things are...and AGREE with each other on them.
It's NOT Rocket Science...most of us in the developed (and increasingly, the not yet as developed) world either enjoy them already or are in the process of realising them.
Just look around and see what we have and how much better it makes us all.
Well said and to me at least, a common sense and obvious foundation for a way forward which many people myself included, have seen for a long time. This puts real statistics and analysis behind the trend.
Can you please put a different title on this article and disguise it, maybe renaming it “Winning the Global Trade War” and send it to the White House? They are as you point out are “fighting the last war” which if continued guarantees that we will lose it and all be worse off.
1
Ha!
I thought this was going to be about the resurgence of globalism (its lashing back) after the near decade of a backlash TO globalism that came with the Great Recession.
There's no stopping the world from coming together as it shrinks under our many feet and the blanket of electronic and satellite communication systems.
But some people are easily frightened by change.
Just look at the microcosm of the US and the fear of full social and cultural desegregation that leads to ridiculous claims of "white genocide."
The Civil War never truly ended, so it's hard for us to exist as a single entity that can work and play well with others.
But we shall overcome -- hopefully just not too late to solve the environmental issues that our dirty nationalist extremists are exacerbating in the name of "tradition."
A lot truth being told in this piece on how globalization is already embedded in the US and the world economy.
Yet, it does only a superficial job of analyzing some of the deeper impacts happening or to come, such as wit this glib, yet unsubstantiated, assertion:
"That includes more people using social media platforms to connect with people in other countries, companies relying on freelance labor located around the globe, and small enterprises doing business with partners around the world through the internet."
How about actually expanding on to what extent is this interconnectivity of business going on and how pervasive is it? B-to-B relationships that were first enhanced through telegraph, then through phone and fax and now through internet are more often than not just a new means of doing the same job, just quicker and more efficiently.
Also, the articles provides a facile view of apprising the real risk that kleptocracies, China and Russia being the main practitioners, pose to world trade and world order through means of intellectual property theft and cyber-crimes. Those are fronts the US and developed nations should be forcefully putting bullying nations in there place.
2
Globalization failed. Spectacularly. The economists were wrong about just about everything.
And now the West is collapsing.
And it’s beginning to look like they’re even more wrong about where we’re heading.
“major costs of globalization have already been borne” implies that there will be no costs associated with this new era of globalization. Just benefits. So the rising tide will lift all boats. No, seriously, this time it really will.
“rapidly expanding global middle class…” Outside of China, where is this happening in a way that will be sustainable in the Age of Automation?
What is America’s comparative advantage in this new era? What “goods that the United States is good at producing” will we be selling to families of four making $19,000 a year that will create enough prosperity to reverse the decimation of the American middle class? You hint it will be good for Hollywood, Facebook, and McDonalds. How many American jobs will that create, and how will that not exacerbate inequality?
What happens when all products are services that are inherently information-based. Did Ricardo say anything about that?
“Global freelance labor” sounds so warm and fuzzy. But it’s a race to the bottom for the highly-skilled; everything from software developers to radiologists, who are the factory workers of the 21st century.
This will actually be the tipping point to massive social unrest, when doctors are at protests wearing Guy Fawkes masks next to home health care workers.
10
Oh I'm just so glad that multinational companies will be able to make ever more money. That's just great. I'm sure the whole world would love KFC and I'm sure the good people at Yum Brands would love to sell more chicken to people around the world.
I agree that globalization would be a great thing, but what I see is dictators and their cronies getting rich around the world and most of the benefits of globalization flowing to the 1%.
Another thing, how am I supposed to compete with Chinese people who are subsidised by their government and not regulated? I sell CBD hemp products but most of the CBD I see comes from China in huge 55 gallon drums made with Kerosene. People then expect the same prices for material grown in the USA and processed in a food grade lab with things like testing and regulations that cost money.
I don't see globalization being good for hemp and cannabis. I already have to compete with unsafe and unregulated CBD from China. What happens when China dumps millions of lbs of pesticide laden hemp on the US market? How is US grown organic hemp going to compete? It won't. Hemp producers will lose their jobs, hemp consumers will get sick, and the Chinese will make money.
6
Grow your own or buy from certified local growers. It's easy to figure out how to do both.
I am reading, Poorly Made In China: An Insider's Account of the China Production Game, by Paul Midler. It is very enlightening and very much on this subject.
1
Law seems immune and intellectual property is just a legal creation. If you want to increase the value of your IP you need to use political means. Law has few immigrants from the third world and it is hard to outsource legal services. Medical care not so much and a lot of the issue is legal. Since these industries are legally protected and thriving it illustrates that protective trade policy works. Our lawyers have little to fear from Indian competitors. Our doctors not so much.
1
Protectionism has never been a good idea. Trump’s entry into our government has been unfortunate on many levels. He is trying to turn the clock back. As yet, we do not have solution to our shrinking middle class other than kicking our elite loving GOP out of power.
A couple of observations. Just as all politics is local, many Americans don't really care that the world's population has grown richer from trade when the economic losses were concentrated in Industrial Midwest and Southern towns where they or their relatives live. If you want to see in one graphic where the winners and losers of the past three decades of increasing global trade reside, look at the 2016 Electoral College map: regions that won on balance are in blue and regions that lost on balance are in red. Second, why is a rapidly expanding global middle class a good thing? Our environment can't sustain its current population (90% of whom are poor by Western standards of living), let alone even more consumption-manic households. If we want to accommodate 7 billion inhabitants on Planet Earth, we should immediately start curbing our plunder of its natural resources and that implies putting a hard cap on the number of middle class people worldwide.
7
"Second, why is a rapidly expanding global middle class a good thing? "
If the expanding global middle class is happening at the expense of our own industries and jobs being shipped overseas in a giant wealth redistribution, it is clearly NOT a good thing.
7
There is a backlash against the shift of manufacturing jobs overseas, particularly to China. Perhaps such a backlash is a good thing.
It's the perceived loss of American jobs that gets the most press, including in this article. For sure, that's worth think about. But there's more to it than that.
We should be very worried about the loss of American manufacturing know-how. There are many things critical to our economy that are no longer made on these shores, for example the power transformers that keep our electrical grid operational. Most rocket motors used in the US are made in Russia. (this last item may be changing, and none too soon). The list goes on. If the US loses the ability to make electronics, our national security is very much in peril.
China is a worthy trading partner. But they are hardly an always trustworthy universal friend. We need to maintain our own competitiveness. If push ever were to come to shove, I doubt our ability to mass produce lawyers would do us much good.
The world's most valuable company, Apple, has moved virtually all its manufacturing to China. If US environmental rules add too much to the cost of manufacturing in the US, further shifting manufacturing to countries without costly environmental protection, is that doing climate change, which is a global phenomenon, any good?
Globalization is usually a good thing, to be encouraged. But things are complicated, and there very much are limits.
9
I agree with much of what you are saying Alex. (I come from a long line of Hoosiers who made their livings in Indiana-based manufacturing companies). One thing that many people miss, however, is that U.S. manufacturing output has doubled in the last 30 years. It is, of course, a very different type of know-how that’s required today (CAD drawing, robot and CNC programming, for example), but it seems unlikely that we are losing it.
As you say, it’s complicated and there are limits. Let’s just not fool ourselves into thinking that anything like 19xx’s manufacturing is returning to this country.
2
How long will we cling to this “we make the high-tech decisions, China does the low-tech manufacturing” paradigm?
When apple stamps “Designed by Apple in California” on their iPhones they’re saying “our phone may be manufactured in China, but we do all the smart stuff.” But is it true?
Most of the iPhone components, which are assembled in China, are also made abroad. There are lithium-ion batteries, the display, the camera. Each of these components undergoes incremental improvements (to Apple’s design requirements) and requires a foreign supplier to design a manufacturing line of ever-greater sophistication and efficiency.
Manufacturing is not as simple as assembly. To build a lithium-ion battery, you have to know how it works. And so China has been training ever greater numbers of engineers and scientists. Meanwhile, for all the talk of STEM education in the United States, job grow for engineers (other than computer programmers) is flat.
And we wonder why when we do try to build something it turns into a boondoggle? Compare China’s high speed rail to California’s attempt. Or take Tesla. Tesla may be a rare American-made success story, but their Model 3 production is bogged down and currently only a fraction of where it needs to be to meet demand. When the Chinese made Tesla competition makes it to California shores do you think people will pay twice as much for the Tesla brand?
11
The detailed engineering (which is 70% of the engineering hours) for Apple products is done in China.
12
Population growth and ecological devastation are the driving forces behind all human problems. But because our economic models are all driven by blind allegiance to "Growth", we cannot even see the realities involved. When people stop over-breeding we might stand a chance at solving the dilemmas we face. If we cannot face the facts of population pressure we will be reduced to fighting for the last crumbs while the ultra rich get to pretend for a little while that they're not affected by the downfall of humanity.
14
Yep. Global gag-order really doesn't help.
1
An odd article. If this essay is going to talk about economic trade AND globalization AND China, then it MUST talk about China's repeated and large-scale theft of all levels and types of IT technology from software to design to hardware and chips. MS, Google and Apple have been talking about it for 15 years.
Yes, Corporate globalization in the 21st Century is complex -- but a significant chronic problem is that China steals ideas, steals RandD and gets away with it every. single. time.
13
Globalization has been miscalculated. There is no fair distribution of wealth anywhere. The world populace is expected to do its part and consume. WTO in theory might work if the participants adhere to its principal agreements. Here's the thing, contracts and agreements are only as good as those that sign them.
10
The world prior to globalization relied on the most developed countries for developing the technologies, the medicines and medical techniques, the philosophical thinking that moved the world forward. The fraction of the world contributing to these improvements amounted to something like 10% of the world capability. Globalization has greatly increased the standard of living of billions of people who will now be able to contribute to that growth. We need to watch the growing countries of the world and encourage them to make these contributions. Look for the development of new medicines, new technologies, and new ideas from this growing capability in the world. We want to see China developing new medicines rather than producing medicines already discovered in the West. We want to see Mexico developing new engineering techniques in addition to mimicing the methods developed in the US. This is the future that is being opened up by globalization. I see it beginning in the huge numbers of foreign students in US graduate schools. I see it in the globalization of scientific research as collaboration in science is far ahead of our political connections. The typical scientific paper today is produced with inputs from several countries. I am reminded of the movie, "The Martian", where the American mission was saved when China sen the material into space to save the mission when a US rocket failed. We need to spread that collaboration philosophy throughout our lives.
4
To paraphrase a LOTR character, "The age of man is done. The age of the robot has arrived!" As I reminded a friend whose dad worked at one of U.S. Steel's behemoth mills here in NW Indy, as he did himself for decades, Trump may actually cause an uptick in steel and aluminium production here in the USA. But the days of 40,000 people working shifts at one mill are gone past recall. Now it's up to robots and artificial intelligence to meet production goals. The mookie guys who used to call us eggheads for going to college and who bragged about their union paychecks are dead or becoming dinosaurs...
8
College leads nowhere for many except for hugely burdensome student debt.
1
Why do the economists start their graphs in the 1990s? I remember the 70s deindustrialization of the Great Lakes cities and the farmers' failures in the mid-west. When the steel mills and auto factories were laying off people and insisting on two-tier, we were told that Americans had to work cheaper. Companies built factories across the world so that if a strike occurred in one country, production could be geared up in another.
This the same resentment that was behind the Wallace campaign and led to Reagan.
The next economists will recognize is that illegal immigration burdens already impoverished communities.
Globalization would be great if it meant uniform labor standards and environmental protections. Instead, all it means is a race to the bottom.
15
It's not just manufacturing jobs that can be moved anywhere that's willing to do it for less, services and intellectual property can/will be developed anywhere too - Hollywood isn't the only place movies can be made. The globe is feeling the pressure to head towards a common standard of living amongst all countries - which is better for those below the mid-point today. The only thing can't be transferred without compensation to the country that holds it today are natural resources. At least not without a military fight.
3
I think the best way to understand this issue--and parallel issues like the rise of right-wing, nativist "populist" movements like Trumpism--requires first abandoning the pundit-driven instinct to look at what we are going through strictly through the lens of recession recoveries over the last 50 years or even post-World War II.
If we look farther back--at economic recoveries from global economic contractions--on the scale of the Great Recession and the Great Depression before that--to the "Panics" of the 19th Century--what is revealed are events far closer in appearance to what we are seeing with Trump in the U.S., Putin in Russia, their ideological wannabes and the discontented and economically displaced populations who support them.
What's driving globalization is a global population that is pushing the limits of the planet's carrying capacity.
What's driving the backlash is NOT a reaction to those limits--it is lingering discontent borne of a passing economic calamity.
The real question before us is whether or not we can move through and beyond that discontent and dislocation without resorting to military conflict on a global scale--as was the case after the Great Depression.
6
I spend a lot of time in Japan each year and admire the way they have resisted much of globalization in their available products. They pay more for fruit and vegetables, and most of their clothing. What they get is higher quality products all around. I could care less if I can't buy cheap Chinese goods from Wallmart that wind up in landfills or produce that's grown without reguard for the enviorment. We should produce trade laws that benefit the US first. Cheap has a cost.
26
Low price does not mean low quality; and high costs do not guarantee high quality — e.g. the US healthcare and the majority of US education, telecommunications, and infrastructure, etc.
8
Um, that's not because of the free choice of the Japanese consumers, but rather because of protectionist measures by the government and other government actions that are highly repressive of alternative distribution chain models. The irony is that it's *Walmart* as a distribution method that has been far more disruptive, long term, to American employment and wages than Chinese exports of textile goods. Walmart is an American invention. Amazon is an American establishment.
3
And Alibaba is a Chinese establishment that copied Amazon........
It's there one kind management? One kind of government? One way to drive? One way to sing?
There is more than one way to globalize. Arguments that offer two choices, globalize or don't globalize, are misleading, purposefully or not. And Trump's antics, which are not serious even if they are dangerous, will change before you can criticize them.
But the current system of globalization puts global corporations and the billionaires that own most of their stock in the drivers seat, with workers as little more than cogs (not treated half as well as machinery), and democracy as an inconvenience to be bulldozed though as quickly as possible. While we are warned about the dangers of government decision making, a few thousand people own half of the world's wealth and makes 90% of political donations. The economy is centralized, out of the reach of democracy
If you don't want globalization to be reversed by demagogues and their followers, we have to find a way to use democracy to globalize, instead of using Fast Track shortcuts to globalize in secret hoping the workers don't notice.
Doing things the right way takes longer, but it doesn't result in so many major disasters and back tracking.
We can have a global economy, but if it isn't designed to make life better for most people, most people will reject it.
A Human Economy invests in children, workers, and those who can't work to. It invests in education, healthcare, infrastructure etc., and leaves capital to markets.
Human Economy
11
Doing away with globalization by itself is not going to stop the rich from getting richer at the expense of everyone else. Globalization has just given the rich (especially in this country) additional ways to make more money. If the economies of the world are fragmented then the rich will just go back to the old ways of gathering wealth, still at the expense of everyone else. If the 90% are going to recover, economic and social policies are going to have to change, no matter what happens to trade.
9
Tariffs are one of the few mitigation’s left that could slow down the widening inequality gap.
Those who own companies, including stocks and mutual funds, are the minority in America.
Companies like globalization, they get their raw materials cheaper, and have larger markets to sell in.
But globalization also exports jobs to countries with cheap labor that lack laws protecting the rights and safety of workers.
So, if you get your income from a company that thrives with globalization, you have more money AND you can buy things you want super cheap; but if you are a worker whose job got exported, you don’t have money, period. This is why the inequality gap gets wider.
Globalization will help more people in the US get jobs; the people who already have incomes will have to pay more for their stuff. It is a tax, but not a very progressive one. Higher income taxes on the super rich would also help, but the money should go to building jobs for working people, such as infrastructure.
3
So you are proposing what?
So the damage to manufacturing is up and done so it is OK if we lose the competition on advanced technology, renewable energy and space as well?
The U.S. is so disorganized that it cannot even verbalize a coherent economic strategy let alone actually win.
8
Globalization is essentially trying to rise the 3rd world up to the level of the 1st. It tries to enforce the same trade practices for workers and businesses alike.
What has happened is the laws ( trade pacts ) in the 1st world allowing those businesses to ship ALL of the jobs into the 3rd ( for in some cases minimal % increases ) and to invert ALL of the profits. ( allowing for skirting of the taxes )
Close the loopholes and globalization is a good thing.
6
Mr. Irwin presents a well grounded and reasoned piece except for one glaring exception. Politicians are notoriously behind the curve. By the time they decide to get on the 'band wagon' it's run out of steam. The one exception vis-a-vis China is IP theft and forced Tech Transfer which seems to be continuing. However, it calls for a coordinated response including the EU and Japan. Tariff is a blunt instrument, and as pointed out may result in significant opportunity costs for all concerned.
2
All of this comes down to a couple of simply ideas: US companies need access to a potential Chinese market of 1.4 billion consumers. And America needs to make goods and services that those people want, and make them better and more efficiently through our inventiveness. Excelling rather than punishing holds the key.
8
China subsidizes its industries. We don't. It's not a level playing field.
But ignoring that aspect, if you want U.S. workers to compete in inventiveness, we have to invest in humans. We are found the opposite. We just gave a $5.5 trillion tax cut to machinery. Machinery doesn't invent, yet.
We have to invest in education (a key ingredient), healthcare (to let people focus on inventing, and make it independent of your job, so quiting your job to invent doesn't mean losing care), and infrastructure (so inventors and inventions are not stuck in traffic, and so we can communicate about then efficiently--our internet is show compared to Japan, for example).
Machinery can help productivity, but it is humans that are productive. If we invest in machinery more than people, the factors of production as out of whack, lowering productivity.
The current globalization system demands slashing taxes, even though taxes pay for research, education, healthcare, adding infrastructure.
Slashing taxes to attract investment is bad for invention.
Invest in humans to increase productivity. They will invent the machines they need.
6
This is what we've been hearing for 20 years - and guess what? It doesn't work. Outside of a few products that China can't make itself (yet), like planes, or some agricultural products, China has blocked us repeatedly, stolen our technology, and favored their internal products over our often better ones.
I'm all for free trade, but trade with China is not free. It's not all black and white, but it is definitely lopsided. See: https://www.nytimes.com/2018/03/23/technology/trump-china-tariffs-tech-c...
3
I wish you were in charge of our (U.S.) domestic policies.
Light at the end of the tunnel folks. If keep going large corporate entities will soon obtain complete control over the global economy. Then we can achieve growth such as is compatible with continued monopoly profits.
It won't be too great but it will be the best possible outcome of our glorious system.
4
Whenever I see these articles on globalization, I hope they will say something insightful, or maybe even just factual, about outsourcing of white collar jobs. They don’t, and neither does this one. The stray facts I have been able to assemble suggest no fewer than 5 million white collar US jobs were outsourced in the past 20 years, but it may be many more than that. Also, US wages lost for these outsourced white collar jobs might exceed that for the manufacturing sector. Until economists start sharing a more well rounded picture of the effects of globalization, across the whole spectrum of labor, readers would be advised to treat their commentary as hypotheses, not conclusions.
22
Smart analysis. The slashing of "middle management" represents very good jobs that went away.
The results are mixed.
2
The problem is not just losing jobs but losing know how. Electronic items made in China etc cannot be made in the US we have lost the know how to manufacture them. So what if McDonalds can sell more burgers or Hollywood more film. What happens if one of these overseas producers decides to stop manufacturing parts.
5
Yes, a country that doesn't make stuff is a hollow shell.
A service economy needs a manufacturing economy to service. Relying on exporting services is very risky.
3
Let me share how globalism has affected me.
Today, in The US, one can no longer buy a new small precision lathe capable of holding .0005" tolerance, and must hunt garage and factory closure sales for 30+ year old US-made examples that arent beyond repair.
In my industry the market is flooded with cheap defective offshore-sourced parts, requiring additional downtime to hand fit, or source leftover US-made new-old-stock. Because some parts are now made by a single company supplying the world, if that part is poorly designed then I must make the part myself.
Thanks to de facto open-borders, pay scale for my industry has been decimated, precluding employment that can pay the bills, forcing me to work for myself, for longer hours, and making health insurance very expensive.
Taking things up the food chain a bit, thanks to artificially low prime rates, I cannot get decent interest bearing instruments to hedge against inflation, much less build towards retirement, which leaves no alternative to a dicey stock market full of zombie companies, "quantitive easing" and valuation bubbles. And, because lending is prioritized for things like corporate stock buybacks vs small business capitalization I resort to borrowing from individuals instead of banks to grow my business.
So, I tend to think articles waxing eloquent about how great globalism is are in fact based around on-high dictums attempting to coerce us into supporting a broken status quo that enriches a few at the expense of many.
97
Your comments are right on target. And don’t forget the cascade of skills from engineering to metallurgy that have been lost as our ability to make important things has collapsed. It’s not just about loss of manufacturing jobs. It about loss of the entire chain of skills that is needed to invent, innovate and improve things needed for an industrial society.
28
"Today, in The US, one can no longer buy a new small precision lathe capable of holding .0005" tolerance...."
A quick search of the web says differently. I'm sure a search of trade publications would find more.
This is heartbreaking. Walmart et al. have destroyed much of our manufacturing -- look to them for why U.S. globalization policies only benefited large corporations and the rich.
Another sad consequence: losing the know-how, the brain trust in the United States.
I work in a "new" industry -- industrial biotechnology -- where it's important to learn from experts from "old" chemical industries. I can still find some experts with 20+ years of experience, but they are retiring. Mergers ("rightsizing" R&D teams), off-shoring, and lack of funding for science is pushing expertise out of the U.S. I'm not holding my breath that the current administration will be forward-looking in support for green industries -- certainly not the way Germany, the Netherlands, and other countries have been.
So I'm learning German, slowly, as it's easier for me than Chinese.
History is completely against Mr. Irwins argument.
China (to use his favorite example) started out exporting very low tech products, like textiles. Then they moved up into low-mid tech products (toys, plastics, tools). Then into mid-tech (TVs, electric scooters, appliances). Then into mid-high tech (computers, cell phones, machine tools).
Now, China is poised to enter high-tech exporting. Medical devices, drones, robots, software. In addition, its protected internet companies, Alibaba, Baidu, etc are branching internationally and may displace the Americans.
In summary, the pain is about to intensify. Not ease as Mr. Irwin claims.
26
When talking about history, it's very important to have context. If China had begun in the 19th century, you might have a point. Conquest and subjugation by the European powers intent on selling drugs (opium) to the Chinese and social stagnation did place China at a disadvantage in the world economy. If we look back farther in China's past, however, we find a state that was scientifically and industrially advanced.
The Chinese/Mongolian/Jurchen state has a long and complex economic history.
3
the reason they were able to move so quickly is thanks to Madison Avenue, the once advertising capitol of the world, and "keeping up with the Joneses". cheap goods, the desire to own everything--you left out the most important part of this argument---PEOPLE.
Globalization does not fix greed and cronyism. The bulk of all monetary benefits of NAFTA in Mexico have gone directly to their richest 1%. Is that a positive?
To ship my American made products to China where all these new customers are, we have to establish a company there with a local partner and local distributor who do nothing but take a cut for being the local partner. Is that the free trade we want?
Yes, tech has made it possible to do new things. But when considering the environment what America should be focused on creating factories that produce apparel and other low wage products on demand. Rather than having low wage countries producing Ridiculous amounts that only go to waste. Apparel is second only to oil in carbon foot print.
The US shouldn’t lowering our democratic values to justify our authoritarian trading partners such as China. We should be self sufficient and constantly reaching for higher standards of living and economic prosperity for our citizens and remember our greatest export that will benefit us the most should be democracy not products.
15
I'm sorry but there really is no way to say the the benefits of NAFTA have only gone to the 1%. This hypothesis that the benefits of trade only go to the wealthy is not supported by much and would be hard to measure. Other policies effect wealth inequality much more, like progressive taxation. Free trade creates wealth and builds the economy, how that wealth is distributed is another matter and depends on other policies, in counties where domestic policy is regressive and favors the wealthy then most of the benefits of economic growth will go to the wealthy, including those from trade but by declaring free trade as the cause of wealth inequality the socialist minded are throwing the baby out with the bath water.
Also pretty sure coal, cement, and steel industries are all bigger green house gas emmiters than appearal.
It's hard to understate the terrible environmental impact of apparel ("fast fashion"), from pesticides and water-use of cotton to the poisoning dyes being dumped in rivers all over the world to the plastic fibers contaminating our oceans. I don't know if the GHG impact alone is as bad as cement (a durable rather than throwaway product), but I do not doubt that the overall environmental impact is just as bad or worse.
Even though inherently a rich idea, and with evidence of proving itself beneficial to the world economy why globalisation in recent years has gone awry is because it was conceived in a hurry by the rich developed world during the Washington consensus and pushed down the throats of the poor developing countries that were not prepared for it fearing new colonial conspiracy of the West against them. Now see the role reversal- the champions of the globalisation, the West, has turned protectionist while the reluctant developing countries are going wholehog for the globalisation. Again, the backlash against globalisation is primarily due to the fact that the globalisation project was pushed without building global consensus and even without the equitable rules that could have prepared the level-playing field for the nations while ruling out the possibilities of inter-nation and inter-nation disparities that have produced the discontents of globalisation in different parts of the world. In the face of current anti-globalisation mood, it is difficult to restore the old appeal of the globalisation idea.
7
Very interesting article and probably on the mark. I made good living traveling the world and have done very well. However, I am well educated and prepared myself to benefit from the global economy. There is a large number of people in the Western World who only have a high school education. They do not want to go to college and only want to have a family vacation in the summer, deer hunting in the fall and shopping Walmart in-between. These people are seeing their living standards stagnating or declining.
7
You have traveled the world and you "are doing very well".Good for you.What is your carbon footprint for future generations?
1
This is a really good topic, thanks, though I would argue that the inherent disparity in wealth that "developed" nations enjoy compared to "developing" countries suggests that we have a long way to go before any reliable international leveling off occurs. I would also disagree that rollbacks in "forward" movement are bad because rollbacks enable cultures to process, emotionally and culturally process, the changes that are being wrought on them through globalization.
Its all healthy: globalization is healthy, and so is anti-globalization. We can't focus only on immediate economic gain and ignore the very real and functional process people need to go through to modify their self-conceptions while preserving their cultural identities. In other words, accommodating globalization takes time. The rise in international terrorism, for example, is evidence of globalization being pushed too far, too fast.
6
Of course- globalization is great! We just didn't give it enough time.
Who cares about the millions of people who are suffering now?
Globalization has been a disaster for our species and the entire planet. It has allowed our population to sky-rocket. It is leading to the total destruction of the planets ecosystems.
And what have we gotten? Many people have risen from desperately poor to extremely poor. And millions of folks with good lives now live on the margins.
And we have achieved 7 billion people- with 10 billion in a short 32 years. Globalization will not repair the environment. It will not produce clean water. It will not make species less extinct.
It is time to rethink the way our economies work.
38
Globalization was massive wealth redistribution from the middle class to the world's poor and already rich.
21
It’s called a backlash because it takes awhile to corner people, then they fight back. What we have isn’t some small town cobbler retiring because he can’t compete with ‘Nike’. This isn’t trade in goods, it’s trade in labor. Companies trade for lower wage workers as a commodity the same way they once traded for slaves. Why pay decent wages when you can manipulate and corner people to work for scraps? Did anyone really imagine there wouldn’t be a backlash?
58
Yikes, that's a fascinating and probably apt comparison!
1
I see the point being made but the fact is too much damage has been done. The standard of living for an entire generation destroyed and now too much time has passed to undo it. I wonder if the millenials really believe their standard of living will rise.
7
"And it comes just as billions of people who have become integrated into the global economy over the last three decades are starting to become rich enough to become valuable consumers."
Valuable to whom? A huge global class of US-style consumers equals not only the final profit pool for the Ponzi scheme that is laissez-faire capitalism, but also complete and irrevocable environmental catastrophe for humanity.
Touting infinite economic expansion without a single reference to the limits of the lived environment is essentially peddling snake oil.
27
The problem is the distribution of the costs and benefits. Maybe if the people benefiting from globalisation want to see it continue, they need to figure a way to make sure its benefits are more broadly distributed. Otherwise we get the populist convulsions we're seeing throughout the developed world.
17
Back in the 1980's I recall traveling though New England witnessing the abandoned textile mills (circa early 1900's?). This pattern has been ongoing since Marx stated capitalism gravitates to the lowest cost labor. My history professor (1960s) stated labor unions solved this problem.
13
As others here have observed we have not all shared equally in the pain of globalization or its rewards. It has created a global 1% to say 10% that have reaped most of the benefits and these people have taken over governments and sheltered their incomes from taxation that benefits the other 90% to 99%.
23
"No one should be surprised...a backlash to globalization" is a rather dramatic reversal after decades of cheer-leading.
“major costs of globalization have already been borne” implies that there will be no costs associated with this new era of globalization. Just benefits. So the rising tide will lift all boats. No, seriously, this time it really will.
“rapidly expanding global middle class…” Outside of China, where is this happening in a way that will be sustainable in the Age of Automation?
What is America’s comparative advantage in this new era? What goods are we "good at producing” and will be selling to families of four making $19,000 a year that will create enough prosperity to reverse the decimation of the American middle class? You hint it will be good for Hollywood, Facebook, and McDonalds. How many American jobs will that create, and how will that not exacerbate inequality?
What happens when all products are services that are inherently information-based. Did Ricardo say anything about that?
“Global freelance labor” sounds so warm and fuzzy. But it’s a race to the bottom for the highly-skilled; everything from software developers to radiologists, who are the factory workers of the 21st century. This will actually be the tipping point to massive social unrest, when doctors are at protests wearing Guy Fawkes masks next to home health care workers.
Globalization failed. The only way to prevent unrest is if the "small enterprises" part happens, at scale.
26
I believe one American competitive advantage is our culture of creativity and innovation. It's imperative that we protect our IP. We should also support and encourage our young entrepreneurs and "creatives" with better social safety nets; nurture new sustainable industries with tax policies, small-business grants, etc.; and repair and enhance our nation's infrastructure.
This is the best analysis I have read to date. I lived it all. It brings us to the realization that the U.S. must now invent a method to confront China, rather than try to undue what exists. Otherwise, we won't just become the world's second power. We may very well become a Chinese colony. I remind everyone that China is not our friend. We are but a customer.
5
If America had retained the progressive taxation of the past (the tax structure that built the middle class), the pain of globalization would have been much less.
But Republicans continue, every chance they get, to make our taxes more regressive. It has never been easier to become a billionaire, but harder and harder to become a millionaire.
30
I agree that Republicans have made our tax structure more regressive.
But Democrats pushed for NAFTA (Bill Clinton) and TPP (Barack Obama).
The issue is guilt.......and both parties are guilty.
4
This is just a repackaged version of "just wait, we'll get those higher end jobs that result from China buying our stuff" argument. But Mr. Irwin, the Chinese are playing that game. The iPhone is made in China. Solar Panels are made in China. Our companies are forced to create those higher level jobs in China, not here. The Chinese have leapfrogged the process. The only thing they want to buy from us is our real estate, places in our top universities and equity in our technology companies. None of that creates good jobs in America.
31
iPhones etc are ASSEMBLED in china from parts from all other the world. When china starts designing and manufacturing the guts of the phone, then all bets are off. And that is why they insist that any US business operating in china turn over all their IP to Chinese companies - to get that technology so they can start their own advanced industry. Why companies agree to this is a mystery to me. Seems like they are cutting their own throats. I can only assume they feel the short term profits to the executive and shareholders are worth it to them. they get their millions and billions and then retire, leaving the mess to someone else.
19
The backlash against globalization, which led to a revolt in the US and UK and a drift to extremism in other places, was certainly driven in large part by the effects of trade. As the article says, that's all water under the bridge now and isn't going to go into reverse. Another effect of globalization is the increased mobility of people between countries. This certainly contributed to the backlash in the UK, as a result of free movement within the EU. In the US, which paradoxically has always been both a nation of immigrants and somewhat xenophobic, it was centered on illegal immigration. The cause of the backlash was essentially the same though; the feeling that "it's not the same country it used to be".
The effects of globalization on trade etc. will eventually settle down but the "people" effects are part of human nature and have been with us forever.
8
The logic behind globalization is quite reasonable in some ways but hasn't really panned out in others. Engagement with China may have kept costs down in the US and given us someone to sell govt bonds to but it has also put billions of dollars towards the development of a robust, hostile, military-economic complex which presents an existential threat to the United States and human liberty in general through it's spread of revisionist history, economic manipulation, espionage, bluster, and selective access to information. We need to stand up for our principles by beginning to de-integrate the two economies thus increasing our political and economic freedom of action with China. It will cause pain but we are just stuffing the wallet of tyranny and the funds are being spent against us.
12
When economists and politicians were selling the concept of globalization, they never talked about the fact that not only would millions of Americans lose their jobs with no replacement positions in sight, but that entire family based communities would be decimated. That it has taken until 2018 for the seminal work on globalization to tell us that our workers couldn’t, in fact, actually compete with people who make just cents on the dollar just shows how out of touch these “experts” are. Now comes the most recent round of economic theories with the usual graphs and stats purporting to show that the benefits of globalization (besides cheap things made in China) will inure to the US any day now. One wonders what hidden surprises await this time.
54
Regarding those decimated communities, while it's hard not to be sympathetic, throughout our country's history people have migrated, moved to where the jobs are. My own family has crisscrossed the US over the span of a couple of generations. But we have lost that dynamism of late--stats show the lowest level of crossing state lines in decades. I would love to see some studies on the reasons for this because I don't think economics is the only explanation.
1
But it wasn't an accident. They wanted to bargain American wages down.
1
It's the private businesses and corporations who pushed -- and benefitted from -- globalization: their bottom line benefits from the outsourcing of cheap foreign labor.
When will these types of globalization articles, even those which bring a new slant on it like this one, realize we live on a finite planet struggling with social problems? Ignoring the multiple effects of climate change and species depletion (incurred in part through globalization), or declining democracies and shootings at schools, does not make them go away. These effect economic welfare either directly or indirectly, such as flood clean-up costs and loss of ecosystem services, and declining social capital and trust which are fundamental if overlooked parts of it. Telling us how a part, such as consumption, is doing and how it could do better is not asking the right question.
8
The backlash was inevitable, given the disdain of the elites for those whose jobs disappeared
"I guess I should have expected that this (Pro Globalization) comment would generate letters along the lines of, "Well, if you lose your comfortable position as an American professor you can always find another job--as long as you are 12 years old and willing to work for 40 cents an hour."
Such moral outrage is common among the opponents of globalization--of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports. "
Paul Krugman , In Praise of Cheap Labor
Zero sympathy for those who lost their jobs, accusations of moral outrage.
6
Only a small, super-wealthy subset of the US population benefit from the enriching efect of globalization, e.g., the wealth gap. But our gridlocked political system refuses to give the government power to allow ourselves (the US) to educate our unwashed millions and install the environment and infrastructure of public finance necessary to accomplish this. In the meantime those at the bottom of our economic scale keep producing babies, babies, babies. Maybe our insistence on total Independence which worked so well in our historical past "ain't" gonna' work in today's global planet.
8
he presumption that the global economy (or economies) is at the point of booming and growing (now that billions are "rich" and ready to consume) and that the costs of the restructuring have already been borne is an assumption or assertion that remains to be demonstrated-- not a fact as the author seems to claim. Many economists (Thomas Piketty, for one) seem to claim otherwise or at least are uncertain unless reforms are introduced (like taxation of accumulated capital to insure some redistribution, or others one may think up short of protectionism perhaps, but for other reasons). This may not be the best starting point to make an argument against tariffs and protectionism, though.
10
Tomorrow is closer than you think. Peter Drucker* explains how it will differ from today, and what needs to be done to prepare for it (Nov 1st 2001)
The new protectionism
Structurally, too, the next society is already diverging from the society almost all of us still live in. The 20th century saw the rapid decline of the sector that had dominated society for 10,000 years: agriculture. In volume terms, farm production now is at least four or five times what it was before the first world war. But in 1913 farm products accounted for 70% of world trade, whereas now their share is at most 17%. In the early years of the 20th century, agriculture in most developed countries was the largest single contributor to GDP; now in rich countries its contribution has dwindled to the point of becoming marginal.
Manufacturing has travelled a long way down the same road. Since the second world war, manufacturing output in the developed world has probably tripled in volume, but inflation-adjusted manufacturing prices have fallen steadily. Manufacturing employment in America has fallen from 35% of the workforce in the 1950s to less than half that now.
The decline of farming as a producer of wealth and of livelihoods has allowed farm protectionism to spread to a degree that would have been unthinkable before the second world war. In the same way, the decline of manufacturing will trigger an explosion of manufacturing protectionism—even as lip service continues to be paid to free trade.
8
As has become painfully obvious, globalization's benefits are not evenly distributed. The main beneficiaries are global corporations who have no allegiance to anyone else, and who run roughshod over local interests or anyone else who gets in their way in pursuit of a buck. The economics "profession," looking down from their ivory towers, is so enamored with the theoretical "benefits," and is so eager to embrace globalization, that they can't see what's going on.
60
Redistribution is, I think, THE problem. In the U.S. every tax system, federal and states, is regressive. The progressive federal tax that, in the past, built the middle class, has been reversed since Ronald Reagan, and every time Republicans gain enough power. They did again last December.
We've heard that America's three richest own - like - half of the country. But, how much of America do the other billionaires own? - including foreign billionaires.
Wealth is not just getting enough to eat, it is also relative to how wealthy others are to you. I doubt humanity, as we have known it, can sustain ever increasing inequality, even if all are fed. Who, in the future, will be allowed to live for hundreds of years? Where will we put them?
24
“...globalization's benefits are not evenly distributed. The main beneficiaries are global corporations...”
Oh yeah, and those additional 2.3 billion humans who have moved from poverty into the middle class.
Free trade has been great ... for multinational corporations and the wealthy.
People seem to forget that Bernie Sanders voted against NAFTA and expressed deep concerns about free trade during his campaign. This isn’t just an issue with Trump voters.
With all due respect to economists, one of the greatest threats we currently face is income and wealth inequality. I’m not so sure that “a smaller pie divided more equally” would be a bad thing.
27
"Workers in American and Western European factory towns found themselves in competition with Chinese electronics assemblers, Indian call center employees and auto factory workers in Eastern Europe, Mexico and beyond."
Yes. And instead of US companies and employees - along with Congress - working together to figure out how to better compete, the reaction by most US comps was to go-get them some of that cheaper labor, and assorted regulations (worker safety, etc) free factories. All allowed by congress, who were being induced/seduced by bigger and bigger donations, and the handing off of critical legislative work to industry lobbyists.
If Trump actually cared about his core constituents, or the American worker in general, he would have assembled the greater minds who have been seeking to be heard about how the US can compete - instead of running off with his cockamamie, outdated ideas. Which are really just ego-exercises for him. If we get a bump here and there due to his tariffs, etc...he gets a win. A dynastic win.
Instead of an admission that the landscape has changed, its a denialist approach to resurrect mining and long-gone low-skilled factory jobs - that wont have any Phoenix effects on those in need.
Instead of serious investment in emerging tech, and services, we have a crew of old-school, outdated ideologues, touting their various fixes, that will fix nothing but a few select investors bottom-lines.
Coal? Only but a few will benefit from even a moderate bump.
17
This article is exactly right. We live in a global economy. It is NOT global competition, it is global opportunity. We have such competitive advantages as a nation, yet our leadership acts as if we are a second class power.
6
The short answer why it only now appears to be more apparent. Globalization negatively impacted the poorer section of the US (read NYT's being a steel worker liberated her, than he job moved to Mexico) a section that does not donate to political campaigns. It benefited the financial elites (that moved the factory to China) that controls both parties. The result was an increase in inequality . Given that the poor do not finance elections, it took, therefore, to work through the political system. The key feature of the last US election was that the two candidates that most excited the voters did NOT run on campaign contributions of the elites. Mr. Trump run on his own money and masterful manipulation of the press, Mr. Sanders on millions of small donations from the losers of globalization.
What is behind it :
In an world of free trade, the wages of those exposed to it must fall to the global average - that is way below the wages in the US. That will continuously spread to more skilled levels. Those who deny it need to think twice. China already surpassed the US in computing (it has a faster supercomputer than the US) and quantum communication (it has a satellite that use quantum entanglement for unbreakable communication, the US has none).
This will force the political systems in the West to adopt the same measures they have used for decades to protect agriculture : Tariffs.
23
TPP, despite having its flaws, had common labor and environmental standards. It was a counter to China and the free-for-all model of globalization.
Trmp's answer is to rely on tariffs, which has a poor track record as economic policy, and to China-ify the US. Loosen labor laws, environmental laws, undermine union protections, and drive down minimum wages. What kind of "win" will it be when we are the new China, people making $5/hour - or however low it needs to be to be cheaper than robots - manufacturing gewgaws for the rest of the world?
12
...But Neil you neglect to address the most important question that hangs over the whole issue of globalization - How do we replace the millions and millions of decent-paying middle-class jobs that have been sent overseas? Today, our middle class has shriveled and we've become a nation of have and have-nots. If at some point we don't address this condition, we'll threaten the economic and political strength of our country.
29
Some went overseas, but most were lost to automation. It is the wealth of the middle class that counts, not the jobs. Income inequality is the great threat. We increase taxes on the wealthy; publicly fund health care for all; increase access to education of all kinds; modernize the transportation infrastructure; treat addictions as a public health problem, not a moral failing.
18
The middle class has shriveled because every chance Republicans get, the reduce the top tax rate again. It was a progressive tax structure that built the middle class. Now federal, and all state tax structures, are regressive. The middle class is melting away as the ownership of our country falls into the hand of intenational billionaires.
It has never been easier to become a billionaire. But it is ever more difficult to become a millionaire.
6
In addition to the good comments by Joe and Tracy, I will add that the U.S. can make a strong effort to support relatively new and growing industries: green biotechnology, sustainable agriculture and food sources, artificial intelligence, etc. Some manufacturing jobs we can bring back, too, especially where quality and engineering count. Such thoughtfulness seems unlikely with this administration.
1
Globalization as carried out has been great for Multinational corporations, who have used wage and environmental arbitrage to create massive profit while hollowing out wages and employment in developed countries. Free trade and fair trade are not the same thing. For there to be free trade, there must be equivalent environmental, legal, and labor regulations and standards in place. One only has to look at China to see that this is not the reality. It is only a wonder to me that the "backlash" has taken this long.
32
A Long Way to Go
A nice overview but I believe we are only in the very first stages of a very long and complex process. The complexities of automation, for instance, might decimate employment in the least developed countries, a reason why China is shifting in to high technology as fast as possible. Manufacturing may become completely local and many manufacturing and service jobs may disappear.
Also what might become the critical factors in quality of life may be social fabric, education, quality of health care, moral values, sophisticated infrastructure, sophisticated political management, a and a proper balance between consumption, health, and intellectual and leisure pursuits. In this regard, the US model of democracy plus intense capitalism will face competition from other models and Americans will be challenged by others who have different perceptions as to what is important. So far, I would hazard a guess and say that in 200 years, people will look back and say the US developed an efficient model for raising people out of poverty - then other nations took it from there to raise humans to a higher, more sophisticated way of life. So, we had our important place in humanity's development and now others are starting to show us the way to something better. This is excellent, because we will gradually realize we are a World of people - not nations.
13
So just how do US corporations deliver these information-led services to rising Chinese middle classes? You can’t use Amazon but Alibaba is a towering presence. Google? Good luck with that but Baidu is everywhere. Facebook? Sorry but Tencent does a thriving business. And let’s not mention Western journalism outlets.
Globalization is paying benefits to the US? You read this and can only wonder what planet Mr. Irwin and the highly polished folks at McKinsey live on.
26
I always laugh at those who naively think America is going to sell services to the Chinese. How many Americans do you know who can speak fluent Chinese?
Great article and while there was real pain, we also outsourced lots of inflation and lots of pollution. We had a decade of stagflation before globalization which destroyed the wages of working class Americans. During the Clinton administration we had low inflation, a strong dollar, balanced budgets and a growing service economy with decent wage jobs. Technology will continue to create new jobs and destroy old ones. Having a world at relative peace, working together, with food, clean water, housing, rising wages and education is a basic necessity for global growth. Without it we won't have jobs and we will continue to waste our resources on war and death.
It's not a coincidence that we have a President starting a trade war who has busted the budget to increase military spending.
12
"A growing service economy with decent wage jobs"...........excuse me, the service economy provides part-time work with low wages and nonexistent fringe benefits.
3
Neil, one problem for US workers is that the GOP's mantra of low taxes and "government is the problem" has prevented government from stepping in, and playing the role that it must in the 21st century - that of a trampoline allowing everyone who wants to rebound from any job dislocation to do so.
The private sector has no interest in playing this role. It is only government that can feasibly play it, and given the entrenched influences insisting on ever lower rates of taxation, it will only do so if 'We The People' forcefully insist upon it.
We don’t merely need a welfare state here in America, we need an empowerment state – a state that makes it its business to encourage every citizen to be everything they can be. This will require access to affordable housing, universal health care, and flexible programs for life-long learning and job retraining.
Americans going forward should expect to retrain several times in a lifetime – and must be confident that when their times comes, the resources will be available to make their transition as painless as possible.
Government must also be prepared to put people back to work when necessary – and to fund the ongoing infrastructure upgrades that every advanced industrial nation requires. A 21st century nation deserves a 21st century transportation system and infrastructure.
To do all this will require a significantly higher level of taxation and an end to the foolishness that H.W. Bush originally dubbed ‘voodoo economics’.
22
Matt C. you had me till here; "a state that makes it its business to encourage every citizen to be everything they can be. This will require access to affordable housing, universal health care, and flexible programs for life-long learning and job retraining."
What exactly is "be all you can be"...? Oh,its a advert meme for the military. While the needs fulfillment (truly affordable housing, healthcare, etc ) are crucial to free-up people to pursue a life...the govt can only do so much. Govt cant encourage people, and for many people their "all" is very limited, and might be deemed unproductive by many of us. Then what?
We have to come to grips with the reality that many among us - dare I say a fair number of Trump supporters - want nothing to do with re-education, re-training, anything that means going outside their comfort zone.
Life-style protection is what is at the heart of many of the Trump supporters hopes. They want to have a certain material success, while working a low-skilled, dead-end job...that can truly only be accomplished thru heavy Gov't subsidy. They don't want to relocate, retrain,etc - unless there's a fixed gain at the end.
Trump promised them a Phoenix-like rise to their former glory. We all know he cant deliver, as no other Repub (or even Dem) ever has or will.
Any time a politician talks about having resurrection powers for the middle-class (esp. under-educated, low-skilled white males) - you can be sure they speak with forked tongue.
1
Very good points!
"Rather, everyone is both a competitor and a customer. With trade battles looming on the near horizon, the open question is whether the United States and Europe, having already borne the costs of competition with the developing world, will stick with open trade long enough to enjoy its benefits."
Mr. Irwin is correct in that lower value-added manufacturing jobs have largely disappeared from the scene in developed economies. Yes, China probably should be the world's factory for plastic injection molded goods like toys, housewares, sneakers, etc.
The problem is, China, as it has made abundantly clear, is not satisfied with the status quo. They want to make the world dependent on their goodwill for almost everything, including the high value-added products Mr. Irwin lists. Furthermore, these "enormous opportunities" Irwin writes about are illusory. China wants to be self sufficient. They have made this clear as well.
Should it matter that China's political system is so different from ours? I think it should. A big "selling point" for bringing China first into GATT then the WTO was how trade liberalization would lead to political liberalization in China. No one can seriously claim that has happened! On the contrary, Xi has consolidated power in the CCP and in the Premiership like never before.
The bloom was off the rose regarding China even before we got stuck with Trump.
"Engagement" apologists like Mr. Irwin are beginning to sound like stubborn Iraq war defenders.
23
If globalization is driven by "improvements in communications and shipping technology" and increased integration of "once-poor nations into the global economy" (certainly plausible at least), then it is hard to see how that process is existentially threatened if increased tariffs and regulation raise the costs of business here and there. For cross-border flows of goods, services, money, information, ideas, people, etc. to flourish does not require endlessly driving down costs. What it does require are clear and stable rules of the game.
But, try reading the mountains of legal jargonized fine print of the Transpacific Partnership, for example, if you want to get an idea of the opposite of clear and stable. And the most critical ingredient, public trust, is mostly conspicuous by its absence. And how could it be otherwise, with the unceasingly move to pile new agreements on top of old ones? Small wonder a confused general public widely assumes a rigging of the game for the benefit of large multinationals.
It is pointless to try to complain about the poor timing of populist backlash. After decades of mindless deregulation rum amok, the onus is now on would-be deregulators to show substantive value-added for the general public. If globalization is mainly a net benefit to the global economy (again plausible though it cannot cannot be assumed as a guaranteed verity), it is likely to remain so even without continual efforts to reshape the playing field in order to maximize it.
3
"But after adjusting for inflation, today’s average hourly wage has just about the same purchasing power as it did in 1979, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then. In fact, in real terms the average wage peaked more than 40 years ago: The $4.03-an-hour rate recorded in January 1973 has the same purchasing power as $22.41 would today."
All that wonderful increase in the standard of living in "developing/poor" countries has been at the expense of a reduced or at best, stagnant standard of living for the average American.
Worse, all those "developing/poor' countries that the author thinks are yearning to but American goods and services still have punitive tarrifs and trade restrictions that make the goods and services produced and sold by American companies operating inside that country so much cheaper than those same goods and services produced and sold by the same company outside those countires, like inside America, that the American workers end up not doing the work, or if they get the work, they must do it at wages that are reduced from previous years.
Free trade and FAIR TRADE are not the same. Fair trade would happen when neither country had tarrifs or trade restrictions and similar environmental and workplace regulations so American workers were competing to produce and sell on a level playing field. NAFTA & later "trade deals" did not achieve that. That ASIAN trade deal would not have achieved that either.
22
While I agree that wages have been relatively stagnant in the U.S. over the last two decades, the average hourly wage rate in private sector was over $26 per hour in January 2018. I think a bigger issue in hourly wages is the minimum wage where it was $1.60 per hour in 1973 which is equivalent to $9.35 today. The minimum wage workers have actually retreated in purchasing power given the $7.25 hourly rate
10
The "shock" may be over - although there is no guarantee of this - but there is no sign that the pain for US workers is abating. Has the trade deficit in goods, now about $800 billion, begun to shrink? Have the old jobs come back or have new ones appeared? The answers are all no.
Globalization did not go the way that experts in the US expected - unless it was their design to outsource all the jobs and prevent wages from rising in this country. They promised benefits for everyone from the beginning but there is no sign even that GDP growth has been improved. Why should anybody trust their new forecast (if it is not just Irwin's pipedream)?
Too bad that Trump has been left to do something about the globalization problem - he will probably bungle it. But at least he has been appearing to care about the problem and may very well reap a political benefit. The supposedly liberal MSM and economists are clearly concentrating on preventing any change to the way globalization has been carried out for the benefit of corporate profits and for reduction of wages.
29
This is an important article, because its point is correct and seldom made. Growing worldwide prosperity is good for us, and China is a good example.
As long as China was basically a poor country desperate to rise above it, no amount of trade openness was going to change the balance of payments. That’s no longer the case, and further Chinese growth is so deeply intertwined with the health of western economies that we stand a good chance of establishing a kind of global order that hasn’t existed before—including issues like working conditions and environmental concerns. We just have to avoid blowing it with trade wars and abandonment of international institutions. I’d like to believe the current spat is mostly a publicity stunt, and that the real movement will continue.
3
Mr. Irwin makes some good points, like how developments may unfold in fits and starts (abruptly even). I think there is some truth to this too on the whole: "Rather, everyone is both a competitor and a customer."
And in general, globalization "shouldn’t be viewed as a perpetual as a perpetual onslaught" (I agree with this).
... But this article, likes others, seems to largely ignore the phenomenon of neo-mercantilism encompassing an array of policies around non-tariff barriers, administrative guidance, pursuit of intellectual property/technology absorption, SOEs, capacity expansion, etc. And such practices have been pursued by various actors over the past 50 years. And I am not certain those types of policies will go away anytime soon unless confrontations/disputes crop up?
Otherwise, selling services and products that don't fit the old hard goods profile have been played up for decades now (since the 1980s - think Megatrends). Frankly it remains to be seen whether those sectors effectively compensate for the impact in changes in production/trade, especially when export drives and moves up the value chain (to components, more sophisticated technology, software, etc.) are pursued by neo-mercantilists.
Neo-mercantilism has been the big elephant in the room that has disrupted much theory, and warrants more attention in these discussions/forums in my opinion.
1
I think we all recognize that some of the effects cannot be reversed. So I guess that means we cannot question any future changes or mitigate the threats which have developed as a result... it might cost someone a few bitcoin.
Globalization advocates imagined that it would "civilize" the developing world and instead we created more threats. I can't wait for the Russian hackers to shut down the power grid and extract ransom.
Now that we have empowered and enriched a class of predators and authoritarian governments with no interest in things like free speech and tolerance, I suppose it really is too late.
Oops. I'm sure it will all work out.
18
One of the reasons there are more threats is we stoped educating our citizens and instead decided to export weapons, training and war to trade for oil.
12
Globalization is a corporate thing. The backlash is a people thing. The so called free trade rules benefit corporate profiles. Not people. That is how the rules were designed. The cost of so called free trade has been the hollowing out of the American middle class which until Trump, had no voice in the game or help from either the Democratic or Republican parties. The backlash is long overdue and welcome IMO.
51
Trump is the 156th wealthiest American in 2017 (Forbes 400), well among the top 1% owning more wealth than the bottom 90% in the U.S. It's a stretch to assert that he is now pushing for redistribution of his "corporate thing" to the "people thing" IMO.
7
It was never globalism that hollowed out the American middle class, and Trump - self-proclaimed billionaire and son of a real estate tycoon, has never been a voice for anyone but himself. A iPhone built by robot hands in Nevada won't make healthcare any more affordable than a robot hand in China. Your $600 extra a year in tax refund won't pay for one day of dialysis or one semester of college (but who needs college, right? We will all magically be paid $80,000 a year for assembling parts in an air conditioning factory because globalization will be dead.)
You are barking up at the wrong tree, and putting your faith in a con man.
1
The only thing that has been globalized is no-rules trade, "super-capitatlism". It has benefited the wealthy and the global corps., as well as created a new middle and wealth class in China.
Justice, safe working conditions, human rights, product safety, environmental protection; have Not been globalized. In fact its been a race to the bottom.
78
The benefits of the first wave of globalization (1990-2007) went to two groups - the 0.1% and the very poor in third-world countries. The burdens fell on the middle class of the developed countries.
In the United States and Western Europe this resulted in (a) the hollowing out of the middle class, (b) an increase in inequality, and (c) the rise of right-wing politics.
Mr. Irwin is correct - we can't put the genii back into the bottle. But we need to find a solution, now, to the problem or we will live in a world where Trump is considered a moderate.
122
What happens when our service jobs are outsourced to other countries? Customer service jobs already have been why not IT, legal, medical, engineering, etc. If globalization gave rise to Trump, what will the further outsourcing of service jobs lead to?
8
Look at the service jobs that have been outsourced to other countries: IT, radiology including X-rays and MRIs) engineering, financial services.
Medical tests such as CT, X-ray, MRI can be and ARE BEING sent as digital packets to Malaysia and other Asian countries. How many doctors who practice in the USA but who are citizens of other countries own the businesses that look at the radiology tests - who bill Medicare/Medicaid for those tests?
California has a huge number of these doctors - who become fabulously wealthy in a few years, then return to their home countries.
Globalization gave rise to Trump......but globalization has also given rise to leader after leader in Europe.
Globalization is not an American problem. Globalization is a Western World problem......and not only is the backlash not going away, the backlash is spreading.
By the way: IT jobs have been moving to other countries at a rapid rate. Medical, including radiology and drug manufacturing, have been moving. Engineering is moving as well, along with finance / insurance analysis.
Send your son or daughter to technical schools: let them learn how to work with their brains and hands. The USA doesn't need the educational product of liberal arts majors, who work with their brains and mouths.
Excellent article providing valuable insights. Reminds me of the PBS Frontline Documentary of 2004 "Is Wal-Mart Good for America?".
The American consumer, relentlessly shopping around for lowest prices, has put the American worker out of a (manufacturing) job. And politics have failed to soften the fall and facilitate the economical transition.
Nobody else to blame. Certainly no far-away, hostile foreign power. Don´t follow this red herring
17
I think it would be more fair to say that companies did the relentless shopping around the world for lowest cost production in the late 1990s and 2000s. Earlier, one could say American consumers relentlessly shopped for products offering good value for dollar that were brought to their shores - notably the Japanese products in equipment, automobile, consumer electronics, etc.
Otherwise, there had been the phenomenon of neo-mercantilism accompanying the development of economies in East Asia, notably with Japan from the 1960s to 1990s, then Korea and then the PRC to this day.
5
The companies that "did the relentless shopping around the world for lowest cost production in the late 1990s and 2000s" devastated the vast working class of the USA........and politicians aided and abetted the devastation.
Company after company shut down after NAFTA passed in 1994. Town after town, county after county, and state after state suffered job losses as manufacturing plants were closed, with the means of manufacturing (the equipment) was loaded onto 18 wheeled trucks and moved to Mexico and other Central American countries.
The USA was weakened by the acts of politicians and billionaires. But the Mexican working class didn't prosper because the means of manufacturing moved into their towns. Their wages didn't rise, and they had no fringe benefits.
The benefits went to the politicians and the billionaires..........
3
You mention the search by Americans for good value.........Japanese products in equipment, automobile, consumer electronics, etc.
What you don't mention is the number of Japanese and other Asians who visited the USA during the 1950's and the 50+ years after that hugely productive and creative era for the USA. They visited manufacturing plants across the USA.....photographed and copied the equipment and the products.......then returned to their homes and built equipment and began to export similar products to the USA.
I think it would be fair to say that American companies were naive in allowing those visits. American designs - intellectual property - were stolen.
It would also be fair to say that American companies either built plants in lower-wage countries, or contracted with government-owned-or-subsidized plants in the lower-wage countries to build products for the USA. Once the plants are built and products are being made, copying is a piece of cake! No need to spend millions on design and development: just copy.
Think of the 'Japanese Miracle' - the manufacturing system attributed to the Japanese. Then read how the USA sent one of its best engineers, Dr. Edwards Deming, to Japan after the end of WW II. The generous Americans taught and funded the Japanese Miracle.
Neither Japan nor East Asia or Korea and China created their production-based economies on their own.
For years, we've read about the effects of globalization summarized as "overall benefits," usually followed by a statement that some people experienced a small loss of wages.
Now we read that it has had "devastating effects" in parts of the US, but that it's too late to do anything about it.
Why have those devastating effects remained undiscussed for so long?
98
I have copies of comment after comment I posted on these pages about the devastating effects in my town, my state, my area.........because I live in one of the areas that lost thousands jobs. I know many people who lost jobs that paid reasonable wages with health insurance and a retirement plan.
Your question should have been "Why did the Congress and Presidents not just allow this - why did the Congress and Presidents encourage this?". Not only did the manufacturing plants shut down, the companies that shut them down got tax breaks for moving jobs from town after town, city after city, state after state!
Wall Street prospered........at the expense of Main Street. And as Wall Street prospered, so did lobbyists and politicians. There are reasons why zip codes in and around Washington D. C. are among the wealthiest in the USA.
21
it did not fit the narrative of large news organizations like both Fox and CNN, who are world wide purveyors of news with little worry about blue collar or grey collar (IT related) America. The wine and cheese crowd in the media centers loved it and now are reaping the whirlwind
2
Because they were gas-lighting people until it was too late to do anything about them.
1
All those comments that are anti-trade probably don't come from those who travel to other countries. The Chinese have opened large textile factories, employing thousands, in Nicaragua, and are investing around the globe, as US companies used to. Highly-skilled village craftspeople in Oaxaca seek broader international markets for their products to support, not up-end, their way of life. The problems raised in these comments stem from our failing social/political/economic policies, not globalization. Scandinavia and the Netherlands have been the most globalized of economies for a long time, and have neither high levels of inequality nor a left-behind working class. Having experienced greater globalization in the US more recently, what have we done? Passed tax cuts for corporations and the rich, threaten to destroy the minimal safety net, and work people up with a trade war. It's our backward policies, not trade, that is the cause of our discontent, but it's always easier to blame the foreigners.
221
The problem is that globalization for the US has turned out to be for the purpose of outsourcing jobs to reduce wages and increase profits. The other countries mentioned have overall attitudes which are not directed towards corporate profits, and this applies to international trade as well as domestic policies.
37
Perhaps you might want to look at Forbes' list of the wealthiest people in the world.
One of the top five wealthiest is Carlos Selim Helu, Mexico. You'll find the world's wealthiest people in country after country, including China, other Asian countries, and the mid-East.
An excellent summary. Many thanks. I would only add that the result of China's accession to the WTO was to rearrange some of the 'furniture' in America's trade picture, but not greatly affect the momentum or direction of its trade deficit, which was already vast.
And, despite what we've been told, China's is not (and never was) and export-led economy. It's less dependent on exports than Canada, for example, and only half as export dependent as mighty Germany.
2
May depend on the definition of "export led" but seems the leadership of the PRC were quite focused on exports, and hence pursued an array of policies that could be deemed neo-mercantilist for several decades now. In the 2000s, up to the Great Recession, the US was a very important export market of first resort, with net exports directly providing a significant contribution to grow, let alone the knock on impact that domestic exports provide to local/regional economies, in developing industries, skills, bringing in capital, etc.
`
If you look at World Bank data on exports of goods and services as a % of GDP, estimates on China's figures reach 37% in 2006, up from 18.5% in 1996. Considering questions about GDP figures coming from the provinces, its possible those percentages in the 2000s could have been a little higher.
`
As for the US, the trade balance in goods started noticeably worsening around 1998, but really deteriorated after 2000, in the 2003 to 2008 time frame, reaching and exceeding $800 B then - seemed more than rearranging some furniture.
2
Mr. Irwin, in other words it was o.k. to throw millions of working class Americans,( making garments for instance, allowing Ralph Lauren a billion dollar auto collection), under the bus for the last twenty years as long as we protect “ intellectual rights”, those in the movie making business as well as K.F.C. and McDonalds. Glad we’re out of the latest agreement, it like N.A.F.T.A. does zip for Americans left behind, but from the comments I suspect not many of them are Times readers, any more.
53
I would like to add to this comment that in the hey day of the garment district of New York where many thousands of our ancestors perhaps worked you would see The Times under every arm, a badge of honor and the crossword puzzles providing a means for recent immigrants to better their understanding of the English language, how sad that so many forgot where they came from once here pulled the ladder up not allowing others an opportunity to climb the ladder to middle class success.
2
"..everyone is both a competitor and a customer..."
writes N. Irwin.
This has the same naivety that led Western governments and businessmen signing trade agreements since the 80ies whereby the West was giving away capital, technologies and jobs to China, whereas Western countries were progressively lefty with increasing trade and budget deficits, growing unemployment and declining benefits, all this with no condition whatsoever required of China, whether for property rights, labor and environmental standards...etc.
China has well managed this gigantic give-away from the West, using Western capital and technologies to jump-start companies competing against Western ones, while using part of these foreign investments and related business activities to fund its steady military growth and its expansion into foreign territories (Xinjiang, South Sea), while threatening or occupying some of its neighbors (Japan, Taiwan, Vietnam, Philippines, Tibet, India).
The same goes with Russia whose agressive military, cyber and territorial (Georgia, Ukraine) expansion is funded by the West massive purchases of gas, oil and grains.
The short of it is that the West has practically committed suicide, led by cynical or incompetent business people and politicians, backed by naïve and dogmatic self-proclaimed 'economists' such as Mr. Irwin.
Sad, but these are the plain facts.
47
According to the "laws" of globalization western workers whose parents had decent-paying jobs waiting for them out of high school are now expected to rent themselves as "freelance labor located around the globe, and small enterprises doing business with partners around the world through the internet."
This is a great deal for the owners and a crappy deal for workers. Take Uber.
A study by MIT recently found that "(n)early three-quarters of drivers earn less than minimum wage; the median profit before taxes is $3.37/hour." And, of course, there are no benefits attached to this form of employment - Uber even fought to have the drivers not call themselves "employees".
This is exactly the sort of raw deal one would expect when the wealthy capitalists impose a system that they themselves designed to their own ends. They affixed a forward sounding name to it, and they have their media (after all, these same oligarchs also own the media) talk about "globalization" as if it is some benign, naturally occurring phenomenon.
The gist of the article is that the widespread discontent with this onerous system is misguided. Uber drivers really don't know how good they have it - the worst is behind them so long as they accept that their lot in life is to toil at a low wage, unbenefitted position for 14 hours a day.
112
Unfortunately there will always be people who yearn to return to a past era, and "The Way We Never Were." The attraction is visceral in that you knew how things worked, or at least you think you knew.
Science and technology keep changing the world and there is no stopping that short of a global disaster that eliminates all humans. Yes, there are displaced people all over the planet and human society needs to find a way to integrate them into what is really happening. Sadly there are many who continue to resist by pushing for a return to a past that is based more in old TV shows than reality.
We all live on this planet and we ignore others at our peril.
4
I disagree with your headline. We don't have to throw out the baby with the bath water.
Globalization is fine. We had it since the ancient Greeks traded in the Med. Sea and probably before that.
The only difference now is that is the biggest ever and truly on a global scale.
Continue globalization but address those pockets that are not fair and destructive.
One of them is farming out good paying blue collar jobs in America to de facto slave labor countries like India, Vietnam, Mexico etc. and too. lesser extent China. The western world is not the problem here.
We should impose fair, non onerous tariffs on these countries re jobs lost.
The idea is to bring them up to our level and not down to their level.
If done right, the small increase in price for goods here, we will greatly offset by people working.
Cheaper goods are no good in America if you don't have a job.
35
There was a time when "Made in USA" label on everyday items on the shelves carried cachet. No more. In the market place declining desirability is a death knell. Fixing this problem should have been a top concern for American business executives. But they picked the obvious and easier solution to produce them offshore. But that stage is history. Most jobs will not return to USA and if they do robots will take over.
There is one more potential retaliation tool in China's pocket if Trump & his sycophants continue to stir up trade war fever: Chinese boycott of American goods. Chinese leaders are loathe to use it but it had been used towards South Korea and Japan.
6
Advanced economies, by virtue of being more advanced in terms of communications and transportation, are more “globalized” than developing countries.
Quick comment: globalization happened during several waves of the colonization of America, Africa, and Asia. All the disruption already been made to these lands.
globalization is not the culprit. the culprit is that some people get 90% of the pain of globalization and others get 90% of the benefit. and anyone trying to correct that is deemed a socialist. when the needs of the population arent met, we get violence ( in this case starting with donald trump)
239
Well put. Mr. Irwin would have us all believe things would be peachy keen if we just let all those happy benefits of free trade we're finally going to see just roll in. The horrible break-in period is over at last! Now, everybody will be happy!
Nonsense. The ninety percent are still going to get most of the benefit. We need better social policy.
43
I think you mean pain, not benefit.
Everyone who buys Apple products, shops at Target, Walmart, K-mart, or almost any other retail outlet, or buys anything made with cheaper steel and aluminum from overseas gets the benefits of globalization. That is most people in this country, in case you do not realize it.
7
One of the changes is the advent of mass market tourism. Chinese tourists have overwhelmed tourist sites in Southeast Asia, such as Angkor Wat and Bangkok’s temples and threaten those in Europe—Rome and Florence as well as Japan’s Kyoto. When India’s millions of middle class start to travel internationally, the world’s tourist crush will be monumental.
11
What a vision for our planet: let's turn everyone in every country into consumers. Not citizens. Depressing. If we don't start seriously thinking about Universal Basic Income, the profit-maximizing, loss-socializing nature of late-stage Capitalism will lead to dystopia for all but the 0.01%
69
Have you done the math for Universal Basic Income?
1
The reasons that opposition to the TPP et alia was so loud and vociferous come down to two: First, the pact was shrouded in secrecy. Second: It failed to protect the Environment and Labour while rewarding only Capital. Most people recognise that fairly opening up the world's markets is good for them, and they know that pacts that aid and abet inequality are bad for them.
Factor in the obsessive greed of the 1% (or at least the part of the 1% that is willing to abet or support TheDonald and his ilk) and we find the anti-unfair trade forums usurped by anti-trade forums. That segue happened without a spotlight; the 1% ensured the darkness.
32
I'm curious - everything I read said TPP was supported by President Obama. TPP was deep-sixed by President Trump.
So what did you read that made President Trump guilty in TPP?
2
Looking at it from a purely American perspective, some of us are workers who have lost income due to globalization. All of us are consumers who are able to buy products cheaper due to it. Therefore, I see it as helping more people than it hurts, and therefore a good thing.
Admittedly, I am coming from the perspective of a retired professional. Were I working in a steel mill, I would probably see it differently.
5
The idea always was that cheaper products would offset lower wages. But, that's not how it turned out.
Think about it. There's rent, there's insurance, there's daycare, there's your kids' college education. Cheap flat screen TV's are not going to help with those expenses. But, it's certainly great for retired people like you and me.
4
Happy to see you admit that if you were working in a steel mill, you would probably see it differently.
But look at from the perspective of a taxpayer: while you were working, you paid for subsidized housing, food, health care etc. for millions of people who had lost their jobs.
And your country went deeper and deeper in debt, borrowing money to pay for the subsidies that your tax dollars couldn't pay.....because neither you nor other people in the top 20% of earners wanted to pay 50% to 75% of your earnings in taxes.
So at the same time the USA reduced the number of taxpayers by shipping their jobs to other countries, a substantial number of those former taxpayers became tax-receivers because they had low-wage, part-time jobs with no medical benefits and no retirement benefits.
So who was helped and who was hurt? I submit that more than 90% of the population was hurt. The only gains came to multi-millionaires and billionaires......and to people with government jobs.
Why government jobs? Because government jobs provide a sure path to middle-class lifestyles.
4
We wanted cheaper goods. We did not want to pay for them. Corporations wanted to maintain high profit levels without a loss in sales volume, so they got cheaper labor. That meant even larger profit margins than before. Result? 1% even richer, growing western reliance on cheap stuff, and loss of major source of middle class jobs. Lesson...you cant have everything.
54
Correction: "We want goods." We are conditioned to believe that we want cheaper goods, but fail to realise that we've actually been addicted to more and more "stuff"... Most of which is in the rubbish tip within six months.
22
Who is this "We?" And who is supposed to learn this "lesson?" As if you are the only adult in the room? The reality is that things are always changing, and those changes have to be recognized and dealt with. That part was plainly poorly managed. the people who should have been managing it are not the owners and managers of corporations. We cannot directly blame them for seeking to make more money. This economic management that failed is what politicians are supposed to do, and they failed us all. At this point "We" are left to react, not plan.
14
I tend to agree with you, within limits. Some time ago I made a substantial move, and it was horrifying to discover the
"stuff," the detritus, that one accumulates and keeps, to no apparent purpose. Yes, it is no significant burden to purchase or use so many things, but to what end? If true happiness was the actual outcome or result of so much buying we would know it already.
But everyone ISN'T competitor and customer. China has decidedly nationalistic domestic economic policies. Tencent, Weibo and Alibaba would have never happened if they had to compete fairly with Google, Facebook and Amazon.
Furthermore, while I am glad 2.3B people are no longer in dire poverty, US workers cannot fairly compete with nations that have no, or any respect for, labor and IP laws. Foxconn has dormitories filled six-to-a-room. Americans would never go for that.
All that to say (which really hurts to day), Trump might be right on this; like the author points out, we've gotten short shrift from China for 30 years. It's time it was addressed.
46
Trump is not right on anything. Least of all trade. The inequities within trade pacts are the problem, not the concept itself. We voters have failed to pay attention to these things and as a result, the 1% has bought more and more of our government since RMN took office.
When we fail to pay attention, when we are dissuaded from discussing politics at our dinner tables, we ignore the roots of democracy: Demos, the people; and cracy energy. It takes the people's energy, their work, for democracy to work. It can't be done continuously on automatic pilot.
12
"I am glad 2.3B people are no longer in dire poverty".
Yes, they've been removed from dire poverty and elevated to wage slaves who often must leave their villages/provinces, live in company dormitories (for a fee), work up to 16 hour days, and usually are "retired" by the employer if they dare become pregnant or at the age of 30 years or so, when their productivity declines - all for subsistence wages.
Research it - this is the norm.
76
Ed - and are they better off then they were before? If they were not, they wouldn't be leaving their substance farms to go into the cities to work, I suspect.
I'm a fan of globalization, however, when it cuts so deep that your most basic national security is damaged, it becomes a problem. For example, not having any ability to produce the goods necessary for your own defense or relying on a potential foe to supply replacement parts/building parts for your country could obviously be an issue. When it becomes an issue, it could be years/decades to rebuild the ability to produce. This is where globalization falls short, IMO.
15
This is a fair thought, but the world of automation, augmentation, etc., relies less on it, and is rushing over us at speed. We need less anticipation of past risks than we need to anticipate defending ourselves against the risks of the future.
5
I agree, but we have agencies that make sure we are crisis ready. This palaver from Trump about national security is just palaver. He tried the same thing with needing to support coal and nuclear power based on national security considerations, and FERC shot it down, 5-0. Really embarrassing because four of the five commissioners are Republicans, three appointed by Trump.
And, believe it or not, we still make plenty of steel here.
1
However this trade war with China does not address national security. It was a ruse. He only used ruse to bypass congress. He used executive orders under security premises to accomplish his goal of adding tariffs. You’re still just as secure or unsecure as you were two weeks ago.
2
Trump’s actions with trade and tariff policy is an effort to position the country to be competitive in this globalization of commerce. We all know that the jobs that left won’t be coming back, but also that new jobs won’t arrive if we don’t use what leverage we still have to maneuver to an advantage. This is exactly what China and the other rising (risen?) economies have unscrupulously been doing for 30 years while Bush, Clinton, Bush again and Obama stood still.
10
I find this idea laughable. TheDonald does not give a hoot about competition; he failed in most of his investments because he could sell, but not manage. Reducing competition is his aim. As it is the aim of Capital.
Look at Europe: The older EU nations have free University, national health care, etc., AND they compete in the global environment as successfully as the US does. All the US businesses want is to keep making their owners richer, they care not about the USofA or its workers.
19
Trump's actions with trade and tariff policy is the brightest light I've seen in more than 30 years. What a surprise: A billionaire who understands what the working class needs!
This country needs jobs. How many of our social problems - drug use, children raised without fathers to name a couple of major social problems - would subside with decent jobs available, jobs with decent pay and fringe benefits?
Manufacturing is the key. Give hope for a better future to young people. Mothers and fathers rearing their children, making mortgage payments.
Voltaire said, "Work saves us from three evils: boredom, vice, and need".
The USA needs jobs, jobs, jobs.
7
But his actions will not create jobs in the US. In fact it will create job loses. according to the Trade Partnership, although these industries might see a boost, the costs for industries that use these metals for their products would increase. Therefore, while the number of American workers in the metals industry could increase by an estimated 33,464 jobs, the decrease in other industries would be more significant: an estimated 179,334 jobs. This means that the net loss could total 146,000 jobs.
Two big problems with this sunny scenario. First, none of the newly emerging service export industries - information processing, financial services, entertainment, biotech - have any potential to generate anywhere the levels of middle-class jobs that manufacturing did. Second, while some of the effects of free trade and interconnectivity may be leveling off, the relentless increase in inequality they have created continues unabated, with no end in sight.
94
Reply to Larry in Richmond, VA
"First, none of the newly emerging service export industries... have any potential to generate anywhere the levels of middle-class jobs that manufacturing did."
Your argument is counterfactual. The US has a huge trade surplus in services and service employment accounts for 70% of all jobs in the US.
4
This is not completely true.
Yes, trade produces certain types of transportation and back office jobs associated with that flow of products but the higher skilled jobs in manufacturing are being replaced by lower skilled jobs in the service industries that pay less and have fewer benefits (if any).
The perception that manufacturing is low-tech and that service jobs are high-tech is not remotely true and has not been for 20 years.
There is a reason that real median wages have been flat. It is not simply a matter of people making the same money in the same jobs. It is a matter of the fact that mix of jobs in the U.S. has changed in a way that is decidedly negative.
Other countries are better at handling this transition because they do not see the changes as inevitable. They believe that is is possible to build the society that they want to have as opposed to the one seems to have formed by default.
Look Ahead, problem is a "job" as defined by those statistics is anything that is 20 hours a week for a durations of one month. For most, that isnt a job one can live on.
The working class are the ones revolting against globalization. More customers in Uzbekistan doesn't mean anything to an unemployed factory worker in Duluth. It is more expensive to like in America now, but the working class and much of the middle class have less. If we can't get their buying power back to where it was, they will resist globalization. This problem seems self evident to me, but it might also be impossible to solve.
28
Mr.Irwin may be correct that globalization is finally about to pay off for American workers but I find little evidence to support that. What I do see is communities laid waste by the elimination of jobs and the benefits of trade all filtering up to the top 1%. There hasn't been much for the now former factory workers apart from lower prices at Walmart, which is cold comfort if you went from a factory job paying $25/hour with benefits to $10/hour without. The new Trump tax bill will only exacerbate this
164
Agree.
We need to learn (teach ourselves) that it is possible to create economies within economies. The Amish do it their way. What other ways are there?
13
I'm not sure that comments like this aren't finding the wrong cause for what happened, and I think we need to be careful that we don't find a cure that kills the patient rather than helping him. Walmart's way of operating made a lot money, but instead of being distributed in some sort of equitable way to all employees. The Walton family, Sam Walton's heirs, have benefited mightily, now owning as much wealth as the entire bottom 40% of the population. It didn't have to be that way. We, the people, chose to go along with tax cuts that benefited the rich. We, the people, elected representatives and senators who refused to raise the minimum wage. The greedy in all economic systems can manipulate that system. The question now is what is the best way forward, not how do we return to a past that is gone forever.
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" .. There hasn't been much for the now former factory workers .."
Someone want to explain the wisdom of refusing to leave areas that have lost 80% of heavy-industrial jobs, like Rochester, Flint, and Detroit? Waiting for Bernie Sanders to be the next Henry Ford? Well, Sanders has no experience as a CEO, that's never going to happen.
Try something new. The status quo ain't gonna work.
3
One could argue it is natural that how people make sense of globalization changes over time. I think it is natural for democratic countries to implement policies that protect their less assertive peers in more oppressive countries from economic stresses that many would regard as inhumane. How to do that is still not entirely clear, but I would be surprised if broadly applied tariffs were the best place to start (if it is the case, I haven't seen a compelling argument yet for why.) It would make more sense to focus specifically on industries that have a track record of exploiting undemocratic (possibly even tyrannical) power structures in other countries.
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And 50's were the "wrong time" for civil rights protests the 60's for antiwar protests and the 70's for LGBT awakening. There can be, by definition, no right time for the plutocratic orthodoxy to be challenged.
“Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or both. The limits of tyrants are prescribed by the endurance of those whom they oppress.” - Frederick Douglass
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Just a quick comment. Two things (at least) happened simultaneously: globalization and the rise of wealth inequality. I understand that they are related, but I haven't heard Irwin or anyone else give a convincing argument that globalization requires a massive transfer of wealth from ordinary people to the most wealthy. Irwin observes that resistance to globalization is still rising even though globalization peaked a few years ago. He finds this odd.
However, I remember the GOP tax bill of 2017 and other signs that wealth inequality is still rising in the US and elsewhere. Perhaps Irwin's conundrum is simply evidence that wealth inequality is what is driving resistance to world trade, not the trade itself.
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Trickle down economics may work after all. It's just that without enough domestic protection, the wealth may go to foreign nations.
5
Exactly Grin. or as I put it, the elites can make as much money as they want as long as the guy on the bottom of the totem pole has a decent standard of living.
That is the issue imo.
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