Globalization is the free flow of three things: goods, capital and labor. Go to your nearest supermarket, I’ll bet you have twenty plus countries’ products represented within easy reach. A store manager’s ability to showcase the desired products for the customers, irrespective of the origin of the products is what is meant by free flow of goods.
When you go to Best Buy and pick a new TV, most likely it was made in China, and therefore, somebody in China got paid. That is part of the free exchange of Goods and Capital.
Now lets talk about Labor, the third component. An average American in general is more accepting of the free flow of goods and capital, but the free flow of labor, ignites the most heated debates around globalization and this is where all the strife and struggles begins.
Globalization creates winners and losers
Globalization has made some global companies extremely rich by providing consumers ready access to cheaper merchandise. There is no denying that in the process, some American workers now find that there are fewer opportunities for them within the United States.
Politicians from all spectrums now understand the anxiety of workers who have seen economic jolts, stingy raises, and fewer guarantees for healthcare and retirement as companies take more part time workers. Increasingly a larger number of politicians are now standing up against international trade agreements.
Although the loss of jobs is real, taking a stance against globalization and free trade deals is misguided and wrong. Trade agreements, like NAFTA and the Trans Pacific Partnership (TPP) are negotiated by American experts seeking to gain more access for American goods, to raise international environmental standards, so U.S. companies remain competitive and don’t have to outsource to countries with lesser standards, and to promote human rights so you can slip on your Nikes knowing they were not assembled by children. Trade agreements should not be the target. The target should be improving American human capital.
Borders and free flow of labors?
Borders are fascinating. Invisible from space but real enough that on one side of the line people may eat fried crickets and on the other they may eat mountain oysters! Borders are like permeable membranes that allow an interchange while keeping the essence of each individual country intact.
There’s something uniquely disquieting about an empty border. Standing on the border with North Korea for example you get the immediate feeling that something is not right. You feel like you should talk in a whisper.
A busy border, like the U.S.-Mexican border, by contrast can be so lively that at times it is dizzying. The volume dictates that any check of people or goods will have to be fast and efficient, and never universal. One gets the sense that this is the way the world should be.
Promoting American labor and manufacturing
Instead of resorting to anti-trade and anti-globalization activism, it would be prudent for politicians and concerned citizenry to properly fund trade delegations and trade shows, and encourage American companies to partner with American Embassies around the world.
America remains a great brand internationally. Due to regulations like the Foreign Corrupt Practices Act, it is known around the world that American businesses live up to high standards, and are reliable.
We underplay our hand overseas. Yes, Coke is everywhere and American movies still set the box office standard, but there are tons of mid-sized American companies that could do very well on the global stage.
We’ve seen how international students who come to the U.S. often go on to great leadership roles in their home countries. Programs designed to send Americans abroad should be just as robust as those that send foreign students here. Making American workers more productive needs to be a well thought out process, not something that happens overnight. But making the American workers internationally connected and engaged will make them competitive.
Another way for the U.S. to compete and win in the globalized world is to really think about our visa policy and attract who we actually need. We’ve prioritized family unification, so brothers and sisters in Swaziland wait for years to get on the list and join their sibling in New York or Minnesota.
The gain for the U.S.? Who knows. Why not figure out what we need and issue visas for those categories. Nurses? Doctors? Engineers? We have a category for investors, but Congress could figure out exactly what we need and create the appropriate visa category and recruit heavily. Such an approach would act sort of like improving the labor gene pool, making the American workforce more educated, worldly, diverse, and hence competitive.
American international companies can be champions for showcasing American standards around the world. Politicians can be champions for American workers, to make them competitive and ready for the international economy.
Protectionism, Brexit, building walls, and opposition to TPP are popular. Sanders, Clinton, and Trump have all benefited from protectionist rhetoric, but ultimately protectionism will not solve the underlying cause of disenfranchisement of the American worker, and protectionism will prove to be harmful and shortsighted.
The bottom line is that planet earth is the marketplace. If we raise the “drawbridge” as President Obama says and crawl into our shell, we’ll simply poke our heads out later only to find that the world has moved on, written it’s own set of international rules, and has left us less competitive with a lower GDP. Any rhetoric that leads us to this track, must be strongly answered.