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 . . .