[git_rancher]

Does anyone else remember being taught in Econ 101 about globalization and comparative advantage and how great it is? Either the educators didn't know this would happen or it was a campaign to sell the public on the idea. Or maybe it was just bad teaching. I wonder which one it was.

[Lazare]

> Either the educators didn't know this would happen or it was a campaign to sell the public on the idea.

Globalisation has resulted in the greatest reduction in human poverty to have ever occurred. The benefits are not uniformly distributed, and there are losers and winners, the losers deserve protection, and the shortcomings should be decried and fixed, sure.

But to conclude from the fact that some migrants in one country are having a rough time that globalisation as a whole is a negative thing is errant nonsense; the equivalent of stubbing your toe and deciding that the entire concept of furniture was a mistake.

The mere fact you're posting on here makes it clear you're part of the global 1%. As such, you have the luxury of preferring policies that avoid making you uncomfortable. Others face harsher constraints.

[RobertoG]

To conclude that globalization is a positive thing for the poorest people of the planet without qualification is also errant nonsense.

The greatest reduction in human poverty is due mainly to China, where globalization has been managed in order to develop the country.

The standard narrative is that this is not necessary. Just open your markets and everything will be OK. Don't protect your industries, don't manipulate your currency, don't 'steel' 'intellectual property', etc and everything will work for the best.

That's obviously not true, but it's a line that keep being pushed.

[Avshalom]

I mean I guess define globalization because the thing immediately preceding it--colonial mercantilism--was just as global. That rise from poverty coincides with both the death of nominal colonialism and also frankly the rise of Soviet and Maoist communism and the CIA's banana republic crimes in Central and South America. Further "Free Trade" as usually used to characterize Globalisation still doesn't exist in any useful sense even in things like NAFTA which has free trade in the name.

[ShorsHammer]

> Globalisation has resulted in the greatest reduction in human poverty to have ever occurred

Correlation ≠ Causation. How can you so easily attribute one to the other? I'd argue advancements in science have done far more to alleviate poverty and suffering rather than lowered trade barriers.

It's a common theme worldwide that most of the gains from globalisation have gone to the elites while environmental damage has been externalised.

[edanm]

That's not a bad point IMO, and one that I often vaguely wonder about too. Just how much of the reduction in poverty is because of capitalism/globalization, and how much is because of improved technology?

I'm not sure I know the answer to that. Then again, I'm not sure it's so easy to separate out these things - capitalism almost certainly lead to more technology.

[azernik]

I remember my Econ 101 teacher being much more cautious - noting that trade produces benefits on average, and that the benefits everyone iff there is political action to redistribute the benefits; and that fiscal is better than monetary stimulus, but in most Western political systems that's harder to push through.

Generally those simple adages are very much spherical-cow observations, with assumptions of rational (i.e. operating in the system's interest) leadership, rule of law, and priced-in externalities; when those professors go from their intro classes to their research they start to account for more of the real-world complications.

[bgorman]

Any econ 101 teacher who goes off script talking about politics shouldn't be taken seriously. My micro and macro classes did not mention political actions at all unless you consider describing the potential actions of the Federal reserve as inherently political.

[azernik]

Any econ 101 class that talks seriously about a) fiscal effects, or b) trade (and hence the usefulness of Pareto-optimal game states) needs to talk about politics, because they are part of the system in question.

This professor specifically specialized in the study of recessions, in which government action is essential; and took special interest in the effectiveness of different government interventions.

Studying these subjects without talking about policy and politics is like studying security and ignoring human-factors research. I am in fact seriously skeptical about the quality of your econ classes that did not mention the effects of government spending, trade policy, taxation, or price controls.

[dlp211]

Economics is inheritantly political. To not talk about politics in an economy class is to deny reality.

[icebraining]

Or worse, to assume their implied political position as "natural" and everything else as a "distortion".

[nicoburns]

I would argue the opposite. Especially for Macro. I'd argue that any econ 101 teacher that doesn't consider politics shouldn't be taken seriously. Ignoring political realities is precisely what is wrong with a lot of (but by no means all) economic reasoning in our society.

[nitwit005]

It's easy to look at how bad things are and lose sight of the possibility that this might be an improvement.

Somehow foreigners keep coming, despite the abuses, so either these people are complete idiots who can't figure things out even after decades of being taken advantage of, or things actually work out well for most of them.

Keep in mind that the exploitation may be just as bad, or worse, in many of the places these people originate from.

[chii]

"better to be exploited and have food than to be free and starve"

[zhangjunphy]

than to be not free and starve

[mbbutler]

The "competitive advantage" that many countries offer has always had more to do with their willingness to grind their workers into bone meal than any sort of technological or agricultural capability.

[ajross]

Do they not teach you people about the Cultural Revolution? Those workers were bone meal long before they walked into a Foxconn factory. Inequality is a precondition for exploitive labor practices, not a result of them.

[ajross]

Or maybe it's a complicated subject and the outrageous aggregate wealth increases might plausibly be seen as worthwhile even if they create this kind of localized disaster.

Basically: if you want to argue against "globalization" and for a return to, I dunno, the world of the 1960's, recognize that you are arguing for a return to the 1960's, and the 60's were by modern standards a human rights disaster basically everywhere.

Progress is good. It's not "all" good, and needs attention and regulation. But ludditism is never the answer. What was that about bad teaching again?

[coldtea]

>Basically: if you want to argue against "globalization" and for a return to, I dunno, the world of the 1960's, recognize that you are arguing for a return to the 1960's, and the 60's were by modern standards a human rights disaster basically everywhere.

That's one of the more bizarro strawmen I've seen.

He doesn't suggest some kind of time travel -- so that we have to take it all, the good and the bad, of an earlier era.

In that he doesn't even say anything about going back to an earlier era.

He speaks of going back to an earlier practice.

Which is what humans who shape their future, as opposed to being taken left and right by some impersonal forces, can perfectly do, without having to adopt anything else.

>Progress is good.

Progress, outside of technology (which is accumulative), is a myth.

History has ups and downs and can go either way. The horrors of WWII were worse than whatever 19th century came up with. American politics, for one, where better in the 60s and 70s than today. And so on....

[ajross]

> He doesn't suggest some kind of time travel -- so that we have to take it all, the good and the bad, of an earlier era.

He/you are hardly illustrating a clear example either. You're just flinging poop, basically, with your "bad teaching" and "progress is a myth". The bottom line is that trade with the developing world over the past half century has been a staggering engine of growth. So if you don't want "globalization" then you have to explain how you get China to grow at 9% year after year for like three decades (or whatever the numbers were) without that trade. You don't get to wave a magic wand and assume that part.

[coldtea]

>He/you are hardly illustrating a clear example either.

My argument is: if we want to change society in a way that resembles how one thing was in another era, there's no law or necessity that dictates that we also adopt everything else from that era.

We can pick and match.

>You're just flinging poop, basically, with your "bad teaching" and "progress is a myth"

Not sure what the "bad teaching" refers to.

The "Flinging poop" part, I find rude.

With 'progress is a myth' I made a statement, and gave two supporting examples just below it.

>The bottom line is that trade with the developing world over the past half century has been a staggering engine of growth. So if you don't want "globalization" then you have to explain how you get China to grow at 9% year after year for like three decades (or whatever the numbers were) without that trade. You don't get to wave a magic wand and assume that part.

I don't want "China to grow at 9% year after year". I want them to have a stable economy and work on redistribution. Similar for everybody else.

I don't want ever growing pies and larger slices. I want better cut slices of the already existing pies. Growth "year after year" is not sustainable (not just not sustainable itself, not sustainable for the environment and society either).

Besides, the net result of that "growth" was to make a middle class in China by deflating the middle class elsewhere (including the US).

The rich get to produce stuff in China and increase their margins (so the "economy grows"), but their country's working class (that used to produce similar stuff at home) is dealt a heavy blow and the middle class is squeezed.

The end result is not some large pie / bigger harmony slices and other fictional unicorns, rather it's trillion dollar bailouts of Wall Street and Detroit, plus "99% percent" on one side, and the "Tea Party" and Trump on the other side.

[ajross]

> I don't want "China to grow at 9% year after year". I want them to have a stable economy and work on redistribution. Similar for everybody else.

No one who knows anything about the cultural revolution would make that statement. A China starting in the 1960's with a "stable economy" and "better redistribution" would, today, be a dirt poor backwater having survived famine after famine. Think North Korea, but with a billion people.

You're fantasizing about a world that doesn't/didn't exist. There's no way to get modern Chinese wealth without "globalization". And without that wealth you have a humanitarian disaster.

[coldtea]

>You're fantasizing about a world that doesn't/didn't exist. There's no way to get modern Chinese wealth without "globalization". And without that wealth you have a humanitarian disaster.

China existed for milennia without "modern Chinese wealth" -- and was the biggest economy on earth for many centuries before the European powers started their colonial plundering.

Economies can also grow slowly and organically -- as opposed to a mad rush to "year over year N% growth" consequences be damned -- and can also chose which areas NOT to grow, and not to pursue, when those areas might be harmful etc.

[wilsonnb2]

> Progress, outside of technology (which is accumulative), is a myth.

I'm really not sure what definition of progress you're using here but calling it a myth isn't very meaningful unless you give a good definition first.

[coldtea]

I'm using the usual casual meaning of progress that conveys some overall, non-necessarily monotonic but steady, betterment of humanity in all aspects.

And in particular I (and many scholars -- though others of course disagree) say that:

1) there's nothing inevitable about progress in the areas where it has been made. Even technologically we could regress a la Mad Max if we hit e.g. continuous climate conditions, or a lengthy major war (nuclear or not).

That this can happen locally is a plain fact -- there are tons of places where it has indeed. Libya, for one, were more technological advanced, prosperous, safe, and progressive a mere few decades ago. I'm also saying that it can happen globally too.

2) actual cumulative progress, while itself volatile (see 1), is only increasing for the most part in the area of technology and/or knowledge. Not in moral norms, or in arts, etc.

Morally populations can regress on a dime, and we have ups and downs all the time, plus there are modern norms that are worse (or less progressive by even our standards) than older norms. There are also eras that produced far crappier art than earlier or later eras (e.g. medieval art vs classical).

[opportune]

Don't be obtuse. When people talk about going back to the 60s in this context, they are talking about a return to the economic conditions that actually saw a steady improvement of QOL for the working class in the US - namely, organized labor and high marginal tax rates. Shoehorning in the orthogonal human rights abuses is just a distraction.

[SamReidHughes]

High marginal tax rates don't create steady improvement for the working class. They might create a single step of improvement by lowering their taxes, but it doesn't increase the rate of improvement beyond that one jump.

[dalbasal]

It's a hard one to teach, because everything carries so much baggage. Comparative advantage as they teach it is not a bad idea. It's a long road from that premise to the conclusion that free markets are all you need to know about humans.

Migrant workers have been for thousands of years and still are, the most powerless class of people. They have no political power, almost by definition. The levels of minimum standards protection they get make a big difference.

I think this is an area that the UN could have done something about, but never did.

[closeparen]

What lives do you think these people would be living if not for globalization?

[noobermin]

The person in the article would most likely still be with her family. She doesn't get a net benefit from her work, she was caught by the system and now cannot leave.

[Nasrudith]

That isn't what comparative advantage is - it is a recognition fo opportunity costs. If you have one country that can grow wheat and cotton better than their northern neighbor who can just grow wheat with lesser yield per acre it would make sense to get as much cotton as they need in the south and trade with the north for wheat because suitable acres not spent growing cotton are a loss in comparison.

I know my teaching of the industrial revolution emphasized that things were dirty, nasty, and brutal. There was exploitation of the desperate masses but it was still sadly a better alternative than being killed in a pogrom or starving to death in a famine and eventually after many lives were lost reform arose to shift the balance.

While the sort of scamming and defacto debt slavery are unacceptable - they were also unfortunately precedented, especially when desperate people are involved and it become less worth asking 'is it a scam' first.

Industrialization is a morally messy process on many levels with no comfortable answers let alone easy ones. Take something like child labor for instance - clearly it is better off to have kids learning and preparing for the coming next stage of the economy instead of toiling or risking injury. However banning it and enforcing it too early perversely leads to increased child prostitution (no pun intended for such a somber subject matter) as they still need money to survive.

[seaweed]

> "If you have one country that can grow wheat and cotton better than their northern neighbor who can just grow wheat with lesser yield per acre..."

You're describing absolute advantage, not comparative advantage. Even if country A is worse at growing wheat than country B, it can still gain by specializing in exporting wheat to country B... so long as it's even worse at making other goods.

[noobermin]

There is an advantage, the advantage is that you don't have to pay the full cost of their labor, you can offset it onto the workers so the price you pay is lower, looking like a savings.

[JDiculous]

Macroeconomics is essentially a public relations campaign on behalf of wealthy private business interests.

[jstewartmobile]

The pedagogues might not have been clued in, but their masters certainly knew. If Jim Crow didn't make it abundantly clear, Norbert Wiener spelled it out again in 1950:

"Any labor which competes with slave labor must accept the economic conditions of slave labor."

[icebraining]

That was a comment on the perils of mechanization/automatization, not globalization:

Let us remember that the automatic machine, whatever we think of any feelings it may have or may not have, is the precise economic equivalent of slave labor. Any labor which competes with slave labor must accept the economic conditions of slave labor. It is perfectly clear that this will produce an unemployment situation, in comparison with which the present recession and even the depression of the thirties will seem a pleasant joke. (...) Thus the new industrial revolution is a two-edged sword. It may be used for the benefit of humanity, but only if humanity survives long enough to enter a period in which such a benefit is possible. It may also be used to destroy humanity, and if it is not used intelligently it can go very far in that direction. There are, however, hopeful signs on the horizon. Since the publication of the first edition of this book, I have participated in two big meetings with representatives of business management, and I have been delighted to see that awareness on the part of a great many of those present of the social dangers of our new technology and the social obligations of those responsible for management to see that the new modalities are used for the benefit of man, for increasing his leisure and enriching his spiritual life, rather than merely for profits and the worship of the machine as a new brazen calf.

[jstewartmobile]

Is there a difference, other than what the parts are made of?

https://en.wikipedia.org/wiki/Lewis_Mumford#Megamachines

[debacle]

We also learned about externalities, two of the biggest being sociological and ecological.

[clay_the_ripper]

Bingo. Externalities make it sound like just a cost of doing business, which in a hyper capitalist system, the exploitation of human beings is exactly that...

[gue5t]

The campaign one.

[fjsolwmv]

Adam Smith explained the downsides of capitalist in the original book on the topic. "Conservative" teachers just prefer to see them under the rug.