The Globalization Debate: Prosperity or Impoverishment?
Is the shift toward a more integrated and interdependent global economy a good thing? Many influential economists, politicians, and business leaders seem to think so. They argue that falling barriers to international trade and investment are the twin engines that are driving the global economy toward ever greater prosperity. They argue that increased international trade and cross-border investment will result in lower prices for goods and services. They believe that globalization stimulates economic growth, raises the incomes of consumers, and helps to create jobs in all countries that choose to participate in the global trading system.
There are good theoretical reasons for believing that declining barriers to international trade and investment do stimulate economic growth, create jobs, and raise income levels. Moreover, considerable empirical evidence lends support to the predictions of this theory. However, despite the existence of a compelling body of theory and evidence, the process of globalization has its critics. We would be remiss if we did not mention their concerns. Here we briefly review the main themes of the debate. In later chapters we shall elaborate on many of the points mentioned below
Globalization, Jobs, and Incomes
One frequently voiced concern is that far from creating jobs, removing barriers to international trade actually destroys manufacturing jobs in wealthy advanced economies such as the United States. The basic thrust of the critics' argument is that falling trade barriers allow firms to move their manufacturing activities offshore to countries where wage rates are much lower. Bartlett and Steele, two journalists for the Philadelphia Inquirer who have gained notoriety for their attacks on free trade, cite the case of Harwood Industries, a U.S. clothing manufacturer that closed its U.S. operations, where it paid workers $9 per hour, and shifted manufacturing to
Honduras, where textile workers receive 48 cents
There are good theoretical reasons for believing that declining barriers to international trade and investment do stimulate economic growth, create jobs, and raise income levels. Moreover, considerable empirical evidence lends support to the predictions of this theory. However, despite the existence of a compelling body of theory and evidence, the process of globalization has its critics. We would be remiss if we did not mention their concerns. Here we briefly review the main themes of the debate. In later chapters we shall elaborate on many of the points mentioned below
Globalization, Jobs, and Incomes
One frequently voiced concern is that far from creating jobs, removing barriers to international trade actually destroys manufacturing jobs in wealthy advanced economies such as the United States. The basic thrust of the critics' argument is that falling trade barriers allow firms to move their manufacturing activities offshore to countries where wage rates are much lower. Bartlett and Steele, two journalists for the Philadelphia Inquirer who have gained notoriety for their attacks on free trade, cite the case of Harwood Industries, a U.S. clothing manufacturer that closed its U.S. operations, where it paid workers $9 per hour, and shifted manufacturing to
Honduras, where textile workers receive 48 cents