15 votes

Economists are now admitting that they were wrong about globalization

12 comments

  1. [7]
    cstby
    Link
    The world is going to continue to globalize. Trying to resist globalization is futile, so positioning oneself to benefit from free trade is a totally reasonable policy. What Krugman failed to...

    The world is going to continue to globalize. Trying to resist globalization is futile, so positioning oneself to benefit from free trade is a totally reasonable policy.

    What Krugman failed to predict is that the America working class would get totally screwed over mainly because of domestic policy. Also, who could have possibly predicted Trump's election?

    13 votes
    1. [2]
      ibis
      Link Parent
      Exactly. A lot of people made a huge amount of money from globalisation. Sensible policy makers would tax the 'winners' and use the money to invest in the 'losers' - eg. by providing discounted...

      Exactly. A lot of people made a huge amount of money from globalisation. Sensible policy makers would tax the 'winners' and use the money to invest in the 'losers' - eg. by providing discounted re-training, or by providing incentives for new industries to move to areas that lost work to China.
      There's no point in trying to fight globalism, governments just need to intervene to ensure that the benefits of globalism are more evenly spread.

      14 votes
      1. NaraVara
        (edited )
        Link Parent
        Not so straightforward. Globalization is less about trade and more about portability and access to capital flows from anywhere in the world. That’s what makes the trade possible. But if the...

        Not so straightforward. Globalization is less about trade and more about portability and access to capital flows from anywhere in the world. That’s what makes the trade possible. But if the finance is infinitely portable that means it’s impossible for any one nation-state to have visibility into it. The rich people will just park it in places where the disclosure laws are opaque and the tax burdens are low.

        In other words the hollowing out of the safety net and tight finances of governments are a natural outcome of the same forces that drive globalization. You can’t get one without the other. If you start putting in capital controls to actually tax people and corporations properly you’re basically restricting trade. The only way to square the circle around it is to have broad, mutational agreements to exercise the kind of oversight and regulatory review that national governments used to.

        But it’s hard to enforce. Just one major trading partner flaking out undermines the whole thing and you have to be willing to stop trading with them to enforce it. But globalization undermines that enforcement mechanism too. Because if everyone is hyperoptimizing around their area of comparative advantage, then nobody can actually do without anyone else. Sanction and ostracism become impossible/impractical which is why nobody says shit to China and the only countries we ever manage to sanction effectively are pariah states like Iran. We tried to sanction Russia and it didn’t stick.

        12 votes
    2. whisper
      Link Parent
      Octavia Butler predicted it.

      Octavia Butler predicted it.

      3 votes
    3. [3]
      envy
      Link Parent
      Doesn't Trump seem so obvious in hindsight?

      Also, who could have possibly predicted Trump's election?

      Doesn't Trump seem so obvious in hindsight?

      1 vote
      1. [2]
        Loire
        Link Parent
        I was rewatching The Newsroom a couple weeks ago which remined me of the Tea Party era. That show was particularly prescient in predicting the future of Republican politics from 2012.

        I was rewatching The Newsroom a couple weeks ago which remined me of the Tea Party era. That show was particularly prescient in predicting the future of Republican politics from 2012.

        3 votes
        1. envy
          Link Parent
          Damn, I think I just got triggered.

          the Tea Party era

          Damn, I think I just got triggered.

  2. [5]
    Halfloaf
    Link
    I live in a somewhat red part of the US, and the pains of globalization were often brought up around the last election. I don't really know how I feel on the topic. While I do enjoy the prosperity...

    I live in a somewhat red part of the US, and the pains of globalization were often brought up around the last election.

    I don't really know how I feel on the topic. While I do enjoy the prosperity that has been brought to many different parts of the world, I fear that the pace has been so fast that it may cause strife in the future, especially with the human rights issues in China, which financial windfalls may only exacerbate.

    8 votes
    1. skybrian
      Link Parent
      I think instead of trying to decide who is right or wrong, we should instead be asking if anyone deserves to be confident about predicting the future? The track record is pretty dismal. Maybe not...

      I think instead of trying to decide who is right or wrong, we should instead be asking if anyone deserves to be confident about predicting the future? The track record is pretty dismal.

      Maybe not knowing how to think about this is the correct response?

      8 votes
    2. [3]
      Kuromantis
      (edited )
      Link Parent
      I think the issue is that it shifts the financial incentives of countries to the products being made instead of the workers making them. If you're a low income country making money off of cheap...

      I think the issue is that it shifts the financial incentives of countries to the products being made instead of the workers making them. If you're a low income country making money off of cheap labor, you don't want to improve the worker's condition, you only want them to keep making what they're making, so you don't spend the money made on the workers, their working conditions, safety nets, education or even human rights and tolerance for minorities, so you just adjust their salaries to inflation every so often and that's it.
      If you're a rich country this means that your working population is essentially useless unless they either do something that requires skills like what's used in STEM, creative or high-precision fields (like surgeons or artists) or their job just can't be outsourced, like with fast food employees who make the food in the back of the counter. This essentially means they're wasted money and your incentive is to automate their jobs, which for the worker means you either go to university (which you most likely lack the money to do) and work in a field mentioned above or be stuck in a dead end job at a fast-food chain (that is, until they roll-out a machine which can make the burgers itself.) which is fine if you want to work at a job like the ones mentioned above but is terrible if you're already working at any job which can be outsourced (like say, a lot of people over 50) because then you'll have to find a job which won't be replaced by someone in a country far poorer than yours which may mean working in a job you have no skill or interest in.

      8 votes
      1. [2]
        AnthonyB
        Link Parent
        I understand that a degree in a STEM subject provides more career opportunities, but let's not go full-reddit and act like a degree in social sciences/humanities or fine arts is useless and that...

        I understand that a degree in a STEM subject provides more career opportunities, but let's not go full-reddit and act like a degree in social sciences/humanities or fine arts is useless and that the only job options are dead-end service jobs. It's not true, and that mentality leads young people to think that those fields are less important or not worthwhile.

        7 votes
        1. Kuromantis
          Link Parent
          Made a few changes to the comment, admittedly I only used STEM as a textbook example.

          Made a few changes to the comment, admittedly I only used STEM as a textbook example.

          1 vote