It Isn’t a Zero-Sum Game

Globalization with offshore outsourcing as its instrument is a win-win situation. In a longer period of time all parties benefit from it. Single countries should use their chance to specialize in this area which they can provide better than the other ones.
Magdalena Szarafin
http://www.szarafin.info

Globalization with offshore outsourcing as its instrument is a win-win situation. In a longer period of time all parties benefit from it. Single countries should use their chance to specialize in this area which they can provide better than the other ones.<br>
Magdalena Szarafin<br>
<a href="http://www.szarafin.info">http://www.szarafin.info</a>

There's this email that has been circulating that I think covers this pretty well:
http://www.nosocialism.com/2009/01/something-to-think-about.html
People seem to forget that 80% of the jobs in the US are created by small business, but it seems that the Government only wants to help out the Big Businesses. Eventually, everyone will end up doing what this man is saying he will do, which shut down, liquidate the company and move to another country, because what's the point of working hard and sacrificing your entire life just to have it all taxed away by the Government

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Independent of whether you believe globalization is good for the US or not, I believe that it is sold to the American people in a way that is very dishonest. I want to address three categories of arguments for globalization and explain why each is disingenuous.

The first argument I want look at is that the global economy is not a zero sum game. This argument is ambiguous enough to be true or false, especially depending on how you choose to interpret "global economy". However, no matter how much the world economy grows, trade is a zero sum game. I don't mean this metaphorically. I mean that trade is literally, mathematically a zero sum game. By definition, the value of the world???s exports must be equal to the value of the world???s imports. A country can only run a trade surplus if another country runs a trade deficit and visa versa. The question that is really up for debate is what do large and prolonged trade deficits tell us about the direction of our economy.

Secondly, globalization advocates always include variations of the same explanation, that the reason globalization has not worked to the benefit of the US is we have not invested enough in education and new technology. We worship and fetishize new technology. The answer to every problem has become "google" and if that fails "science will eventually develop a solution." This genie of technology has made our pundits and policymakers intellectually lazy. New technology is useful and necessary but it is no silver bullet for our economic problems. New technology is not something that can significantly set the US apart. Take, for example, the IT industry. It really doesn't make much more sense for the US to have IT and software development industries than it does for it to have a textile industry. The cost of labor difference is just simply overwhelming.

The next argument is that globalization is will lift billions out of poverty and these new consumers will make the whole world, including the US, more prosperous. This argument for globalization is more sincere in that in the long run it has the potential to become true but it also glosses over some unsavory questions. Asia will not reach wage parity with the US for another half century. What exactly happens in meantime? 50 years of flat income growth for the middle class on down? Rising personal and public debt to mask the effects of shrinking incomes? Since the whole system is dependent on US consumers, how long can such a system remain stable? There is definitely a moral argument to be made here in regards to lifting billions out of poverty, but to make such an accomplishment possible the people of the developed world will need to make painful choices. This moral argument is never discussed.

American-style capitalism has been sacrificed at the altar of business interests. America has finally met its match in globalization. The axis of the world has shifted and all that the Federal Reserve can do to make this look a little less unseemly is to try and support as many too-big-to-fail financial institutions . Bubbles have debilitated America. It is all over.

Just free trade is good only if it is also fair trade! Unfortunately our trade with China is not fair trade, our manufacturing facilities being shut down; we can hardly find any American made product anymore. We became dumping ground, Comunist China subsidizing Chinease Manufacturers. We are loosing all type of businesses (hi-tech and low -tech) in USA,

RE: Glenno Neo-mercantilism, just like everyone else. Our democracy is doing just fine. International law is ok up to the point it is used by global elitists to subvert our democracy.

It is obvious that free trade, democracy and international law does not suit America anymore, but what is the option?

All this theoretical stuff about how globalization is going to lift everyone up in the US is just not believable anymore. Sure GDP has grown, corporate profits are up, the top 1% and the global consultants, who are quoted here, are making money hand over fist.

However wages for the average American are stagnating and job growth has disappeared. While you try to blame this on poor US schools or roads, the truth is that outside of the exporting areas of Asia our schools and roads are better. The problem is not us, it is you. You have rigged a global game to your benefit and at our expense. Take your theories and shove them. We can see the result of your work with our own eyes. You do not fool anyone, anymore.