Saturday, November 18, 2006

Show me the money!

Entry for Tuesday, 19 July, 2005

And now for a word about globalization.

I took a class on political science last semester which included a couple of chapters that gushed about how great globalization is and said that only tyrannical dictators used protectionist tactics. In fact, the book went so far as to blame the "protectionist tactics" on the terrible political situations in those countries.

Apparently, the guy who wrote this textbook is historically impaired, because every modern industrialized country started out life using those very same protectionist policies to keep their industries from being raped by foreign robber barons.

But I digress. Globalization, this book proclaimed, is the solution to all of the worlds problems - poverty, lack of medical care, lack of educational opportunities - you name it, allowing some unaccountable corporation to flood your market with cheap goods that displaces local entrepreneurs was the supposed cure. According to this book, and the general theory of globalization, prices for all goods will fall until everyone can afford them due to economies of scale and specialization of production across national boundaries.

The problems with this great theory are numerous, but I'll just mention two today. First and foremost, prices aren't the only things that reach a common level through attrition - wages and benefits go through the same process. Many former industrial workers here in America have found this out - unless they are willing to work for $1.50 and hour and give up health insurance and retirement funds, they can't compete with third world workers. So their jobs go bye-bye and they get to try and snag a minimum wage job before the local illegal aliens do - and the employers prefer the illegal aliens because - guess what? - they don't have to pay them market wages, benefits, or pay taxes on their wages.

The second problem is less obvious because it's only now starting to creep in - once the giant unaccountable corporations and their big-box retail outlets have succeeded in eliminating the mom and pop shops that used to provide services and goods to the community at reasonable living wages for the community, they raise prices - because that's what monopolies do. They eliminate the local entrepreneurs and when they are the only game in town, they can refuse to raise wages and raise prices all they want.

So how is this a benefit to the average community? Well, in case you haven't noticed, it isn't one. In fact, the only people who benefit from globalization are the unaccountable robber baron officers of multi-national corporations. The third-world workers are exploited, the small towns of the developed world are left without any economic base, and the economy as a whole tanks because lower average wage means that less people can actually buy many products.

Something to think about next time you decide to buy some cheap junk made overseas.

And, I almost forgot - that whole "economies of scale thing?" Well, that's a fallacy, too. There is no such thing as an unlimited market. People only need so many widgets so often. Even though the earth is bigger than any one national economy - it's still a closed system! After all is said and done, in fact, the ugly truth remains - it IS a zero sum game. And you don't get back what you let them take away - if you try, they'll just take their toys and go play elsewhere. It's about time some national leaders figured that out. After all, the average American knows this already. Surely politicians aren't that stupid - are they?

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