Roger Marolt: In the long run we may all be dead, but I still hope to get there
Roger This
A rising tide raises all boats, they say. This is not fake news. What they say less often is that tides fall as often as they rise.
A huge part of this thing we call “globalization” is the economic ocean seeking level. In the good ol’ pre-globalization days, some countries established their own economic locks and dams and jetties that allowed them to keep the great sea of green deep in their harbors. Countries like the United States capitalized on abundant natural resources and created a stellar quality of life while others remained poorer.
The tide is changing. With technology has come ease of global communication and transportation. It is as easy to have almost any product manufactured halfway around the globe as it is in a neighboring county. Places where production is cheaper are attracting the work.
This is not a surprise. In textbooks, this is the way it is supposed to happen. We liked how it sounded in introductory economics courses. The problem, we are finding, is that the results can be painful in real-world transitioning.
The greatest predicted benefit of globalization is spreading work and development around the planet so that more people are employed and end up with more to spend on more goods than ever before. In the long run, the entire world is richer and living better. But, as economist John Maynard Keynes famously pointed out, “in the long run, we are all dead.”
In the short term, the quality of life in highly developed nations with relatively expensive costs of production must necessarily fall in order for lesser developed nations to rise. Two phenomena currently indicate this:
Many things we used to produce domestically are now being produced abroad.
And, foreign countries are producing products and services at prices we like.
As with all things inevitable, we can only change the way we look at this. If we choose bitterness, we can frame it as “foreign countries are stealing our jobs.” If we are more generous, we say, “We are giving work to other countries to make products we want at lower prices than we can produce them for.”
It’s six of one way to look at it that will keep you up at night, or half a dozen of another that allows you to maybe find peace with things we cannot change.
Another interim result of globalization, and this is where Atlas truly shrugs and the Ayn Rand novel of economic theory falls to pieces, is that the rich will get richer at an accelerated pace. I am not necessarily talking about the innovators and hardest working, either. It is the people who already have money and invest it in global stocks that will widen the income gap. Before things settle and all wages rise as worldwide demand for goods and services explodes, corporations will profit immensely off arbitraging cheap labor around the globe.
It matters how wealthy people view the purpose of their investments. If it is only to increase their wealth, we are in trouble. If, on the other hand, they view their investments as a means to make the world better for everyone, we have a chance of getting through this transition without war. A benevolent prevailing attitude, we have to believe, will manifest in positive ways. We can fix almost anything in mutual caring and almost nothing in self-interest.
I do not know if a society can survive where there is an extended period of huge wealth inequality in it. I suspect this state of affairs is not healthy. I don’t believe any architect of a durable society would draw things up this way. We better be careful now.
We are powerless to alter the forces of globalization. Trade wars and border walls are futile efforts that will absolutely fail and likely cause economic calamity, the fiscal equivalent of plugging the hole in the dike with our thumbs before the dam bursts. Even if we destroyed the internet, all computers, the entire communications infrastructure and grounded every satellite, it would not end the march toward globalization. You can’t undo knowledge. The impossible is easy to re-create after you have already done it once.
The real problem is that fear of the unknown drives us to build false fronts that look like the familiar past as the world continues to change out of sight behind them. What we need is the wisdom to realize the biggest problems our globe faces affect all of us.
We cannot possibly save ourselves at the expense of everyone else without creating the toxic byproduct of malice in all. It is a tall order to rally around. Dare we look to a higher calling of benevolence that unites all of us?
Roger Marolt doesn’t believe anger can be a uniting force. Email at roger@maroltllp.com.
