And How Does Globalization Benefit Us?

I believe it is time to question the benefits of globalization. We were told that globalization would benefit all nations. Sure, maybe in the short term but in long term and sustainability globalization may not be the answer.

I am not advocating "protectionism". Frankly, I am not sure what am advocating right now. But I know this: globalization has not been the "win-win" that "free trade" proponents have argued.

Globalization is not sustainable because it supports a downward pressure on wages and encourages and requires insatiable consumption of resources and cheap consumer goods. But the financing of the consumption, particularly by consumers, is not by higher incomes but by higher amounts of debt. Globalization may only lead to more "boom/bust" cycles in the future.

Basic economic theory of "competitive advantage" says that when one trading partner can produce a product more cheaply than its trading partners, trade still provides benefits to both nations. This sounds good in theory but there is a major caveat to this theory: while it may increase national incomes, particularly incomes of multi-national companies, it can still reduce the income of most workers.

A briefing paper by the Economic Policy Institute established two key findings related to globalization and wages:

1) In 2006, the impact of trade flows increased the inequality of earnings by roughly 7%, with the resulting loss to a representative household (two earners making the median wage and working the average amount of (household) hours each year) reaching more than $2,000. This amount rivals the entire annual federal income tax bill paid by this household.

2) Over the next 10-20 years, if some prominent forecasts of the reach of service-sector offshoring hold true, and, if
current patterns of trade roughly characterize this offshoring, then globalization could essentially erase all wage gains made since 1979 by workers without a four-year college degree.

Globalization was sold to us as "the next best thing since sliced bread". Sure producers can lower their costs and in return lower their prices. But how do American workers make-up for the lower wages that they must accept in order to remain employed? Lower prices for consumer goods is obviously not enough.

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can you specifically state why?

The point of EP is to post details, learn how to discuss the details. For example, what specifically is it about NAFTA that is a problem?

Answer, it lowered wages, enabled arbitrage, wiped out Mexican farmers, allowed most of the Mexican financial system to be bought by foreign interests....

and put "border hopping" as a S. of the Border accepted method to job hunt.

What's the difference between NAFTA and say the EU? Is it unfettered migration in EU member countries that made the difference between success and failure for citizens? Answer No. The EU first and foremost started addressing the overall differences in GDP, PPP across nations for integration. Europe was all primarily first world economies originally. They all had health care, education, retirement, i.e. social safety nets that were similar. Yet still the EU took the time to equalize those differences between purchase power parity, costs, standard of living before they integrated a policy...

These are the things to write about and answer for yourself.

One cannot just write "globalization is bad" as a belief.

The problem with that it's the same religious mantra where various people shout "free trade is all good"....

one needs to look at the details, the real causes and effects to obtain better policy. what is doing what...

How is that?

I try to make the point that the lower prices for consumer goods is not enough to make up for the lower wages.

I am trying to determine whether globalization may have played a factor with the increase consumer debt levels.


but the term is used and abused, just like free trade.

So, what I'm trying to get to is to give statistics, evidence, details as to precisely how these trade agreements and policies are glorified offshore outsourcing agreements...

or corruption and takeover of domestic financial systems and so on.

One needs to go into details as to how and why, else it's just another piece of rhetoric.

Smaller is better

I am not advocating "protectionism". Frankly, I am not sure what am advocating right now. But I know this: globalization has not been the "win-win" that "free trade" proponents have argued.

I agree with John Ratzenberger on this, there ain't nothing wrong with being protectionist. In fact, protectionism is the only rational way to be- protect my children first- because only then can I protect my neighbor's children. Protect my job first, then protect my neighbor's job.

Subsidarity is the key to true morality- do everything at the lowest possible level with the least complexity. Sure, you can gain economies of scale by going larger- but you do so ONLY at the cost of your neighbor, and thus, yourself.

Moral hazards would not exist in a system designed to eliminate fraud.

Maximum jobs, not maximum profits.

NAFTA died a couple of days ago

And I've yet to see any mention of it here.

Of course, my point of view is that 6/7 products from Oregon that now have tariffs against them in Mexico, are FOOD. We have a shortage of food at St.Vincent DePaul in Tigard, and every other food bank and soup kitchen in Oregon due to unprecedented demand. Maybe these companies should be keeping those pears, french fries, grapes, wine, cherries, and apples here at home- in the food banks- before exporting them elsewhere.


Moral hazards would not exist in a system designed to eliminate fraud.

Maximum jobs, not maximum profits.