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  • Essay / Controversial Criticisms and Benefits of Globalization

    Critics of Globalization --- there are asymmetries, not just similarities, both economic and political, between different elements of globalization such as trade, short-term capital flows, foreign direct investment, short-term investments. - terms capital flows, international flows of humanity and diffusion of technology, but most critics focus, as I will, on the first two --- fall broadly into two camps: those who worry ( by convention) of its social implications; and those who (increasingly) fear its economic consequences. The preceding criticisms transcend the North (rich country) – South (poor country) divide, although many NGOs that subscribe to these views tend to be located more in the North. The latter are mainly found in the North (rich countries), particularly in large countries such as the United States, France and Germany. I addressed the many social concerns in my 2004 book, In Defense of Globalization, when I traveled to Seattle for the WTO conference in November 1999 and a joyless event at Woodstock broke out, most consisting of protests by groups who seemed to think freedom was free. Trade was a harmful doctrine (in terms of what we saw as social goals) and the WTO was its Church. To use the words of Tony Blair and Bill Clinton, both discredited in their own countries for different reasons, globalization does not have (or needs) a human face. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay I have systematically reviewed various concerns and concluded instead that globalization has a human face, that on the whole it advances instead of pushing back even the social agendas. Consider, for example, the effect on unequal pay for women in specific jobs, even when they are as qualified as men. When competitive pressure intensifies, as it does with traded goods, the ability of firms to afford to pay higher wages to men, motivated by prejudice, simply because they are men , will be ousted. It turns out that American data proves it: over a recent period of 20 years, wage inequality between women has reduced more quickly in market sectors than in non-market sectors. Trade clearly helped. Again, while I also address in my book many other issues raised by environmental critics of trade, let me consider here the conviction of some NGOs who remain adamantly opposed to trade and their contention that we should adopt an approach “local” and buy. more closely because CO2 emissions are considerable in international trade. It was then that the British agency DFID (Department for International Development) commissioned a study comparing the price of cut flowers from Africa and Rotterdam. It turned out that the total CO2 emissions of Rotterdam flowers were worse because the greenhouses they had to be grown in also emitted a lot of CO2! I dare say that the certainty with which many have greeted the social critiques has fallen, perhaps because their case has been examined by me and a few others and found wanting. But today, many of us worry less about these social issues than about the idea that trade with poor countries is holding back their real wages. They would likeclose the door as much as possible to trade, to outgoing flows of business investment and to incoming flows of unskilled labor. So, if we follow the recent presidential debates between the Democratic candidates for high office, they must all subscribe to the unions' fear that trade has reduced their wages: after all, workers are one of the Democrats' primary voters . But when you consider the evidence for this fear, it is woefully weak. Many recent studies, notably by Robert Lawrence of Harvard and Robert Feenstra of the University of Davis, show that trade is not to blame. My own empirical work from a few years ago shows that trade may in fact have moderated, not accentuated, the decline in real wages. This appears to follow an inexorable and acute labor-saving technical change. . Yet the fallacious accusation of trade persists, even to the point where my distinguished student Paul Krugman, a passionate opponent of President Bush (who happens to be very good on trade and immigration), has decided to back down. on the position that trade "might" have hurt wages, despite being unable to produce any real evidence to support the existence of a negative effect. Unfortunately, even The Economist, a long-time advocate of free trade, fell victim last year to this fallacy and devoted a cover story and a three-page article to suggesting that the working class was a "loser" in globalization, again without any evidence. , although his last Economic Focus column on Krugman (whose quality of work on this subject hardly deserves attention) was a little more skeptical. I must add that, on illegal immigration, while the unions were in favor of sanctions against employers and in favor of harsher repression against illegal immigrants, their position has changed in recent years. Of course, if you think (as they do) that trading with illegal immigrants If poor countries lower your real wages, then the influx of unskilled labor is a direct way to lower your wages, as is the Trade is an indirect way to do this. Largely due to an intuitive understanding of this parallel, which trade theorists have systematically explored, trade protectionists were also immigration restrictors, and free traders favored freer immigration, when the enactment Britain's first national restrictions on immigration in 1904 were debated in 1904. Great Britain. The change in attitude of American unions represents a new appreciation of two facts: we can't really control illegal immigration; and, if so, it is best to turn them legal through amnesty, get them into unions, and support better wages. The Roman Catholic Church, of course, sees amnesty for many Hispanics as the prospect of packed churches, so altruism and self-interest point in the same direction! So we find ourselves faced with a strange situation: generally speaking, Democrats hate trade but will vote for immigration; Republicans like trade but are alarmed by immigration. But there also seems to be a general susceptibility in the American media to the strange idea that the consensus among trade economists on the virtues of free trade has collapsed. Among the economists cited on the “other side” is macroeconomist Alan Blinder. (whose argument simply boils down to the fact that we now have more tradable goods and therefore.