Is Globalization to Blame? | Boston Review

From Dean Baker:

Among the many myths about globalization, the worst is that the loss of large numbers of manufacturing jobs in the United States (and Europe) was inevitable…..

Globalization need not have taken the course it did. There was nothing inevitable about large U.S. trade deficits, which peaked at almost 6 percent of GDP in 2005 and 2006 (roughly $1.1 trillion annually in today’s economy). And there was nothing inevitable about the patterns of trade that resulted in such an imbalance. Policy decisions—not God, nature, or the invisible hand—exposed American manufacturing workers to direct competition with low-paid workers in the developing world. Policymakers could have exposed more highly paid workers such as doctors and lawyers to this same competition, but a bipartisan congressional consensus, and presidents of both parties, instead chose to keep them largely protected…….

Source: Is Globalization to Blame? | Boston Review

4 Replies to “Is Globalization to Blame? | Boston Review”

  1. Hi Colin, and Happy New Year.
    It’s a good article and well worth reading in full. Thanks for posting it. I don’t profess to understand all of it, but it seems to me his second last paragraph says it all.

    “As a practical matter, trade policy is largely dominated by the interest groups that stand to benefit directly, such as manufacturers seeking cheaper labour in the developing world. They got their way largely by wrapping their agenda in the ideology of free trade, which most educated people—including politicians, economists, and journalists—believe they must support….UNQUOTE

    Before I read that paragraph, the article created the notion that government made all this happen. But I seriously doubt any isolated government think-tank came up with the idea of globalization on its own. Industry essentially controls the US government, and industry would have lobbied, cajoled and lied their way into getting US trade policy changed to enable labour to be exploited in countries just gagging for it. India and Bangladesh, China and Mexico to name a few. It wasn’t to give Abdul a better standard of living, it was to maximise profit by paying poverty wages, and thwarting the tax system – a goal they have achieved so well no one knows where all the money is hidden.

    If government policy played any role in stimulating the drive towards globalization, you could probably trace it back to mismanagement of the union movement pushing for better conditions and higher wages. Painting unionists as communists probably didn’t help, but unions have a tendency to use thuggery to get what they want, while CEOs use lawyers and lobbyists. Guess who wins. Manufacturers of clothes, computers, furniture, toys, electronic gadgets, tools, steel, bicycles, cars etc, etc, simply glimpsed their destiny as world owners, and seized the moment.

    The idea that there is some altruistic governmental force in the world trying to make it a better place sounds lovely, but I haven’t spotted it, and it sure ain’t the WTO. Ok, occasionally someone makes so much money even they get embarrassed and create a Bill and Melinda type foundation to assuage their guilt, but it’s the exception not the expectation.

    Evolution hasn’t changed one iota since green slime popped it’s head up and looked around. Survival of the best survivors is still the driving force in or out of the jungle. In the jungle, muscles are favoured; in society it’s money. Of course this only holds while there are enough workers without much money, making stuff for those with plenty. Beyond there be dragons when muscles (i.e guns) will be favoured. But 2017 is going to be great 🙂

    1. Hi Frank,
      Best wishes for the New Year.
      We live in interesting times. Don’t think that the interest groups who benefit from globalization will meekly accept the new order.
      Trump’s role is not going to be an easy one.

      1. Yes I can’t wait to see how long President Trump lasts. He’s probably just what Washington needs to shake it out of its do-nothing torpor, but realistically I give him 6 months to a year. His businesses are so entangled with foreign (and unfriendly) governments with so much dirt on him, it might just be easier to impeach him (or worse). His CIA dossier must run to volumes. Let’s hope I’m wrong. President Pence would be easier to manage because he has shown time and time again he knows how to straddle a fence without putting a foot on either side. Congress would love him.

        RE “Interesting times”, I never understood the Chinese curse until a friend pointed out there’s a second part to it which goes along the lines “…and attract the attention of powerful people.” Now that’s a curse.

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