Mutual dependence between capital and labor, not mere “economic freedom,” is what Adam Smith so ably described. Globalization destroys it.
The problem was that the powerful and wealthy saw no problem. They benefited from closing American factories and moving jobs abroad. They benefited from lower wages. This was their agenda from the start.
Each argument for globalization appeared sensible on its own terms, but each was built upon faulty premises or failed in the final analysis to support the ultimate agenda.
Policymakers can act on several fronts: market access and investment rules to govern the flow of goods and capital; sovereign actions taken in relation to global institutions; and immigration policy that affects labor market composition.
The era of globalization has coincided closely with the onset of precisely those problems that a clear-eyed analyst might have predicted and delivered outcomes contrary to the ones its ideologues envisioned.
Commentators and policy analysts respond to our analysis of globalization and proposals to restore balance to the American economy
In the three decades since the Cold War’s end, politicians and economists have been conducting an unprecedented experiment on humankind. Their hypothesis is that the free flow of goods, capital, and people across borders will deliver liberty and prosperity worldwide. Globalization, according to this theory, which they present as fact, is an unstoppable force that accelerates economic growth, spreads liberal democracy, and lifts the world’s poor. No rational basis could exist, according to the bipartisan consensus, for thinking otherwise.
In America, the experiment has failed and sent the nation reeling. Regaining our balance requires an understanding of how and why the experiment failed, acknowledgment of that failure by the theory’s proponents, and a new approach that builds upon the lessons learned. This collection tackles each of those challenges. Introductory essays revisit the economic theory on which globalization was built and the ideology that promoted its embrace. Research traces the arguments made and the outcomes produced. And a new menu of options offers policymakers the framework and tools they will need to move forward.