Perception: Globalization may have been oversold. We are beginning to see unanticipated problems which should give us pause.
Economic Reality: The idea behind Globalization – defined as the increased integration of the world’s economy – is that resources should be allocated by markets, instead of government’s. That idea has been and remains a great success.
“Countries don’t get rich by staying isolated. Those that embrace trade and foreign investment acquire know-how and technologies, can buy advanced products abroad and are forced to improve their competitiveness. The transmission of new ideas and products is faster than ever. After its invention, the telegram took 90 years to spread to four-fifths of developing countries; for the cell phone, the comparable diffusion was 16 years.”
The above quote is from a column by economist Robert Samuelson.
To take the globalization / free trade argument to another level, check out the posting by one of those heavyweight-ivy-league blogoshere-icon economist types – Greg Mankiw. He’s for it and writes:
“Economists’ devotion to free trade is based not only on the positive conclusion that it leads to a bigger economic pie but also on a couple of related philosophical positions.”