Globalization and International Trade
What a topic! Both exciting and too big to handle. Also in a state of flux. All I can do here is mention some items that Americans ought to be dealing with in order to survive in this super-competitive global environment. And we can indeed survive.
Let's start with globalization. One way to view this huge and fascinating phenomenon is as the integration of technology, commerce, culture, and knowledge across national boundaries, something potentially enriching and enlightening. We're all connected! But as we have seen, globalization has also energized protesters by the millions all over the world because of its apparent role in defiling the environment, taking away workers' rights, making impoverished countries still more impoverished, and more. Globalization seems to be governed by multinational corporations (MNCs). These two perspectives have been ingeniously described as globalization from below, as from the Internet, versus globalization from above, as from the establishment.
It is not that globalization is bad per se, as I see it, but that policies being pursued in recent decades have been unfortunate. This could be reversed.
What could a Democratic candidate say about globalization? A big problem is that there is no agency in existence for overseeing the incorporation and/or the behavior of MNCs, and as a result one can play off one nation against another for environmental favors or lower taxes and the like. We could seek counsel and action from international organizations such as the United Nations or the Group of Eight. But inasmuch as they are not set up for such a role, this doesn't seem very promising. (Structural reform of the United Nations would be a worthy endeavor, if and when success appears possible.) We could, nonetheless, work through other international organizations such as the World Trade Organization, the World Bank, and the International Monetary Fund, on such issues as corporate taxes, environmental regulations, workers' safety, debt forgiveness, foreign aid, and so on. We should insist on the particiption of environmentalists and workers in the deliberations of international agencies.
It gets a little easier when we look at international trade. The term "free trade" is now more descriptive of what corporations do: write the rules as they see fit. So let's talk about "fair trade" as something Democrats should favor. Trade does indeed increase GDP, and lowering tariffs and quotas is in fact good for the economy. Protectionism is usually a step backward and should be avoided when at all possible. There are better directions to take, but changes must get under way immediately in two (related) areas: (1) labor and (2) competitiveness.
(1) The American worker has been taking a beating in recent decades, and this is grossly unfair and also unnecessary. While productivity is high, wages stagnate, the workweek is too long, and unemployment is too high. Historically there have been two ways to help the cause of labor, unions and legislation. The weakening of labor unions should be reversed. But here we'll focus on what the federal government can do for labor.
In no way should workers have to bear the burden of the so-called unfavorable balance of trade, a situation in which imports exceed exports. We know how to reach full employment through the use of progressive fiscal and monetary policies. Let's insist on full employment. At the same time let's see that, when workers are laid off, unemployment compensation (and/or wage insurance) is adequate and continuing as long as needed. Add to this programs for retraining and relocation. All of this can help workers while they seek new employment. Legislation is also urgently needed for raising the minimum wage up to the level of a living wage. Arguments about this are treated in an earlier blog.
Pensions must also be guaranteed through legislation, and Social Security should be assured as a guaranteed monthly payment (not privatized). Universal health insurance should be provided; this would cost much less than the present chaotic "system." Programs that benefit families, such as day care, elder care, and parental leave, should be put in place.
We should be made aware, however, that layoffs from jobs sent overseas are usually visible, while the gains from trade are spread out over the entire economy and are not so readily apparent.
One more thing in the area of trade: the huge excess of imports over exports may not be sustainable and should not be ignored. The nations financing this debt could decide to dump dollars in favor of other currencies, and this could mean the end of the use of the dollar as the world currency. We must put resources into studying this issue and making recommendations.
As for the second item, competitiveness, there is a question about whether Americans are being "dumbed down." However serious that is, the remedies required, although not small, are fairly obvious. Simply, competitiveness can be assured by investing in people and infrastructure. American workers and employees must be made more creative, more motivated, more efficient, more productive. Americans have a history of being innovative and entrepreneuial; this can continue.
Investment in education is essential. Let's consider free tuition for higher education. Can we afford it? Here I can only advocate a serious look at the costs of this relative to the costs of preemptive warfare we are now engaged in, along with a look at the heavy weaponry we are now financing when the response to worldwide terrorism requires quite a different, and actually less expensive, approach. We financed education for veterans of World War II, when American GDP was much lower than it is now. And the payoff from the increased investment in education was then, and would be now, enormous.
Education at all levels should focus not only on science and engineering but on the arts as well. Instead of cutting down on the arts as something less than essential, we should recognize the arts as productive of creativity.
An item of great importance all by itself is the question of Net Neutrality. Surely the Internet is the most amazing and, yes, wonderful thing that has happened in this age of great happenings. We must keep it accessible to all.
If the measures suggested above were in place, then we could expect that globalization and increased trade would be not only acceptable but exciting and welcome, even a great adventure. Let's bring on more globalization from below.
Let's start with globalization. One way to view this huge and fascinating phenomenon is as the integration of technology, commerce, culture, and knowledge across national boundaries, something potentially enriching and enlightening. We're all connected! But as we have seen, globalization has also energized protesters by the millions all over the world because of its apparent role in defiling the environment, taking away workers' rights, making impoverished countries still more impoverished, and more. Globalization seems to be governed by multinational corporations (MNCs). These two perspectives have been ingeniously described as globalization from below, as from the Internet, versus globalization from above, as from the establishment.
It is not that globalization is bad per se, as I see it, but that policies being pursued in recent decades have been unfortunate. This could be reversed.
What could a Democratic candidate say about globalization? A big problem is that there is no agency in existence for overseeing the incorporation and/or the behavior of MNCs, and as a result one can play off one nation against another for environmental favors or lower taxes and the like. We could seek counsel and action from international organizations such as the United Nations or the Group of Eight. But inasmuch as they are not set up for such a role, this doesn't seem very promising. (Structural reform of the United Nations would be a worthy endeavor, if and when success appears possible.) We could, nonetheless, work through other international organizations such as the World Trade Organization, the World Bank, and the International Monetary Fund, on such issues as corporate taxes, environmental regulations, workers' safety, debt forgiveness, foreign aid, and so on. We should insist on the particiption of environmentalists and workers in the deliberations of international agencies.
It gets a little easier when we look at international trade. The term "free trade" is now more descriptive of what corporations do: write the rules as they see fit. So let's talk about "fair trade" as something Democrats should favor. Trade does indeed increase GDP, and lowering tariffs and quotas is in fact good for the economy. Protectionism is usually a step backward and should be avoided when at all possible. There are better directions to take, but changes must get under way immediately in two (related) areas: (1) labor and (2) competitiveness.
(1) The American worker has been taking a beating in recent decades, and this is grossly unfair and also unnecessary. While productivity is high, wages stagnate, the workweek is too long, and unemployment is too high. Historically there have been two ways to help the cause of labor, unions and legislation. The weakening of labor unions should be reversed. But here we'll focus on what the federal government can do for labor.
In no way should workers have to bear the burden of the so-called unfavorable balance of trade, a situation in which imports exceed exports. We know how to reach full employment through the use of progressive fiscal and monetary policies. Let's insist on full employment. At the same time let's see that, when workers are laid off, unemployment compensation (and/or wage insurance) is adequate and continuing as long as needed. Add to this programs for retraining and relocation. All of this can help workers while they seek new employment. Legislation is also urgently needed for raising the minimum wage up to the level of a living wage. Arguments about this are treated in an earlier blog.
Pensions must also be guaranteed through legislation, and Social Security should be assured as a guaranteed monthly payment (not privatized). Universal health insurance should be provided; this would cost much less than the present chaotic "system." Programs that benefit families, such as day care, elder care, and parental leave, should be put in place.
We should be made aware, however, that layoffs from jobs sent overseas are usually visible, while the gains from trade are spread out over the entire economy and are not so readily apparent.
One more thing in the area of trade: the huge excess of imports over exports may not be sustainable and should not be ignored. The nations financing this debt could decide to dump dollars in favor of other currencies, and this could mean the end of the use of the dollar as the world currency. We must put resources into studying this issue and making recommendations.
As for the second item, competitiveness, there is a question about whether Americans are being "dumbed down." However serious that is, the remedies required, although not small, are fairly obvious. Simply, competitiveness can be assured by investing in people and infrastructure. American workers and employees must be made more creative, more motivated, more efficient, more productive. Americans have a history of being innovative and entrepreneuial; this can continue.
Investment in education is essential. Let's consider free tuition for higher education. Can we afford it? Here I can only advocate a serious look at the costs of this relative to the costs of preemptive warfare we are now engaged in, along with a look at the heavy weaponry we are now financing when the response to worldwide terrorism requires quite a different, and actually less expensive, approach. We financed education for veterans of World War II, when American GDP was much lower than it is now. And the payoff from the increased investment in education was then, and would be now, enormous.
Education at all levels should focus not only on science and engineering but on the arts as well. Instead of cutting down on the arts as something less than essential, we should recognize the arts as productive of creativity.
An item of great importance all by itself is the question of Net Neutrality. Surely the Internet is the most amazing and, yes, wonderful thing that has happened in this age of great happenings. We must keep it accessible to all.
If the measures suggested above were in place, then we could expect that globalization and increased trade would be not only acceptable but exciting and welcome, even a great adventure. Let's bring on more globalization from below.
posted by Gladys at 8:48 PM
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