In matters of international trade, globalization ought to be valued above protectionism.
The Negative
There are many arguments against globalization.
Widening inequality in the developed world. Although globalization has benefitted the developed world by increasing the number of jobs, it has reduced middle class employment in the developed world. This has widened inequality and created a political backlash.
Michael Coates, Michael Coates is president and CEO of the Americas region at global communications consultancy Hill+Knowlton Strategies, August 17, 2016, Huffington Post, Time for Business Leaders to Wake Up: Globalization is dead for a generation, https://www.huffingtonpost.com/michael-coates/time-for-business-leaders_b_11497424.html
Unfortunately, many of these redistributed jobs have come at the expense of Western middle classes, including in the United States. The idea that when labor-intensive jobs leave Western countries they will be replaced by higher-paying jobs in the knowledge economy hasn’t panned out. Attempts to retrain workers have been insufficient, and displaced workers often end up in low-paying jobs or out of work entirely. A study by MIT economist David Autor showed that, between 1991 and 2007, before the financial crisis had even hit, the U.S. had lost roughly 1 million jobs due to low-wage competition from China. Now, it seems, is the time of reckoning. The public is angry, and Trump and former Democratic presidential hopeful Bernie Sanders have played this card to great effect. In July, Trump raised an impressive $82 million, not from businesses but through small donations from passionate supporters, further highlighting the current resentment. Even Trump’s famous “Americanization, not Globalization” is remarkably similar to Sanders’ rhetoric, which in turn moved Hillary Clinton to oppose her own administration’s Trans-Pacific Partnership agreement. The recent Brexit vote in the United Kingdom showed that people in other Western countries are also tired of declining incomes and lost jobs, with many of them blaming globalization.
This inequality is sustained trough wage repression and violence.
Michael Yates, November 2016, Monthly Review, Measuring Global Inequality, https://monthlyreview.org/2016/11/01/measuring-global-inequality/ Michael D. Yates is an economist and a labor educator, and associate editor of the socialist magazine Monthly Review.
Capital now moves freely across borders, seeking ever cheaper labor and further limiting labor’s power. In the poorer countries to which capital increasingly flows, notably China and India (but also Vietnam, Indonesia, and elsewhere in Southeast Asia), elites seek to keep wages low so that corporate profits remain high and their share of those profits continues to rise. At the same time, tens of millions of peasants have been forced from their land, providing a ready reserve army of labor in towns and cities. States do whatever is necessary to maintain safe and prosperous havens for transnational companies, including extreme violence. They also employ the time-honored tactics of divide-and-conquer, pitting ethnic or religious groups against each other. Occasionally, governments will allow for some minimal relief from the misery of the masses of workers and peasants, if only to neutralize more aggressive antagonism of those who have lost income and wealth, or those whose upward mobility seems permanently blocked. When people who toil for a living are quiescent, capital is given free reign, and governments are more than willing to grant businesses and their wealthy owners every kind of concession, from tax exemptions to abolition or non-enforcement of environmental protections. In recent years new protest movements have broken out around the world, all of them arguably rooted in burgeoning inequality or the structures that cause it. The Arab Spring was fueled by suppression of workers’ rights, increases in the prices of necessities like bread, capital-friendly political leaders, an absence of democracy, theft of peasant lands, lack of employment opportunities, declining real wages, and much more. Workers in China have been striking and protesting in record numbers, angered by long hours, low wages, unsafe workplaces, poor or no housing, unbreathable air, an autocratic government, and the seemingly unlimited wealth and power of their bosses. In India, peasants, under the banner of communist parties, have begun to wage guerilla war. In France, workers take to the streets every time the government seeks to lower their living standards. In the United States, uprisings from the Occupy movement to Black Lives Matter and the Fight for $15 have taken place. The same is true in Canada. In nearly every country, resistance is stirring. Yet despite these efforts, victories have been fleeting. A military dictatorship once again rules Egypt. Civil war engulfs Ukraine. China’s undemocratic and autocratic Communist Party is still firmly in control of the country’s politics and society. The Venezuelan government is struggling to continue the Bolivarian Revolution begun by Hugo Chavez, but plummeting oil prices and U.S. sabotage have put Venezuela’s future as an important outpost of noncapitalist development in jeopardy. Throughout the world, protest has often devolved into ethnic and religious violence and warfare
Capitalism bad. Globalization has pushed capitalism world-wide, increasing the power of elites at the expense of democracy.
Adnan Al-Daini / November 29th, 2016, Globalization and Free Market Capitalism are tearing our societies apart, https://dissidentvoice.org/2016/11/globalization-and-free-market-capitalism-are-tearing-our-societies-apart/
Globalisation and free-market capitalism are the dominant systems influencing the lives of billions in our dysfunctional world. These doctrines are pushed by corporations powerful enough to dictate to politicians their demands and not the other way round. Moreover, democracy is bent, distorted and subverted to serve the insatiable greed of the very few at the expense of the rest of humanity and our fragile planet.
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Nationalist backlash and the collapse of democracy. Failure to limit and balance against globalization leads to a nationalist backlash, the collapse of democracy, and world war
Roberta Stefan Foa, December 6, 2016, Foreign Policy, It’s the Globalization, Stupid, https://foreignpolicy.com/2016/12/06/its-the-globalization-stupid/, Roberto Stefan Foa is a lecturer in politics at the University of Melbourne and a principal investigator of the World Values Survey. He has served as a consultant to the United Nations, Organisation for Economic Co-operation and Development, and the World Bank in Washington, D.C.
Why have citizens across Western democracies become increasingly nationalistic, opposed to mass migration, and suspicious of international institutions? One answer is that this is a consequence of the financial crisis, which has left deep pockets of economic deprivation and underemployment. But that answer is clearly wrong, because these trends have been in place for the better part of 30 years. A more accurate answer would be that they reflect an inherent tension between national democratic sovereignty and elite-led efforts at global integration, and that this tension has now reached its breaking point As economies and societies around the globe become more and more interconnected and bound within transnational rules and institutions, the range of policy options available to domestic policymakers has declined. Such constraints range from formal rules, such as the acceptance of the free movement of peoples within the European Union, or the asylum obligations that are outlined under the U.N. Convention Relating to the Status of Refugees, or the limits on deficits stipulated in European Union’s Stability and Growth Pact and the implicit economic constraints imposed by global financial and investment flows. Thus, on issue after issue, from corporate taxation, to control over immigration, to fiscal and monetary policy, national elites frequently find themselves unable to deliver policies consistent with public preferences. Instead they have blamed international institutions for their inability to take actions that they privately do not condone. In this way, politicians feel obliged, in the words of Hillary Clinton, to maintain “both a public and a private position.. Yet the constraints on national sovereignty entailed by global markets and institutions has weakened the mechanisms that once translated popular views into public policy, leading to a “democratic deficit”’ that has left citizens increasingly frustrated with democratic politics, and increasingly with the democratic system itself. At the same time, the institutions of “global governance” have failed not only to provide avenues for popular participation, but also to deliver outcomes that such participation would be liable to generate, such as compensation for the losers from global trade, or protection of the identities and ways of life of local and national communities. In the words of Larry Summers, one of global integration’s advocates, it is a project “carried out by elites, for elites, with little consideration for the interests of ordinary people. This frustration has set up a dangerous dynamic, the consequences of which are now only too visible. In many countries, the only viable challenge to an increasingly homogeneous set of decision-makers comes from political parties or movements established by outsiders, such as the tea party movement and now Donald Trump in the United States, or populist parties of the right and left in Europe. These movements explicitly set themselves against a metropolitan and cosmopolitan elite which, they claim — not always without reason — routinely ignores popular demands and policy preferences. As the differences between establishment parties on the left and right have dwindled in many countries, the only way for voters to effect a change in policy has been to rally to parties that reject many of the traditional rules of the democratic game. In this way, as politicians’ responsiveness to citizens has decreased, citizens have been encouraged to turn away from democracy. Where will this lead? History’s answers are not encouraging. In the runup to World War I, it was widely believed that a new liberal order had been constructed under the aegis of the British, French, and Habsburg empires, yet this world was thrown into utter disarray by the upheavals of war and the Great Depression. Far from eroding the nation-state, the era of elite-led global integration in the years after 1989 has similarly failed to create legitimate transnational institutions, leaving national democratic communities as the primary source of identity, security, and loyalty for citizens. Now that the defenders of the traditional nation-state are regaining the power they have coveted for so long, the future of global governance rests in their hands. At stake is whether they succeed in finding a new balance between national sovereignty and transnational cooperation — or instead, return us to an era of mercantilism, inter-state competition, and great-power warfare.
Loss of manufacturing. Trade deals have arguably facilitated the move of US manufacturing abroad, undermining the economy.
Peter Navarro is a business professor at the University of California-Irvine; he holds a Ph.D. in economics from Harvard University. Wilbur Ross is an international private equity investor. Both are senior policy advisors to the Trump campaign, September 29, 2016, Scoring the Trump Economic Plan: Trade, Regulatory, and Energy Policy Impacts, https://assets.donaldjtrump.com/Trump_Economic_Plan.pdf
Just why did the US growth rate fall so dramatically? Many left-of-center economists – and the Obama Administration – have described this era of slower growth as the “new normal.” They blame this plunge at least in part on demographic shifts such as a declining labor force participation rate and the movement of “baby boomers” into retirement. This view of America’s economic malaise is incomplete – and unnecessarily defeatist. It ignores the significant roles higher taxes and increased regulation have played in inhibiting US economic growth since the turn of the 21st century as well as our ability to fix the problems. This new normal argument also ignores the self-inflicted negative impacts from poorly negotiated trade deals and the failure to enforce them. One need look no further than the lengthy list of transgressions detailed in the National Trade Estimate for examples. These bad deals include most notably NAFTA, China’s entry into the World Trade Organization in 2001 – a critical catalyst for America’s slow growth plunge – and most recently Hillary Clinton’s debilitating 2012 South Korea trade deal. China’s 2001 entry into the WTO, negotiated by President Bill Clinton, opened America’s markets to a flood of illegally subsidized Chinese imports, thereby creating massive and chronic trade deficits. China’s accession to the WTO also rapidly accelerated the offshoring of America’s factories and a concomitant decline in US domestic business investment as a percentage of our economy. As David Dollar of Brookings notes, US direct investment flows to China were “fairly stable at about $1.6 billion per year in the period 1999-2003” but “jumped in the period 2004-2008 to an annual average of $6.4 billion.”7 Justin Pierce of the Federal Reserve Board of Governors staff and Yale School of Management’s Peter Schott attribute most of the decline in US manufacturing jobs from 2001 to 2007 to the China deal. David Autor of MIT, David Dorn of the University of Zurich, and Gordon Hanson of UC-San Diego have described a “China trade shock” that has raised the unemployment rate, depressed wages and the labor participation rate, and reduced the lifetime income of workers in American manufacturing most “exposed” to the shock. Most recently, the 2012 South Korea trade deal was negotiated by Secretary of State Hillary Clinton – she called it “cutting edge.” It was sold to the American public by President Obama with the promise it would create 70,000 jobs. Instead, it has led to the loss of 95,000 jobs and roughly doubled America’s trade deficit with South Korea
Trade deficit. The trade deals have also increased the trade deficit, which is a threat to the economy.
Peter Navarro is a business professor at the University of California-Irvine; he holds a Ph.D. in economics from Harvard University. Wilbur Ross is an international private equity investor. Both are senior policy advisors to the Trump campaign, September 29, 2016, Scoring the Trump Economic Plan: Trade, Regulatory, and Energy Policy Impacts, https://assets.donaldjtrump.com/Trump_Economic_Plan.pdf
As the GDP equation illustrates, trade deficits matter to economic growth. When the United States runs massive and chronic deficits as it has been doing since the turn of this century, trade deficits matter a great deal. This point is often lost on those who look only and singularly at the growth in US exports since the advent of globalization. For example, exports in goods have rapidly risen from $59.7 billion in 1970 to $1.5 trillion by the end of 2015 in nominal dollars. Along the way, these exports have created new jobs and generated additional income and wealth. However, imports in goods have risen at an even faster pace, from $40.9 billion in 1970 to $2.3 trillion in 2015. Although some of our imported goods contain American export content, they still represent a significant subtraction from GDP growth, even after accounting for the positive contribution of services to the trade balance. Trump’s goal is not to reduce overall trade flows but rather increase them. Through tough, smart negotiations, he will improve our trade deals, increase our exports, and displace some goods we now currently import with products made in America. Scoring Trade Deficit Drag In 2015, the US exported $2.3 trillion worth of goods and services and imported $2.8 trillion for a total net exports deficit of $500 billion. When we divide this $500 billion trade deficit by the change in the nominal GDP of $644 billion from 2014 to 2015, we see that the trade deficit represents 78% of the net gain in nominal GDP relative to the 2014 period. This comparison suggests that trade deficits matter a great deal when it comes to GDP growth. To illustrate this, suppose the US had been able to completely eliminate its roughly $500 billion 2015 trade deficit through a combination of increased exports and decreased imports rather than simply closing its borders to trade. This would have resulted in a onetime gain of 3.38 real GDP points and a real GDP growth rate that year of 5.97%.
NAFTA Bad. We can see the problems manifested in the North American Free Trade Agreement (NAFTA)
Ian Bremmer, September 2016, Superpower: Three Choices for America’s Role in the World, Kindle edition, page number at end off card. Ian Bremmer is an American political scientist specializing in U.S. foreign policy, states in transition, and global political risk.. He’s also the President of the Eurasia Group
Before we commit our country to a new generation of trade deals, let’s revisit the North American Free Trade Agreement. To mark the twentieth anniversary of NAFTA in early 2014, Public Citizen, a nonprofit think tank and advocacy group, published a report on the trade deal’s economic impact. 26 The results were grim. Before NAFTA was enacted, President Bill Clinton pledged that the agreement would create one million new U.S. jobs in the first five years of its life. Instead, according to Public Citizen, “U.S. firms used NAFTA’s new foreign investor privileges to relocate production to Mexico to take advantage of that country’s lower wages and weaker environmental standards . . . creating a massive new trade deficit that equated to an estimated net loss of one million U.S. jobs by 2004.” 27
Bremmer, Ian. Superpower: Three Choices for America’s Role in the World (Kindle Locations 1029-1035). Penguin Publishing Group. Kindle Edition.
Trade protectionism and the threat of trade protectionism can be used to reduce economic disparities and other trade cheating.
Peter Navarro is a business professor at the University of California-Irvine; he holds a Ph.D. in economics from Harvard University. Wilbur Ross is an international private equity investor. Both are senior policy advisors to the Trump campaign, September 29, 2016, Scoring the Trump Economic Plan: Trade, Regulatory, and Energy Policy Impacts, https://assets.donaldjtrump.com/Trump_Economic_Plan.pdf
The Structural Underpinnings of Trade Deficit Drag Critics have attacked Trump as an “isolationist” and a “protectionist” who will start a “trade war.” These attacks reveal a more fundamental lack of understanding of the role trade deficits have played in constraining US economic growth. The prevailing view within the White House and Clinton campaign is that America’s economic woes are short run and cyclical and can be solved through Keynesian fiscal deficits and higher Keynesian monetary stimuli. This Keynesian misdiagnosis has led to a near doubling of America’s national debt during the Obama presidency from $10 trillion to almost $20 trillion and the weakest economic recovery since World War II, all while America’s infrastructure deficit has continued to increase and our military has grown smaller. In contrast, Donald Trump views America’s economic malaise as a long-term structural problem inexorably linked not just to high taxation and over-regulation but also to the drag of trade deficits on real GDP growth. Trade policy factors identified by the Trump campaign that have created this structural problem include: (1) currency manipulation, (2) the equally widespread use of mercantilist trade practices by key US trading partners, and (3) poorly negotiated trade deals that have insured the US has not shared equally in the “gains from trade” promised by textbook economic theory. #1: Currency Manipulation According to textbook theory, balanced trade among nations should be the long-term norm, and the chronic and massive trade deficits the US has sustained for over a decade simply should not exist. This textbook state of balanced trade would exist because freely floating currencies would effectively adjust differences in national domestic cost structures to bring about balanced trade. The problem, however, is that not all currencies freely float. Many are actively managed, and some are pegged to another currency or currency basket. This hybrid international monetary system makes it impossible for market forces to bring about balanced trade and thereby fairly distribute what the textbooks promise us will be the “gains from trade.” A poster child for this problem is China and its narrowly pegged currency. In a world of freely floating currencies, the US dollar would weaken and the Chinese yuan would strengthen because the US runs a large trade deficit with China and the rest of the world. American exports to China would then rise, Chinese imports to America would fall, and trade should come back towards balance. The problem, however, is that China stymies major adjustments. China’s purchases of US treasury securities are one way the Chinese government holds down their currency relative to ours. Maintaining their manipulated currency peg perpetuates the trade imbalance. Effectively, we are borrowing from China to pay for our trade deficit. It is analogous to a money-losing business borrowing money every year to stay afloat. A similar problem exists because of the European Monetary Union. While the euro freely floats in international currency markets, this system deflates the German currency from where it would be if the German Deutschmark were still in existence. 16 In effect, the weakness of the southern European economies in the European Monetary Union holds the euro at a lower exchange rate than the Deutschmark would have as a freestanding currency. This is a major reason why the US has a large trade in goods deficit with Germany – $75 billion in 2015 – even though German wages are relatively high. The Germans, too, are buyers of US Treasuries as are the Japanese. The US runs trade deficits with both of these countries as well as with China. The broader structural problem is an international monetary system plagued by widespread currency manipulation. Of course, a weaker currency stimulates the currency manipulator’s exports, discourages imports, brings about a more favorable trade balance, and the currency manipulator grows at the expense of its trading partners. Donald Trump has promised to use his Treasury Department to brand any country than manipulates its currency a “currency manipulator.” This will allow the US to impose defensive and countervailing tariffs if the currency manipulation does not cease. As Secretary of State, Hillary Clinton neither said nor did anything about this issue and supported China’s earlier entry into the WTO. During her tenure as Secretary of State, she had a chance to engage in corrective diplomatic action, including addressing intellectual property theft, but she did nothing. Whatever she might vaguely promise now on the campaign trail rings hollow against the backdrop of her bad trade deals and past comments on the inevitability of outsourcing. This is an indefensible record documented by none other than President Barack Obama during his 2008 primary victory over Senator Clinton. Her one consistency has been ultimately favoring policies that in the end result in offshoring and expanded trade deficits. #2: Mercantilism and Trade Cheating The global trading order is riddled with trade cheaters. Not coincidentally, China is both the biggest trade cheater in the world and that country with which the US runs its largest trade deficit. The elaborate web of unfair trade practices includes illegal export subsidies, the theft of intellectual property, the aforementioned currency manipulation, forced technology transfers and a widespread reliance upon both “sweat shop” labor and pollution havens. The People’s Republic of China also engages in the massive dumping of select products such as aluminum and steel below cost. It is currently dumping over 100 million tons of steel alone into global markets. China is hardly the only cheater in the world; it’s just the biggest. It is fair for countries to benefit competitively from any inherently lower costs. It is unfair to game the system in addition. When countries cheat to boost their exports, reduce their imports, and protect their own markets, trade becomes more of a zero sum game in which the cheating countries enjoy a disproportionate share of any gains from trade. Their economies grow faster and the US economy grows more slowly. A Trump Administration will not tolerate cheating by any nation. If America’s trading partners continue to cheat, a President Trump will use all available means to defend 17 American workers and American manufacturing facilities from such cheating, including tariffs. Tariffs will be used not as an end game but rather as a negotiating tool to encourage our trading partners to cease cheating. If, however, the cheating does not stop, Trump will impose appropriate defensive tariffs to level the playing field.
Global poverty. Claims that globalization reduces poverty are based on studies by the World Bank and other global economic institutions that promote globalization. These studies only look at a very low standard of income as the measure of poverty. When other quality of life factors are considered, globalization increases poverty.
NC ’14 [8/2/14, Nation of Change provides a free daily newsletter with articles from progressive writers and initiates activistic calls to action, ~ “The Seven Deadly Sins of Capitalism”, https://www.nationofchange.org/seven-deadly-sins-capitalism-1391350401]
5) Poverty. One of the most common arguments for global capitalism is that it helps alleviate poverty. Problem is, global poverty statistics are generated by the World Bank, an institution explicitly designed to promote globalization. Critics argue that (1) the numbers are usually skewed by one or two rapidly developing countries, (2) the definition of deep poverty as a wage of $1.25/day is set arbitrarily low in order to yield the desired stats, and (3) daily wages say nothing about access to potable water, adequate nutrition, healthcare, education, community, and other things that determine quality of life. Moreover, poverty rates mean little when economic disparity has increased so dramatically in recent decades. Actually, a compelling argument can be made that global capitalism doesn’t alleviate poverty but causes poverty. After all, the aim of globalization is to expand markets by infiltrating “undeveloped” (read: self-sufficient) communities and dragging them into the money economy, thus creating new laborers and consumers. Could members of a gift-based, indigenous tribe really be called “poor”? Only by the logic of capitalism, which defines poverty as the inability to purchase one’s basic necessities (which might include designer clothing) from an outside party using fiat currency.
Sovereignty. Economic globalization undermines the sovereignty of the nation-state because it subjects the country to international trade rules
Kenneth Rapoza, November 23, 2016, Forbes, Trump, China, and “Deglobalization” Trade, https://www.forbes.com/sites/kenrapoza/2016/11/23/trump-china-and-the-deglobalization-trade/#7f0743f2fe46
Roughly speaking, the middle class and working class in the U.S., not to mention most of Europe, have barely seen wage increases in 20 years. Democratic national sovereignty and global economic integration run by multinational corporations are, as Harvard economist Dani Rodrik says, “mutually incompatible”.
There is a lot of literature about the value of sovereignty.
War/Imperialism. The globalization of neoliberal capitalism is accompanied by war and and imperial aggression.
Klassen 15 [Jerome Klassen, Associate Lecturer in International Relations; Department of Conflict Resolution, Human Security, and Global Governance; McCormack Graduate School “Hegemony in Question: US Primacy, Multi-Polarity and Global Resistance.” Polarising Development–Introducing Alternatives to Neoliberalism and the Crisis. Pluto Press, 2015 (Marois and Parella, ed.).] 7/15/2016
In the neoliberal period, a new structure of production, accumulation, and class and state formation emerged. With the end of Bretton Woods, the United States was able to run systematic trade deficits with Europe and Asia, which were forced to recycle dollar payments into US Treasury bonds or Wall Street securities. In the process, the dollar was saved as world money, capital controls were weakened in rival states, and the United States was able to run trade and government deficits. At the same time, Wall Street became the centre of global finance, and US firms gained access to new investment funds. Through these new modes of financialisation, the world economy was reconstituted under US centrality. President Reagan’s defeat of the US labour movement also paved the way for a new regime of ‘flexible accumulation’ in the US economy – one based on low wage, deskilled, racialised, gendered and part-time labour markets. Alongside these economic shifts, the United States pursued an aggressive military policy. In Latin America, it backed military coups in Chile (1973) and Argentina (1986), and financed the Contras against the Sandinista government in Nicaragua. After the 1979 revolution in Iran, the United States established Rapid Deployment Forces in the Gulf, and supported Saddam Hussein’s invasion of Iran the following year. After the Soviet Union occupied Afghanistan, the United States also financed the mujahideen resistance to the communist government in Kabul. At the same time, Reagan supported South Africa’s invasion of Angola and labelled the African National Congress a terrorist organisation. Through these international proxy wars, the United States tried to weaken or defeat the anti-imperialist and anti-capitalist resistance of the 1970s and 1980s. It is vital to recognise that, with the fall of the Soviet Union and the transition to capitalism in China, the last obstacles to US grand strategy fell by the wayside. Indeed, after 1990, the United States was able to achieve the fundamental goals of hegemonic liberalism: the globalisation of capital and preeminent power for the United States itself. As a sign of this project, the Defense Planning Guidance of the Bush I Administration called for a strategy to ‘[preclude] the emergence of any potential future global competitor’. To this end, the Quadrennial Defense Review of the Clinton Administration argued that the role of the US military is to ‘sustain American global leadership’, and to secure ‘uninhibited access to key markets, energy supplies and strategic resources’. In line with this, the National Security Strategy of the Bush II Administration aimed to ‘dissuade potential adversaries from pursuing a military build-up in hopes of surpassing, or equalling, the power of the United States’. Likewise, the National Security Strategy of the Obama Administration posits that the United States should ‘underwrite global security’ by ‘renewing American leadership’ and reviving the national economy as ‘the wellspring of American power’. Across the governments of the post-Cold War period, then, a single strategy has been advanced – one of globalising capital and US primacy. To these ends, the United States has engaged in permanent war, intervening in countries such as Panama, Colombia, the former Yugoslavia, Iraq, Afghanistan, Pakistan, Haiti, Libya, Somalia, Yemen, Honduras, Venezuela and Syria. However, US strategy has been challenged, if not degraded, by new dynamics in the global political economy.
Environmental destruction. The spread of global capitalism has resulted in environmental destruction.
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
At the same time as this social reality was brought home to new audiences, capitalism’s drive for growth at all costs was also shown to be the root cause of the ecological crisis facing the planet. 5 The finite limits of natural ecosystems are unable to support the infinite process of expansion that capital must engineer in order to prosper, and the consequences of that conflict are apparent in every new media report detailing the latest evidence of irreversible climate change, biodiversity loss or resource depletion. Nowhere is this crisis more obvious than in the additional pressure on the world’s natural resource base generated by the rise of today’s emerging economies, whose ‘outward turn’ into the global economy has further intensified a rush for land, oil, minerals and other strategic resources that was already driving stocks towards exhaustion. Increasingly, in international conferences as well as local articulations of protest, the connection between capitalist expansion and its ecological consequences is made explicit, with system change recognised as the last and only means of avoiding ecological disaster.While this book focuses primarily on the human poverty of globalised capitalism, the connection between the social and ecological should be understood as an unspoken reality throughout. Hilary, John (2013-10-09). The Poverty of Capitalism: Economic Meltdown and the Struggle for What Comes Next (Kindle Locations 215-220). Pluto Press. Kindle Edition.
Sex trafficking. Globalization leads to survival labor migration, inequality, and sex trafficking
Dana Ragorski, law professor, University of Washington, Indiana International &Comparative Law Review, Vol. 25, Forthcoming , University of Washington School of Law Research Paper No. 2014-24, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473738 DOA: 1-2-15
These push and pull factors are not new. However, they have taken center stage in the era of contemporary globalization.99 Globalization and trade liberalization led not only to greater international exchange of capital and goods, but also to increasing labor migration.100 Alongside general economic benefits,101 globalization increases the wealth gap between countries and between rich and poor within countries. Such wealth disparities feed increased survival labor migration as economic opportunities disappear in less wealthy countries and communities. Those desperate to migrate, however, encounter tightening border controls and limited options for legal migration at the destination countries (although those countries generate a growing demand for such migrant workers), which in turn exacerbates their vulnerability to trafficking.
Other impacts covered in the release include agriculture declines, global violence, eroding of US competitiveness, nuclear proliferation, resource wars, tobacco, water wars, invasive species, and disease spread.
Protectionism can address many of these problems. China benefited from globalization because it protected its industries in the process of globalizing
Dani Rodrik, Spring 2012, This article is adapted from the author’s book The Globalization Paradox: Democracy and the World Economy, Norton, 2011,America’s Quarterly, “Global Poverty Amid Plenty: Getting Globalization Right,” https://americasquarterly.org/rodrik DOA: 1-1-15 Dani Rodrik is Rafiq Hariri Professor of International Political Economy at the John F. Kennedy School of Government at Harvard University.
China’s experience offers compelling evidence that globalization can be a great boon for poor nations. Yet it also presents the strongest argument against the reigning orthodoxy in globalization, which emphasizes financial globalization and deep integration through the World Trade Organization (WTO). China’s ability to shield itself from the global economy proved critical to its efforts to build a modern industrial base, which would in turn be leveraged through world markets. Since 1978, income per capita in China has grown at an average rate of 8.3 percent per annum—a rate that implies a doubling of incomes every nine years. Thanks to this rapid economic growth, between 1981 and 2008 the poverty rate in China (the percent of the population below the $1.25-a-day poverty line) fell from 84 percent to 13 percent, much of it from reducing rural poverty.5 This meant a whopping 662 million fewer Chinese in extreme poverty, a number that accounts for virtually the entire drop in global poverty over the same period. During the same period, China transformed itself from near autarky to the most feared competitor on world markets. That this happened in a country with a complete lack of private property rights (until recently) and run by the Communist Party only deepens the mystery. China’s big break came when Deng Xiaoping and other post-Mao leaders decided to trust markets instead of central planning. But their real genius lay in their recognition that the market-supporting institutions they built, most of which were sorely lacking at the time, would have to possess distinctly Chinese characteristics. China’s economy was predominantly rural in 1978. A Western-trained economist would have recommended abolishing central planning and removing all price controls. Yet without a central plan urban workers would have been deprived of their cheap rations and the government of an important source of revenue, resulting in masses of disgruntled workers in the cities and the risk of hyperinflation. The Chinese solution to this conundrum was to graft a market system on top of the plan. Communes were abolished and family farming restored, but land remained state property. Obligatory grain deliveries at controlled prices were kept in place, but once farmers had fulfilled their state quota they were now free to sell their surplus at market-determined prices. This dual-track regime gave farmers market-based incentives and yet did not deprive the state of revenue nor deprive urban workers of cheap food.6 Agricultural productivity rose sharply, setting off the first phase of China’s post-1978 growth. Another challenge was how to provide a semblance of property rights when the state remained the ultimate owner of all property. Privatization would have been the conventional route, but it was ruled out by the Chinese Communist Party’s ideology. Once again, an innovation came to the rescue. Township and village enterprises (TVEs) proved remarkably adept at stimulating domestic private investment. They were owned not by private entities or the central government, but by local governments (townships or villages). TVEs produced virtually the full gamut of products, everything from consumer goods to capital goods, and spearheaded Chinese economic growth from the mid-1980s until the mid-1990s. The key to the success of TVEs was the self-interest of local governments, which would reap substantial income from their equity stake in the enterprises. China’s strategy to open its economy to the world also diverged from received theory. The Chinese leadership resisted the conventional advice to remove trade barriers. Such an action would have forced many state enterprises to close without doing much to stimulate new investments in industrial activities. Employment and economic growth would have suffered, threatening social stability. The Chinese decided to experiment with alternative mechanisms that would not create too much pressure on existing industrial structures. While state trading monopolies were dismantled relatively early (starting in the late 1970s), what took their place was a complex and highly restrictive set of tariffs, nontariff barriers and licenses restricting imports. These were not substantially relaxed until the early 1990s. In particular, China relied on Special Economic Zones (SEZs) to generate exports and attract foreign investment. Enterprises in these zones operated under different rules than those that applied in the rest of the country; they had access to better infrastructure and could import inputs duty free. The SEZs generated incentives for export-oriented investments without pulling the rug out from under state enterprises. What fueled China’s growth, along with these institutional innovations, was a dramatic productive transformation. The Chinese economy latched on to advanced, high-productivity products that no one would expect a poor, labor-abundant country to produce, let alone export. By the end of the 1990s, China’s export portfolio resembled that of a country with an income-per-capita level at least three times higher than China’s.7 Foreign investors played a key role in the evolution of China’s industries. They created the most productive firms, introduced new technology to the economy, and became the drivers of the export boom. The SEZs, where foreign producers could operate with good infrastructure and with a minimum of hassles, deserve considerable credit. But if China welcomed foreign companies, it always did so with the objective of fostering domestic capabilities. It used a number of policies to ensure that technology transfer would take place and that strong domestic players would emerge. Early on, they relied predominantly on state-owned national champions. Later, the government used a variety of incentives and disincentives to foster joint ventures with domestic firms (as in mobile phones and computers) and expand local content (as in autos). Cities and provinces were given substantial freedoms to fashion their own policies of stimulation and support, which led to the creation of industrial clusters in Shanghai, Shenzhen, Hangzhou, and elsewhere.8 Many of these early policies would have run afoul of WTO rules that ban export subsidies and prohibit discrimination in favor of domestic firms—if China had been a member of the organization. Chinese policy makers were not constrained by any external rules in their conduct of trade and industrial policies and could act freely to promote industrialization. By the time China did join the WTO, in 2001, it had had created a strong industrial base, much of which did not need protection or nurturing. China substantially reduced its tariffs in preparation for WTO membership, bringing them down from the high levels of the early 1990s (averaging around 40 percent) to single digits in 2001. Many other industrial policies were also phased out. However, China was not yet ready to let the push and pull of global markets determine the fate of its industries. It began to rely increasingly on a competitive exchange rate to effectively subsidize these industries. By intervening in currency markets and keeping short-term capital flows out, the government prevented its currency (renminbi) from appreciating, which would have been the natural consequence of China’s rapid economic growth. Explicit industrial policies gave way to an implicit industrial policy conducted by way of currency policy. Asia’s economic experience violates stereotypes and yet offers something for everyone. In effect, it acts as a reflecting pool for the biases of the observer. If you think unleashing markets is the best way to foster economic development, you will find plenty of evidence for that. If you think markets need the firm, commanding hand of the government, well, there is much evidence for that too.
Chinese leadership
Julian Gewitz contends that protectionism in the US and Europe will boost Chinese global leadership. Negative debaters can argue Chinese economic leadership is good, Affirmative debaters can argue it is bad.
Julian B. Gewirtz is the author ofUnlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China, out in January,December 12, 2016, Time, Is China the new Champion of global openness? https://time.com/4602533/china-openness/
According to recent reports, China’s president, Xi Jinping, will appear at next month’s meeting of the World Economic Forum in Davos, Switzerland—the first time that a Chinese president has attended the luxurious conclave. The annual gathering of the global elite, badly battered by the populist surge of 2016, will open on Jan. 17, 2017, just days before Donald J. Trump is inaugurated the 45th president of the United States. In deciding to attend, Xi is making a play for influence in a world roiled by the victory of Trump. The President-elect has promised to withdraw from the Trans-Pacific Partnership and other free trade agreements and recently sounded remarkably eager to use tariffs and market access controls to punish rival countries like China. Although what he will actually do in office remains unclear, leaders around the world have voiced profound concern about the future of free trade and economic openness. Xi, who also carries the title of general secretary of the Chinese Communist Party (CCP), has seized the opportunity this presents for China, the world’s second-largest economy, by anointing himself the unlikely champion of economic openness. For example, at a recent summit meeting of the Asia-Pacific Economic Cooperation (APEC) leaders in Peru, Xi declared: “China will not shut the door to the outside world but will open it even wider.” He called for the countries of the Asia-Pacific “to stay committed to taking economic globalization forward,” according to an official Xinhua News Agencyreport. He is likely to return to these themes at Davos. But don’t be misled: What Xi means when he talks about openness and globalization isn’t the liberal understanding of those terms that has underpinned the U.S.-led economic order celebrated at Davos in the past. China’s economic system remains a “socialist market economy.” Xi is offering up a version of openness and globalization that is maximally beneficial to China, as part of creating an alternative economic order in which China can dominate. Let’s call it “openness with Chinese characteristics.” Xi’s seeming embrace of openness and globalization will be immensely seductive to countries around the world that are anxious about their growth prospects and the future of the international economic system in the Trump era. In Asia, China is offering the Regional Comprehensive Economic Partnership (RCEP) and will promise to accelerate negotiations. Once thought to be a China-centric companion to TPP, which excluded China, RCEP now appears to be the main game in town. But it is nonetheless enormously attractive to Asian countries because of the economic benefits it will offer and its hazy standards and requirements. RCEP will tie these countries even more strongly to China, providing Xi with a great geopolitical boon. Beyond Asia, Xi will appeal to countries stunned by Trump’s win. He will likely promise continuing outbound investment from China around the world and reiterate that the U.S. is welcome to join the Asian Infrastructure Investment Bank, a multilateral development bank proposed by China and including U.S. allies like Germany, South Korea, and the U.K. (but not the U.S., which declined to join). He will also dangle promises of greater access to China’s massive domestic market. With the prospect of a protectionist U.S. and a diminished Europe, the political and business leaders gathered at Davos may see little choice but to look to Xi for global leadership.
Conclusions
I think the following conclusions are accurate: