Is Globalization Good?
I don’t know if there will ever be a final word on this argument. The Ricardian argument for comparative advantage feels right in the model, but once you start looking at the actual results of periods of globalization, it is troubling. Because what we have to be careful when we’re asking if globalization is good is who is it good for. Is it good for the world economy in aggregate? Is it good for workers or business owners or both or neither?
For me, I have called myself a Free Trade Marxists because for me my religion has long been summed up by the call in the last lines of the Manifesto: Proletarier aller Länder vereinigt Euch!
In the long term we have to have worker unity across cultures and languages and realize that the myth of national borders is just another form of bourgeois social control where we are angry at the wrong people. It is not the Mexican worker that is stealing jobs, but the owner of capital using the logic of capitalism to ship those jobs elsewhere or to even mechanize them away.
Because what is happening in the short term is that the benefits of globalization are spread thin. We as consumers are able to save pennies on our consumer goods at Walmart or Aldi. The problem is that the costs are spread in a much more chunky manner. If you work at the Whirlpool factory or live in the community that is supported by that factory and Whirlpool’s parent company decides to cut costs, globalization’s costs far exceed the reality of a cheaper consumer good. Your income goes to zero and you can’t buy that consumer good, no matter how cheap.
This disconnect has given rise, in concert with other issues, to economic nationalism reflected in the Brexit vote or the Electoral College victory of Donald Trump. What I’m afraid of is that these political actions won’t lessen the costs — there is no movement towards a large retraining or relocation plan. One of the key plans Trump has supported is lessening the so-called “War on Coal,” which is fighting its own market forces in light of a larger move towards cleaner energy generation. This is a move backwards. Then on the other hand there is a move to eliminate the benefits of free trade, in ripping up agreements. The hope is that these manufacturers will reshore, but the reality is that to rebuild factories where once thousands were employed will only have a fraction of that because of technological advances. And then you have to hope people are trained for your needs. This will raise costs for everyone and not be the panacea that is hoped for by the people who need jobs and have seen the productive capacity of their towns leak away.
So politically, globalization is a huge issue in terms of how we as an individual country react to it. I just worry that in pushing economic nationalism we will be throwing out the baby with the bathwater.