This post was originally written in 2016 but not published at the time written for reasons of timing. I think that now is as good a time as any to publish it; though the specific examples are dated, the point is still relevant. The economy is included in faith and morality, considering whether the systems are fair and just to the people involved. The spur for this piece was this 2016 blog post on a think-tank sponsored by a globalist enterprise. The risk of this arrangement is whether someone making a huge profit in international business is effectively publishing a justification for self-enrichment by funding a think-tank to support their endeavors.
Economics can sound dry -- until a family member cannot find a job. Since the start of the industrial era of mass production, economies around the world have been adjusting to it, and there has been something of a race to the top for the investors as business empires go global. In this article that promotes free and open trade, I've bolded a part that is meant to argue for why the proposed restructure is a good one, and implies it is a fair one:
Originally attributed to the English classical economist David Ricardo
and later formalized by generations of economists including Samuelson,
trade theories rooted in comparative advantage hold that free trade
should raise the overall welfare of all nations that engage in it. Wages
of Chinese workers should rise, as would income levels of American
capital owners, if the two countries open up to trade. And any negative
impact domestically could be ameliorated by making the necessary
transfers to compensate those hurt by trade.
And here lies a key economic and moral issue with globalization: It defines "the overall welfare of all
nations" in terms of benefits to
workers in developing nations, and benefits to
investors ("capital owners") in the developed nations. The economic theory as stated here flinches away from directly recognizing the direct harm to
workers in the developed nations who lose their jobs and lower their standards of living on a massive scale. The theory accepts as collateral damage the millions of workers in the developed nations whose standard of living often declines below the poverty line. During the recent period of globalization, the number of people in the United States facing food insecurity -- who rely on assistance programs to provide food -- has increased sharply.
Globalization tends to be supported by the investor class that benefits from the arrangement. Policy-oriented think-tanks that support globalization are typically sponsored by the well-connected capital owners who benefit from these arrangements at the expense of others. The theory of mutual benefit here excuses itself from responsibility to "those hurt by trade". It overlooks their right to be considered as part of the issue, and neglects to acknowledge that there is a large, powerlessness group of people harmed in the developing countries, and a small, well-connected group that benefits. It is a transfer of wealth from the workers of one country to the elite of its own country and the workers of another country. Income inequality
grows within developed nations as a direct result of this globalizing arrangement. Of all the groups involved in the trade, the investors in the rich nation are the main beneficiaries.
The remarkable rise in the
living standards of citizens in Japan, the four “Asian Tiger” economies,
and most notably China, are testaments to free trade working its magic.
The remarkable rise in the living standards in Asia is commendable. The fact that it came on the back of the bankruptcy of the city of Detroit, with other rust-belt cities strained to the breaking point, is not so commendable. And the benefit to the U.S., under this theory, is the increased wealth of the investor class. Which brings us to our think-tank author struggling to determine why global trade is slowing, and what do to about it. His third explanation for the slow-down of trade acknowledges "those hurt by globalization" trying to stop being hurt by globalization (a driving force of modern populism):
A third explanation for falling levels of global trade is the rise of
populism and anti-globalization sentiment. The WTO has, in fact, warned that
these trends could damage an already weak world economy. The desire of
those hurt by globalization to shield themselves from foreign
competition via protectionist or retaliatory policies is a growing
influence in the political life of a number of countries, including the
world’s most advanced democracies.
The author seems to struggle to understand the desire of "those hurt" to stop being hurt ("shield themselves" / "protectionist"); I'd say it's an entirely understandable and honest motive. The workers standing up for themselves is depicted as a risk to the world economy. The unspoken assumption is that the workers are a threat, that their concern for their own well-being is illegitimate, and that the enlightened leaders might accept "world" prosperity coming at the expense of the people living on food stamps. The author struggles to understand populism; I'd refer him back to his earlier comments:
Any negative
impact domestically could be ameliorated by making the necessary
transfers to compensate those hurt by trade
"Necessary transfers to compensate those hurt by trade" has, in the U.S., worked out to electronic fund transfers under the SNAP food program, with more than 43 million Americans needing help to put food on the table (Aug 2016 numbers). A few short years ago in 2009, that number was 33 million. The cost of the SNAP program in August 2016 was 5 billion dollars for the month; the portion of that due to the 10 million newly-insecure is over 1 billion dollars per month. The progressive agenda focuses on whether the necessary welfare programs are actually expensed to the investor class who directly benefited from offshoring the workers' jobs. The populist agenda focuses on the underlying injustice of investors profiting by selling out the workers' job security, and the workers' right to self-determination -- which they were not actually willing to sell in return for food stamps. Their lives, their jobs were involved in a trade deal to which they did not consent, on a scale that has devastated not just scattered individual families but cities, states, and regions of the country.
So the
"benefit to all countries" is, for the developed nation, a benefit
accruing to the investor class at the expense of the standard of living
-- and the economic security -- of the working class. This contributes directly to the rise of populism in the working class, and the growing opposition to policies that the developed world's working class
recognizes -- rightly -- as harmful to them. From the populist viewpoint, the issue is not that workers are standing in the way of globalism; it is that globalism does not recognize the workers right to insist on a system that considers them worthy of notice, one that does not condemn them to poverty while shockingly rich people benefit from their loss.
