Winners and Losers of Globalization (2012)

http://www.theglobalist.com/the-real-winners-and-losers-of-globalization/

by gwern • 11 years ago

40 25 11 years ago

sooth2• 11 years ago

Not sure what value there is to gain from this article.

Income distribution is only one aspect of globalization and is probably the worst measure for where the wins and losses fall. And, as I see it, when you look at income distribution, alone, the results are quite obvious are they not?

derriz2• 11 years ago

The effect on income is "the worst measure for where the wins and losses fall"? I'm guessing that the billion or so people who have escaped absolute poverty in the last 20 years do not share your attitude that income is irrelevant. Which measures do you think are more important - given i believe that the wellbeing of all mankind is a pretty important concern.

sooth2• 11 years ago

Environmental change for one. example Syria losing half its agriculture land due to climate change has a lot to do with their poverty increase which then has other downstream consequences (ISILs numbers grow -> more terrorism -> increased military spending -> govts invasion of privacy). Add on that the shoe has yet to drop for most consequences related to climate change - yet it's still real and happening today.

Add to that culture and knowledge exchange effects and I'm pretty sure income distribution, while easily measured, would not be towards the the top.

chroem-5• 11 years ago

It's funny, because all of the countries which have done extremely well (China, Brazil) have protectionist economies while the countries that have stagnated or suffered (US, EU) have fervently implemented free trade policies. Hell, the US even had a protectionist economy from the founding revolution to the mid 20th century as part of the American School of economics.

It's time to critically reevaluate these free trade policies and what they're really doing, not what we're told they're supposed to do.

TheLogothete2• 11 years ago

People who implement these policies know very well what they're really doing.

What do you expect? Let 3B people in China and India fend for themselves? That just leads to an enormous war, probably the end of the world. You can't be that grumpy, rich old man living on the hill nearby the village. The village is going to storm your mansion.

chroem-5• 11 years ago

The benefits of protectionism don't come from creating an export economy; they're the result of allowing local industry to develop and become globally competitive without getting smashed before it can even form.

If you look at Brazil, they're a good example of a protectionist but not heavily export driven economy. Capitalism is not a zero sum game: everyone can have protectionist policies and still win.

yummyfajitas2• 11 years ago

Similarly, we should prevent NY based companies from purchasing Salesforce and Oracle, in order to foster the creation of local competitors. And California should prevent their tech companies from making use of NY-based investment banks when they go public.

That's the way to prosperity!

chroem-5• 11 years ago

That's a complete and blatant misrepresentation of what I am saying. Empirically, countries that have not put all of their eggs in the proverbial free trade basket have been much more prosperous than those that have. You can't deny that.

force_reboot2• 11 years ago

Medians aren't the only important thing. If mean incomes increase, (I think they probably have since the top 1-5% will be overrepresented in the US and Europe) then the total amount of money to go around in these countries has increased.

Now there might be barriers to redistributing this money (e.g. these people might be very mobile), but it might also be the case that this money is not being redistributed for other reasons. E.g. a political shift to the right in these countries.

Even if redistribution had increased in the US and Europe, it might not show up in these figures, which only measure income and not, for example, service provided by the govt.

usaar333• 11 years ago

1. You can't compare the performance of middle-income/poor countries to rich ones. It's much easier to grow a poor economy 10% annually than a rich one due to labor and capital being used so inefficiently at the start.

2. The US has hardly suffered in the study time (1988 to 2008). 1.6% real gdp growth/capita per year.

3. How has Brazil done well? It's 1988 to 2008 growth is 1.3%, below that of the US. More open Mexico has done better (1.4%).

4. Chile, a middle-income country known for free trade, grew 4.2%

5. China is a bit of an anomaly with its incredible 8% year over year growth (possibly the highest in the world). It has many unique factors allowing it to drive high growth (one of which is strong institutions that historically had crippled, not helped, growth).

source for numbers: http://www.wolframalpha.com/input/?i=%28%28brazil+real+gdp+p...

vezzy-fnord• 11 years ago

Brazil's economy hasn't done "extremely well" at all except by select macroeconomic aggregates. In fact, it is woefully inefficient, corrupt, wasteful and the country is further crippled by high murder rates (and crime in general): https://en.wikipedia.org/wiki/Brazil_cost

Your neo-mercantilist tripe is clearly uninformed. In fact, the implementation of your ideas would lead to grave human suffering.

lordnacho• 11 years ago

Well I see one simple explanation for this. By simple, I mean short, rather than uncomplicated.

It's easy to move capital, but it's hard to move labour. That's the world we've built.

So what are the main conclusions?

1) The very wealthy are much wealthier 2) The somewhat wealthy are no better off 3) The formerly very poor are now much less poor.

Why would that be?

If you're a business, you can move your production to China (of course that gap has moved in a lot over the years). So as the owner you reap the profits of mobile capital.

The poor folks in China benefit as well, as they now have better paying jobs utilising the moved capital. They benefit a lot, but actually they would be better off if they could participate in the Western labour market. They can't just come here, so they make do with what opportunities they have. By experience a fair few of these people are just as useful as anyone in the West, but that's how the world is built.

The "somewhat wealthy" are the Western middle class. They don't own the capital, the best they can do is hold on to some of the managerial roles if they're upper middle, or lose their jobs if they're outsourced. Since the firms are more profitable having moved production, the managers can do allright, but they're not all buying yachts. The factory workers in the West are a bit buggered. They whole point of moving is to avoid their expense. A lot of people have had to find new things to do.

force_reboot2• 11 years ago

I think there is broad agreement for you explanation across the political and economic spectrum. In management/MBA speak they refer to the change that is occurring as "climbing the value chain". Each nation must apply its labor to higher value-added industries in order to improve it standard of living. This might seem like an impossible task, but there is no in principle reason why most Chinese coal miners might not be cancer researchers in one generation. Or most Western shelf stackers might not become programmers.

Winners and Losers of Globalization (2012)

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