Your dream is another's nightmare-yet another view on globalization

I saw an interesting question recently raised in a forum for debate. The question was “Has globalization hurt American workers?”

It would be wonderful if the answer to this question was as simple as the question itself, but perhaps that is the challenge, making a very complex answer simple. At first sight, the pairing of globalization with worker always conjures up an uncomfortable vision of displaced jobs, so the majority will quickly opt to say yes, globalization is harmful to American workers. But globalization is far more complex than just the transfer of some jobs overseas and outsourcing of others. Globalization is a standardization of processes and procedures, to some degree you could even argue it is a “dumbing down”, of how things are and should be done, and a relaxing of boundaries and barriers to a host of activities, all supported by the ability to transfer knowledge around the globe at the speed of light.

It can be argued globalization is the Dr. Jekyll and Mr. Hyde of our economic activities, for it is responsible not only for the fact that socks once made in a North Carolina mill where Great Aunt Sally worked are now woven in Bangladesh, but also for the fact you can buy those socks at the local Wal-Mart for about 1/3 of the cost in real dollar terms of those made by Great Aunt Sally, with equal or better quality and a far greater variety of color and style. And the money we saved on the socks? Well, it will probably go toward buying that new flat screen TV that is all the rage now, even if it is made in China. Globalization has allowed us to feed our seemingly insatiable appetite for more and better goods, funded by easy credit thanks to the savings of the rest of the world, which we plan to pay back with future earnings, which we suddenly find we may or may not realize.

So that seems to be the conundrum that this question begs us to solve. Globalization is both harmful and helpful, often at the same time, affecting you and I in ways that are unique to our own situation, but does the good outweigh the bad? For that reason, I choose to answer that globalization does hurt many American workers in the short term but that hurt is far from fatal; if anything, the current hurt might be an overdue and much needed wake up call to the change that is necessary now for any prospects of maintaining a competitive niche in the global economy.

Let’s go back to Great Aunt Sally for a moment. Why is the mill closed today? When Great Aunt Sally got her job the only skill she needed was a pair of agile hands and the ability to see and hear, and she had little else to offer. The mill was there because it had moved from its original location in New England where the increased cost of labor and shortage of low skilled workers had made it impossible to compete as a few more farsighted entrepreneurs had discovered they could make socks for less money in North Carolina. And what happened in New England? Well, after a period of a little hurt, the workers with the agile hands learned new skills and begin making toasters and transistor radios and light bulbs. Soon these goods too were under pressure, not only from North Carolina this time, but now also from Japan and Korea, and then Mexico. So again, a little hurt to readjust and retrain, and the New England workers were building instruments, medical devices, and some were even designing chips and writing software or selling derivatives and bond options. Technology was changing rapidly, society had become more mobile, modern highways and railways were being built allowing efficient and economical transportation of goods over greater distances, in fact, we were so efficient and made such great products that most of the world wanted to buy our products and services. For the majority of workers, even with these more frequent and disruptive changes, expectations for a better future were high and some sacrifice was necessary to make that happen. Our lifestyle and our standard of living became not only the “American dream”; it became the “World dream”. In fact, Great Aunt Sally probably even helped this transformation along. She was determined that her sons and daughters would have a better life than she so a share of her earnings, however meager, was put away to help make that possible. I think we all know the rest of the story. Great Aunt Sally’s children not only finished high school, one even went to college, as did some of their friends, and after graduating, all found opportunities far more exciting than watching a loom clack back and forth all day.

Globalization is allowing that very same story to happen today, but for far more people than at any time in history, and Great Aunt Sally’s savings have been replaced in America’s coffers by those from far away places. That universally powerful dream or expectation of a better life is being realized from Bangalore to Bangkok, from Budapest to Beijing, all aided by the standardization and spread of knowledge and the absence of barriers allowing goods and services to flow freely around the world, both such important components of globalization. This hope and aspiration for a brighter future which is driven and fed by globalization allows the industrialized and rich countries to harvest the more plentiful and less costly resources and labor of the developing world which the developing world is willing to temporarily sacrifice in the belief that it will bring a better future. And yes, those sacrifices are not always pretty. Exploitation of labor, environmental degradation, corruption and violation of human rights are a few that quickly come to mind. But how many of us really know or can feel the motivating power of that dream for a better life held by the young seamstress willing to work 12 hours a day/6 days a week to earn $30.00 a month, half of which she will save to insure an even better life for her child. Is it mandatory for us to force our standards and wages as the benchmark when in her country and situation she is better of than most and no less satisfied with her life than we are?

And here lies again the conundrum- we willing and frequently buy and discard the products of that young lady’s cheap labor, often paid for by money borrowed from her savings, all the while complaining that she is hurting our future, all the result of globalization. Of course she would love to have our house, our cars, our clothes, our iPod and our trinkets and, in exchange for the chance to someday realize that dream, she is willing to make them for us under conditions we find demeaning, even letting us borrow her money to buy them, because she has seen what is possible with sacrifice and savings.

My question would be have we, the American worker, reached the end of our dream for a better life? Have we become so addicted to conspicuous consumption that we are no longer willing or able to make sacrifices? Are we no longer able to think of ways to create new and better products? Are we so selfish that we are unwilling to share our dream with the rest of the world? Are there no cures for cancer, AIDS or malaria? Is this the best we can do and have we reached the point where we feel we need to defend it, at all cost, even to the brink of war if that is what it takes in the end? Or has the sock factory just moved again and is it time for the workers to learn a new skill, a skill that will allow them to become more valuable than before?