While my previous post, “Another Crack in Globalization,” reported on a study by a Nobel prize-winning economist that concluded that globalization had been a failure for the American middle class – only adding to a growing list of failures of globalization – there’s no shortage of folks eager to slather a little plaster over those cracks.
Carolyn Woo, a business professor at the University of Notre Dame (my alma mater), has written a piece for Notre Dame Magazine titled “The Global Good,” a defense of globalization based almost solely on the success of globalization in fueling an economic boom in Asia. It’s as though the global economic collapse that began in late 2007 never took place. And she takes little note of the effect on the United States.
As I pointed out in my comment at the end of her article, it’s no wonder that economies in Asia have been on a roll when, simultaneously, the United States has been completely bankrupted. The transfer of trillions of dollars in wealth from one to the other tends to make one wealthier at the expense of the other. To conclude that globalization is a successful economic model because it makes one group wealthier is like concluding that armed robbery is a successful economic model because muggers get richer.
You can read both Ms. Woo’s article and my response for yourself. However, before I finish, there are a couple of additional points to be made that I didn’t cover in my comment. First of all, regarding the “opening of markets,” Ms. Woo makes the following observation:
In other parts of the world, information technology and liberalization of trade have opened up a variety of markets. At Notre Dame, for example, jewelry made from recycled magazines by women’s co-ops in Uganda was sold during a Christmas fundraiser in the lobby of the Mendoza School of Business. And a women’s collective in Colombia, through the Clinton Foundation, has engaged Notre Dame MBA students for an analysis on how they can increase demand and prices for their spices.
“Opened up a variety of markets”? In fact, what she describes is nothing of the sort. She describes the startup of more outsourced manufacturing operations. The only “market” involved is that same one that all parasitic, export-dependent nations have been feeding on – the U.S.
Secondly, Ms. Woo makes a valid point regarding the peace dividend of globalization:
Considering that the three primary causes of conflict are corruption, poverty and social inequality, it is not difficult to see that commerce can enhance peace.
I suppose one could make the claim that the integration of China, once a cold war threat, into the global economic community has taken that threat off the table. But at what cost? And are the effects only transitory? Is peace really enhanced permanently when the only nation on earth that has repeatedly come to the rescue of the brutalized and downtrodden, the United States, has been bankrupted and its capacity for responding to crises has been seriously diminished? Given the wars in Iraq, Afghanistan and Libya and the unemployment-fueled unrest throughout the remainder of the Middle East, the world doesn’t really look like such a peaceful place, does it?
Globalization could be a force for the global good, but not in its present, unbalanced, anything goes format. Political leaders, business leaders and academics alike do the world no favors by continuing to champion an economic model that has proven to be a major threat to global economic stability.