What Happens When Globalization Goes Bad?

I (and others) have previously noted that as economic conditions worsen, so will the social mood. One unfortunate consequence of this shift will be heightened antagonism towards "outsiders," (e.g., immigrants) as well as widespread resentment towards those who seem to be "winning" at others' expense (e.g., China). The upshot? Increasing protectionism and a contagious tide of xenophobic nationalism.

As it happens, there is plenty of evidence to suggest that attitudes in this country are already moving in that direction - despite the fact that the U.S. economy has not (yet) fallen off a cliff. In "The Economic Isolationists Are Winning," the eponymous publisher of Greg Mankiw's Blog details a recent poll result that could be the precursor to a more direct and concrete collective response.

A new poll from NBC News/Wall Street Journal (conducted Dec. 14-17, 2007):

"Do you think the fact that the American economy has become increasingly global is good because it has opened up new markets for American products and resulted in more jobs, or bad because it has subjected American companies and employees to unfair competition and cheap labor?"

28 % of the American public said globalization is good, while 58 % said it is bad.

Note that even the pro-trade part of the question presumes a mercantilist approach to the issue. In actuality, trade is not primarily about more or fewer jobs but about allocating labor among industries toward those in which we have a comparative advantage. I doubt, however, that a more economically literate rewording of the question would have found the American public sympathetic to globalization.

While Professor Mankiw seems to blame the results on isolationist propagandizing or poor schooling, I believe they reflect a structural sea of change that will find popular appeal in nations around the world as the glory days of global growth come to an end.

Comments

[Tom B:]

Globalization has ALWAYS been bad. What good is it if you can get a towel for 10 cents less at Walmart if it means you've lost your domestic textile industry to countries with poorer environmental / labor standards?

2008 Jan 02 09:34 AM

[James Cullen:]

How can you categorically say globalization is bad, unless you take a frighteningly simplistic view of things?

2008 Jan 02 02:03 PM

[chagrinned1:]

Antaganism against illegal immigrants is a security issue for most folk. No other country has allowed illegals(no-docs) easy access. It does not take a genius to figure out there are people wanting more US citizens dead than alive.

2008 Jan 02 02:25 PM

[David Roskoph:]

We are globalizing our way out of our own prosperity to the benifit of theirs. Who said we're greedy?

2008 Jan 02 03:49 PM

[Tom B:]

"How can you categorically say globalization is bad, unless you take a frighteningly simplistic view of things "

I think YOU are the one not following matters through to their logical end. At the logical end I prefer Americans to be living well, rather than Indians, Chinese, Brazilians-- you get the picture. What's the point of being a Superpower if you can't make life good for your citizens?

2008 Jan 02 04:41 PM

[Myron Shlapak:]

There was an editorial in Barons some months back about reverse immigration. US cititzens leaving the country permanently to start lives elsewhere.

This had been going on for sometime with retirees, where the strong dollar allowed people to enhance their lifestyles in countries like Spain and Poland. Of course that was prior to the Euro.

The gist of the editorial, and I wish I had kept the authors name, was that Young families are packing up and moving out. They are going to where the jobs and opportunities are.

This country is a country of immagrents. When we stop the flow of new blood coming in it will become a country of old foggies.

Globalization is not bad. It is a wake-up call to US, compete or die.

2008 Jan 03 05:25 AM