11.05.06

A Rant Revised

Posted in FSEM100J, HartsPortfolio at 6:36 pm by hwwood

Quite simply, globalization is a threat to our weaknesses, and an opportunity for our strengths. If the global market is an unstoppable development acting for the eventual good of everyone, our nation must inevitably become a part of it. If we resist, there will be dire consequences far worse than any pain that joining the world economy could do. If we embrace globalization, however, there will be great benefits and opportunities in the long run. True, there is the potential for some suffering at first, especially in the non-skilled labor force. There is and will continue to be opposition from those whose jobs are in danger, as well as those whose supposed patriotism makes them cry “Buy American!” Globalization is already happening, it is the future, and it is the only decision to come to given both the economic and philosophical ideals of America.

I’ll begin with philosophical and ideological reasons, because the mindset of the people is the mindset of the country, and in effect the direction of the economy. America was founded on the ideas of individualism, liberty, and egalitarianism. The notion that we should “Buy American,” purely philosophically, promotes collectivism. It encourages us to accept what we may not want for the alleged greater good for the community as a whole. This, it seems to me, is the opposite of individualism and freedom of choice. Individualism means that people have their own personal identity and worth, rather than being part of a whole. The idea that we have a duty to serve our fellow countrymen purely out of nationalism is a collectivist and thoroughly un-American one.

That’s not to say that we shouldn’t buy American, but simply that we shouldn’t buy American because we feel that we have a duty to. Liberty means that we have the freedom to choose a Japanese car over an American one, and furthermore, we have the freedom to make that choice without any guilt cast upon us from a generally collectivist populous. Liberty means that we have the freedom to dissent against, detach from (to an extent), and even hate our own nation and express these thoughts if we wish.

Collectivism breeds bigotry and xenophobia, the enemies of egalitarianism. To feel that any American deserves something more than a foreigner who’s just as good is what’s truly un-American. The American patriot can be a great contradiction, but one that makes perfect sense in terms of liberty and individualism. Being unpatriotic is patriotic, and it is from our own nationalistic thinking that anti-nationalism should be produced. It’s true, these fundamental ideas somewhat blur national lines and nations themselves, but that’s exactly why they’re so compatible with the idea of globalization and so opposed to the philosophy of “Buy American.”

Our nation right now is very comfortable. After World War II, we became the only surviving superpower, breeding a complacency that was only briefly threatened in the Cold War. If globalization is a threat, it’s only a threat to our moral failings. That is, what globalization is doing is forcing us to realize that there are other nations in the world, nations which can compete with our own. Of course, anyone whose comfort is threatened will fight to protect it. That is exactly what the protectionist left is trying to do, and I’d like to end this part with a quote from philosophy professor Dr. Harry Binswanger: “The patriotic advocates of buying American would be shocked to learn that the economic theory underlying their viewpoint is Marxism. In describing the influx of Japanese products and investment, they don’t use the Marxist terminology of “imperialism” and “exploitation,” but the basic idea is the same: capitalistic acts are destructive and free markets will impoverish you. It’s the same anti-capitalist nonsense whether it is used by leftists to attack the United States for its commerce with Latin America or by supposed patriots to attack Japan for its commerce with the United States.

“Contrary to Marxism, one does not benefit from the poverty or incompetence of others. It is in your interest that other men — in every country — be smart, ambitious, and productive, not stupid, lazy, or incompetent… More and better production is good for all men, everywhere. What’s good for Toyota is good for America. That’s individualism, and that’s Americanism.”

I hope I’ve effectively illustrated how American philosophy demands globalization, and now I’ll move on into pure economics and practicality. I feel that I should begin by refuting politicians’ claims as to the great harm that globalization, outsourcing especially, is causing America, as it’s politicians who are calling on Americans to abandon the American philosophy previously discussed. When Greg Mankiw, head of the White House Council of Economic Advisors, stated that “outsourcing is just a new way of doing international trade,” there was an enormous outcry from the media and the Democratic party that the Bush administration was supporting the “exporting of jobs” and that American unemployment and poverty was part of his economic plan to benefit the rich.

In the true tradition of media and politics, any hard evidence to support these sensationalist, rabble-rousing claims is very scarce. In the words of Don Luskin, Chief Investment Officer for Trend Macrolytics, “All the sensational numbers that are thrown around all the time in the media are nothing more than forecasts by various consultants… Forrester Research estimates that 3.3 million white-collar jobs will move overseas by 2015… Let’s get real. Suppose Forrester is right, that 3.3 million white-collar jobs will move overseas by 2015. That’s eleven years, folks. That’s 300,000 jobs a year, or 25,000 a month. Today there are 130 million jobs in the United States. So the cost is 2/100 of 1% of jobs each month. Don’t worry about it. On average the US economy generates job growth 10 times that much every month.”

According to the Bureau of Labor Statistics, the unemployment rate fell to 4.4% in October 2006, well below the average since 1948. While it’s true that jobs are being lost in manufacturing and low-skill areas, what no one ever talks about are the new service-oriented jobs which open up at a faster rate than the manufacturing jobs are closing. Just as Mankiw conceded, there is some uncomfortable displacement, but nothing that adversely affects the economy. Average earnings are rising faster than inflation, unemployment is very low, and our economy is growing at a fantastic rate. Why, then, have Democrats shouted so loudly about the dangers of outsourcing? Well as it turns out, Republicans aren’t the only ones who can play up a nonexistent danger for the sake of votes.

What Mankiw was defending was an economic theory that has been accepted for two hundred years: the idea of comparative advantage. Every nation will produce what it can produce best and most efficiently, and everyone benefits. Advancements in India will much more likely help us than harm us. There really isn’t a real question here. The biggest concerns are false ones raised by enemies of the truth: media and politics. The facts, the actual facts, beg to differ with the outcry against globalization. Protectionist policies will destroy us in the long run, but if we choose to uphold our traditional American ideals and embrace the new world, life will end up being much better for everyone around the globe.

1 Comment »

  1. Can you imagine any limits to individual freedom? Are there any higher values in any circumstances? If so, please explain.


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