What Happened With Globalization?

Non-zero sum, egalitarian	Non-zero sum, non-egalitarian
Zero sum,egalitarian	Zero sum, non-egalitarian

I hate to break it to Carl Bild, who, in his paean at Project Syndicate to globalization, longs to “restore faith” in it:

The strong will always manage, but the weak will bear the burden of a nostalgic protectionism that erodes the benefits of globalization. At the World Economic Forum’s Annual Meeting in Davos this year, Chinese President Xi Jinping was the one extolling the virtues of globalization, while many Western business leaders wandered the halls trying to sound concerned for the supposed losers of the process.

The communists are keeping the globalization faith; but the capitalists seem to have lost theirs. This is bizarre – and entirely out of sync with past performance and current facts. We have every reason to be confident in a process that has delivered more prosperity to more people than anyone could have dreamed of just a few decades ago. We must not be shy in defending globalization and combating reactionary nostalgia.

We can have a brighter future – but only if we don’t seek it in the past.

but it’s not faith that globalization needs but empirical evidence. And the line isn’t drawn between “communists” and “capitalists” but within “communist” countries or within “capitalist” ones.

Consider my little diagram above. What actually happened in globalization? Let me define a few terms. “Zero sum” means that whatever is lost by one participant is gained by another. “Egalitarian” means more or less evenly distributed within the economy or society of a participant.

A lot depends on what actually happened. I think there’s mounting evidence that globalization largely consisted of redistributing wealth from poor or middle income people in rich countries to rich people in poor countries or rich and secondarily the poor in poor countries. Whether you think that’s a benign process may depend on whether you’re a rich person or not.

It makes a huge difference whether globalization has been non-zero sum and egalitarian or zero sum and non-egalitarian.

Consider the evidence I produced a few weeks ago about the results of NAFTA. If that analysis was true Mexico benefited substantially by it while the U. S. benefited hardly at all. But who in Mexico benefited and what actually happened in the U. S.?

If poor or middle income people in Mexico did not benefit nearly as much as Mexico’s rich did, it would go a long way to explaining why NAFTA did not stem the flood of illegal immigration from Mexico to the United States as its proponents claimed it would. And, if there was little net benefit in the pact to the United States but poor and middle income Americans were hurt while rich Americans got even richer, that’s a reasonable explanation for what we’ve actually seen.

So, produce your evidence. Don’t ask us to take it on faith.