{"id":4192,"date":"2022-10-13T04:50:20","date_gmt":"2022-10-13T08:50:20","guid":{"rendered":"https:\/\/americancompass.beckandstone.com\/?page_id=4192"},"modified":"2023-10-10T15:21:16","modified_gmt":"2023-10-10T19:21:16","slug":"globalization","status":"publish","type":"page","link":"https:\/\/americancompass.org\/globalization\/","title":{"rendered":"Globalization"},"content":{"rendered":"\r\n
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Globalization<\/h1>\r\n\t\t\t

Ensuring demand for, and investment in, American workers<\/h2>\r\n\t\t<\/div>\r\n\t\t
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Overview<\/h2>\n

Globalization has produced a radically different result<\/a> from the widely shared prosperity that its advocates promised. Instead, production shifted from some countries to others, taking labor demand with it and leaving behind a weakened industrial base, collapsed communities, and poor employment prospects. These shifts result not from genuine comparative advantage, but rather in response to aggressive government subsidies and the availability of exploitable labor in countries like China. Uncontrolled immigration and temporary work programs have a similar effect in reverse<\/a>, flooding some countries with additional labor that releases the pressure on employers to pay good wages or invest in higher productivity.<\/p>\n

This form of \u201cfree trade\u201d is not the epitome of free-market capitalism; it is the antithesis<\/a>. Economists and policymakers who believed that capitalism is \u201cjust another word for economic freedom\u201d assumed that the free flow of goods, people, and capital across borders would automatically generate prosperity. But capitalism relies upon the mutual dependence of a nation\u2019s capital and labor to produce good outcomes for both, and for consumers, too. Globalization has severed those bonds, urging the owners of mobile capital to forsake the interests of their fellow citizens and pursue higher profits through labor arbitrage abroad. American workers, their families, and their communities paid the price. The nation\u2019s industrial strength, capacity for innovation, and economic resilience declined.<\/p>\n

China poses a particular problem. Globalization\u2019s rise coincided with the Cold War\u2019s end, in part, because a global free trade system that incorporated the Soviet bloc was unthinkable. But the \u201choliday from history\u201d of the 1990s created a presumption that liberal market democracy was on the march everywhere, and globalization\u2019s proponents argued that incorporating China into a global marketplace would accelerate its own liberalization. They were wrong<\/a>. Instead, China changed us\u2014corrupting the free market, distorting investment flows, capturing valuable industries, and even exporting its authoritarian politics through campaigns of economic pressure.<\/p>\n

At American Compass, we work to understand why globalization has failed and what alternatives exist. We develop approaches through which policymakers can rebalance America\u2019s role in the global economy.<\/p>\n

The Regaining Our Balance<\/em><\/a> collection presents a comprehensive critique of how globalization has gone wrong, including Oren Cass\u2019s seminal essay,\u00a0Searching for Capitalism in the Wreckage of Globalization<\/em><\/a>, and Senator Jeff Sessions\u2019s reflection on how conservatives, himself included, were led astray<\/a>. In Wrong All Along<\/em><\/a>, page after page of quotations from an overconfident elite exposes the flawed ideology that has driven globalization; in Where\u2019s the Growth<\/em><\/a>, chart after chart depicts the negative economic results. Other essays dig deeper on particular facets of the failure, including Senator Marco Rubio\u2019s assessment of China\u2019s ascension to the WTO<\/a> and Michael Pettis\u2019s economic analysis of how free trade theory has broken down<\/a> in practice. The Guide to the Semiconductor Industry<\/em><\/a> provides a concrete example of these forces eroding American leadership and prosperity.<\/p>\n

While evidence for globalization\u2019s success is scarce, the market fundamentalism prevalent on the right-of-center has traditionally ignored this reality, instead pushing a narrative in which America has always embraced an open economy and any alternative would be worse. The Rebooting the American System<\/em><\/a> collection confronts these myths. In fact, the American economic tradition historically resisted global entanglement and the economy developed into an industrial colossus with the help of aggressive public investment and high trade barriers. Oddly enough, as John Burtka observes in Don\u2019t Trade on Me<\/em><\/a>, free trade dogma was imported to America by the antebellum, secessionist South. The Reagan-era quota<\/a> on Japanese vehicle imports, which strengthened domestic manufacturers and gave birth to a massive new industry in the American South, provides compelling proof that a different approach can work.<\/p>\n

Examples like these point toward possible solutions today. The Balancing Act<\/em><\/a> provides a comprehensive overview of interventions that could help bring American trade, immigration, and investment flows back into balance. The Moving the Chains<\/em><\/a> collection details a range of strategies for reshoring American industry and innovation, including Willy Shih\u2019s proposal for pre-competitive consortia<\/a> and Michael Lind\u2019s proposal for local content requirements<\/a>. Fortunately, the unthinking consensus that encouraged mockery of anyone who questioned globalization\u2019s wisdom has collapsed, and policymakers are beginning to act.<\/p>\n<\/div>\n\t\t\t

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