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Jewish World Review June 19, 2000 / 26 Sivan, 5760

Mort Zuckerman

Mort Zuckerman
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Consumer Reports

A bit of straight talk -- WHAT AN ODD COMBINATION of folks fomenting against globalization. The Stop-the-world-I-want-to-get-off crowd is a mix of the poorly informed and well intentioned and the poorly intentioned and well informed. They're unionists out to protect jobs, idealists concerned about the environment, radicals with their hatred of corporate America. For all their differences, the antiglobalists all have one thing in common: Out of ignorance or indifference, they are seriously distorting reality.

Reality No. 1 is that the flow of capital, goods, people, and information that is called globalization is a net benefit to ordinary Americans. Some sectors of the economy have been hurt by foreign competition, to be sure. But the negative is dwarfed by the positive. Over the past few decades, trade has been a critical component in keeping unemployment low, providing generally better-paid jobs with better prospects. Add to this that we all enjoy greater choice as consumers, at lower cost, leaving us with more discretionary income. American businesses, meanwhile, are profiting hugely from expanding overseas opportunities. It's a case for, not against, globalization.

Producing prosperity. So why all the objections? One reason is that, as the international monetary system has grown, private capital flows have been destabilizing in Europe, Mexico, and Asia. For some, the trend has come to symbolize a global intrusion into national sovereignty. Another reason is that benefits at home are slow to be appreciated and difficult to tie to increased trade; the costs, such as a factory closing, on the other hand, are not at all hard to understand.

With just a little imagination, though, it's not hard to see how much American prosperity in this century will be tied to our ability to increase exports. Free trade has received overwhelming endorsement by economists. They understand, as we should, that nations gain from the exchange of goods by freely selling what they produce best while buying whatever comes more cheaply from the world market.

Reality No. 2 is that workers in other countries, for whom the protesters claim to speak, do not agree with some of the arguments against globalism. Quite the opposite, in fact. It's understandable that protesters should feel guilty that we compete with foreigners who are paid so much less than American workers. But it would be perverse to make them worse off on the basis of antiglobal ideology. Yes, the wages in countries like Indonesia, China, and Thailand are outrageously low by Western standards, but these jobs are pathways to upward mobility for many. And if Asian families send their children to work, it is because they need to–just as Americans did in the 19th century.

President Ernesto Zedillo of Mexico has pointed out that trade is the most powerful instrument for making improved labor conditions converge across nations. "Every case where a poor nation has significantly overcome poverty," he said, "has been achieved while engaging in production for export and opening itself to the influx of foreign goods, investment, and technology; that is, by participating in globalization." Just look at those countries that have narrowed the income gap with the West–Japan, South Korea, Singapore. All have done so by integrating their economies with global trade.

To address this combination of ignorance and deliberate misrepresentation, we must provide extensive analysis and support wider education and training programs. As economist C. Fred Bergsten has put it, we must "enable American workers to take advantage of globalization, rather than feel victimized by it." We must seek a new international financial architecture to contain crises. And we must understand the natural protests from people in other parts of the world, seeking to retain their cultural and linguistic uniqueness in the face of their fears that American culture, and the English language, will dominate and homogenize all other cultures.

Globalization is not the evil force claimed by street protesters. Their howls of pain are just a frightened reaction to change–not a rational assessment of change. The idea that American workers or workers in other countries will gain from reducing trade has no rational basis in economic theory, economic history, or common sense. Half a century of effort has gone into creating the opportunities that now enable nations around the globe to raise hundreds of millions of people from poverty. This must not be forgotten in the din and media manipulation generated by the ideological and the ill-informed.

JWR contributor Mort Zuckerman is editor-in-chief and publisher of U.S. News and World Report. Send your comments to him by clicking here.


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© 2000, Mortimer Zuckerman