Why is globalization inevitable?

[sam h]

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In countries that have really embraced the global economy like Asia and India things have gone well. In those that haven't growth has been subpar.

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Unfortunately, this is way too simplistic. Again, the fact is that the Asian NICs took off in a very different international economic climate than they one we are in now. It is this earlier success that laid the groundwork for the vast expansion of trading networks in Asia, centered upon a unique "three-tiered" system involving a very rich country with lots of capital (Japan), the most dynamic new industrializers of the post-war era (Korea and Taiwan), and a third wave of entrants (China and the ASEAN countries).

And again, many of these countries are actually very protectionist. The Koreans have traditionally maintained huge restrictions on foreign capital investment. In no way has China "embraced the global economy" more than Latin America.

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Also, countries with excessive natural resources are at a huge disadvantage in the global economy. Those resources make it so leaders don't have to unlock the natural talents of thier people. China, Japan, etc. are blessed with a lack of natural resources.

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This is a theory in social science conventionally known as the "resource curse." Whatever its merits, which are disputed, it has nothing to do with globalization.

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As for a different climate, they grew through export based growth. They grew by recognizing technology, education, and competitiveness were the only ways to succeed. the rest is details.

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This true, except for the part about the rest being details. And the devil, as always, is in the details.

[adios]

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It is not very easy to say this to someone who has done the same work for 40 years and now finds himself without a job. Clearly, if this guys job moves to another country, free trade is not benefiting him.

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So friggen what? The alternative is to guarantee someone a lifetime occupation?

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What is the argument here? I don't see anyone arguing the points that in the last 20 years, the upward progression of middle class income (most americans) has basically reached a stand still. Does anyone have proof otherwise?

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In the last 20 years real GDP in the U.S. has grown by over 86% which translates to an annualized rate of real growth at 3.16% or so. How can you state that the middle class has reached a stand still? From a previous post by lehighguy.

Historical Income Tables

From 1985 - 2001 the mean income increased in real dollars at an annualized rate of 1.45% inflation adjusted. From 1967 - 1985 the mean income increased at an annualized rate of 1.27% inflation adjusted. Where is your data that supports your claim?

[lehighguy]

They are protectionist. And while that may have played a factor in thier developement those same barriers have presented problems to them in thier mature stage. Trade barriers in Japan have helped contribute to the 15 yearr recession they have been in. And the bubble that caused that recession came from having a closed economy that resulted in huge trade surpluses.

China has a similair problem. At some point thier currency will revalue (we are seeing the beginning of this) and they will take a huge bath on thier treasury holdings which are in the trillions.

So thier own protectionist policies are a bit of a detriment to them in the long run. Moreover, when I say embrace the new economy I mean culturally. They embrace education, innovation, and competition. None of those values seem to be embraced any more in America.

[Cyrus]

Bear in mind, please, that homogenisation (which is inevitably the outcome of globalisation, broadly speaking) spells doom.

Biologically speaking.

[hetron]

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It is not very easy to say this to someone who has done the same work for 40 years and now finds himself without a job. Clearly, if this guys job moves to another country, free trade is not benefiting him.

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So friggen what? The alternative is to guarantee someone a lifetime occupation?

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What is the argument here? I don't see anyone arguing the points that in the last 20 years, the upward progression of middle class income (most americans) has basically reached a stand still. Does anyone have proof otherwise?

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In the last 20 years real GDP in the U.S. has grown by over 86% which translates to an annualized rate of real growth at 3.16% or so. How can you state that the middle class has reached a stand still? From a previous post by lehighguy.

Historical Income Tables

From 1985 - 2001 the mean income increased in real dollars at an annualized rate of 1.45% inflation adjusted. From 1967 - 1985 the mean income increased at an annualized rate of 1.27% inflation adjusted. Where is your data that supports your claim?

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Here is the link

[ACPlayer]

Great post. One of the best I have read on the forum.

You have articulated the leveling of the worker wealth point that I have been considering for some time. We must understand that this trend is inevitable. Eventually, with NAFTA, CAFTA, etc we will end up where the wealth of the middle class in Mexico City is the same as that in Iowa City.

[sam h]

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They are protectionist. And while that may have played a factor in thier developement those same barriers have presented problems to them in thier mature stage. Trade barriers in Japan have helped contribute to the 15 yearr recession they have been in. And the bubble that caused that recession came from having a closed economy that resulted in huge trade surpluses.

China has a similair problem. At some point thier currency will revalue (we are seeing the beginning of this) and they will take a huge bath on thier treasury holdings which are in the trillions.

So thier own protectionist policies are a bit of a detriment to them in the long run.

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All I can say is that there is an entire world of people taking the analysis of these issues to a much more complicated level in academia. In general, simple answers like "embrace the global economy" and "freer trade, better growth" are not taken seriously in these circles. I have said it before on these boards. There are no easy answers about how to grow an economy in the 21st century.

[checksplay]

Soon we will be downloading streaming movies from a server in the Cayman Islands and won't need blockbuster.