Saturday, July 2
John Tamny's silly defense of globalization
This happened on John Batchelor's Friday show, in which Tamny (and John) strongly criticized Donald Trump's criticism of globalization. (Podcast; 19:26 minute mark) But in attempting to defend globalization Tamny portrayed globalized trade as the reason for the cost of an automobile coming within range of the common man. And Batchelor chimed in with his recollection of how television sets became affordable for Americans because of exports.
Yes, exporting Ford cars to Sichuan Province and villages in Peru were what brought their price down. And I well remember that exporting TV sets to Phnom Phenh and the African bush were what put the contraptions within reach of the average American budget.
Gentlemen, innovation brought the prices down. Had nothing to do with export of those technologies.
Now look -- globalization, as with a long list of other terms, has been accorded so many meanings that it's now useless to debate it without adding such a large number of qualifying statements that the thread of the argument can only be followed by the most tenacious. But the bare bones of the concept -- the free interchange of people, ideas, and goods across all national boundaries -- is in theory all to the good. It's when the bones get fleshed out with economics, finance, politics, defense strategies, and human nature at its worst that the troubles with globalization begin.
And the troubles began early in the modern iteration of globalization when countries that excelled in sea-faring navigation and with access to advanced weapons decided to turn less developed regions of the world into plantations in order to enrich themselves.
The world was barely starting to recover from the age of Western colonization when the post-war Japanese got the idea to turn their own country into a factory plantation that became an export engine with which the United States and other Western nations couldn't compete -- not without a lot of fiddling with currencies and unpleasant trade barriers.
Then the Chinese decided to copy Japan's idea. The difference being that the Chinese population dwarfed the Japanese one and was far less homogeneous, and far less democratic. That was when the horror story of the modern era of globalization began, as Chinese rulers emptied out China's countryside and squished hundreds of millions of Chinese into city factories.
The Faustian bargain struck between American business and China was that Americans provided the innovation, which was then turned over to Chinese factories to crank out U.S. goods at far below what it would cost to make them in the USA -- factories which then used the blueprints given them by American companies to counterfeit U.S. products, which were then sold in the 'developing' world at far below what American exporters could afford. The story was repeated in West European countries that also used China as a factory plantation.
Meanwhile, Western governments were realizing that unrestricted globalization had unleashed so many ills, including globalized trade in financial instruments that were one big Tulip Bulb Bubble, that they began talking about globalizing government. Which was another way of saying 'wiping out national borders,' which undid the concept that globalization crosses borders. Gradually the arguments for globalization were being replaced by the argument for one-world totalitarian government.
And here we are today, with people as diverse as hard-core leftists and right-wingers making common cause to stop the juggernaut from being built before it crushes all humanity.
Donald Trump's supporters, whatever the flaws in his criticism of globalization, are as much a part of this gathering storm of protest as the "Leave" voters in the United Kingdom. The wisdom of the crowd recognizes that brakes have to be applied to all things unrestricted when it comes to globalization, whether this is in finance, trade, economics, or the movements of populations.
Meanwhile, China's rulers were learning the downside of the saying "A rising tide lifts all boats," which is the motto of modern globalization. Just so, a rising tide of relative prosperity in China meant that poorer countries could also turn themselves into factory plantations and in this way cut into some of China's exports.
And so it goes, a race to the bottom, and the entire race being run on a treadmill of exports.
Of course there is a way out, but societies will have to get more desperate than they are today before they jump off the treadmill. So, barring a large-scale outbreak of common sense, the governments and economists driving the globalized exports mania will have to be knocked off the treadmill.