Is it possible to stop globalization and at what cost? Would we even want to?

Hi I understand that you are a busy man and I apologize in advance for not being able to keep my letter short. I also apologize if some of the terminology is lacking since I don’t live in the US and English is only my second language. I’ve been thinking about globalization and how it effects workers, especially when outsourcing. President Trump talked about bringing the jobs back to America. Is that even possible? It seems to me that this is next to impossible unless workers in the western world are willing to accept a lower standard of living (if by high standard of living you mean being able to consume). If America (or the western world) decides to make it harder or impossible for companies to leave, the jobs may stay in America. However, the companies will still look to increase profits and if they can’t do that by lowering employment costs (by moving production abroad where the wages are cheaper and safety regulations and labour legislations are weaker), they have to make up for it by rising the price of the product they are selling. This will lead to American workers no longer being able to afford the product they are producing. As an example, a smart phone being made in some Asian countries is cheaper than a phone being made in America with American wages. Another example would be clothes. The big companies in the clothing industry using child workers and exploiting them terribly just to keep the prices down and the profits up. Now, would American workers accept this? Everything becomes more expensive and yes, while you may have a job you still can’t buy anything anyway. Another possible result could be that while the production stays in America, most of it will be automized and the workers will lose their jobs to machines rather than foreign labour force. Is it possible that we will see the economy and welfare decline in the western world and eventually Asia and South America will take ”our place”. That the tables will turn? And how will we handle that? If the west stop outsourcing, what will happen in the countries where the jobs are now? What will happen there when the factories close down and move back? Will that alone effect us? I'm sure those jobs helps those economies and if weakened, they would not be able to trade with us in other areas. Is the solution to somehow introduce a limit to how much profit a company can make? In that case it wouldn’t benefit the cooperations to move abroad. On the other hand, I guess they could just register as a foreign company and somehow by-pass it. Or is part of the solution to find new markets, creating different kind of jobs and spend more time and money on education and innovation? How do we handle people that struggle in school and won’t be able to qualify for these new jobs? Another dimension of globalization is the environment. Trade agreements like TTIP and Ceta makes it easier to send goods across the world in planes and trucks, and yet most of us agree that we need to do something about how humans effect the environment. Doesn’t these international trading deals add to the problem? Have you addressed these questions in depth earlier or is it something you are willing to talk about in the future? Thank you for doing what you do and thank you for your time. Regards, Daniel from Sweden

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  • Daniel Fjäll
    published this page in Ask Prof. Wolff 2017-07-13 06:15:33 -0400