Right now up in Canada a bunch of people (both police and protesters) are running around in gas masks. Everyone seems to be very upset over one word: “Globalization.” If you read a smattering of economic theory you will find many positive arguments for globalization. It is true that reducing tariffs will increase trade and create wealth (but for whom?) So, what’s the problem? I would like to suggest that it might be the fact that most of the proposed plans for globalization deal with goods and not labor. In other words, If you grow corn you can export it without paying a tariff but, you cannot export your services as a grower of corn, that is, as a laborer.

As a strong proponent of the idea that “the best government is that which governs least” I am theoretically in favor of globalization, provided that it is implemented along with measures to make migration from one country to the next easier for workers.

Oh My God the US is Going to be Overrun by Poor, Brown Mexicans!!

Exactly. Now calm down. Imagine that you are a multinational corporation. You want to make sprockets cheap, but US labor is expensive. Yay! There’s NAFTA now you can move your factory and send the goods back home with fewer tariff costs. Sprockets are cheaper for people in the US and so Mexicans got some jobs. Well, the jobs aren't that great and every time they threaten to get a union together you can just threaten to leave. Life is good.

Now, let’s give every Mexican the same power as the multinational. Never mind forming a union! They’re all going to Disney World, (or the US rather) where labor prices are higher. Of course once enough Mexicans go to the US the price of labor in the US will start to fall and the price of labor in Mexico will start to rise. (That’s supply and demand in action, baby) In other words, the labor market in the free trade zone starts to equalize. It is no longer possible to move a factory to a poor nation to exploit low labor costs. Now you just have to put the factory in the most logical place (ie. where it is near to the resources it uses, on a major shipping route) Factories become more efficient, more workers have a stable enough power bases and enough other employment options to unionize. The real upward spiral of wealth begins.

I’m not an economist and this is just a theory but it seems to me, that if we aren't ready for free trade of labor then we aren't ready for free trade. Please add to this node, oh wise everythingians with you ideas on the subject . . .

Log in or register to write something here or to contact authors.