Globaphobia: Confronting Fears about Open Trade

Globaphobia: Confronting Fears about Open Trade

Globaphobia: Confronting Fears about Open Trade

Globaphobia: Confronting Fears about Open Trade

Synopsis

For much of the post-World War II period, the increasing globalization of the U.S. economy was welcomed by policymakers and by the American people. We gained the benefits of cheaper and, in some cases, better foreign-made products, while U.S. firms gained wider access to foreign markets. The increasing economic interlinkages with the rest of the world helped promote capitalism and democracy around the globe. Indeed, we helped "win" the Cold War by trading and investing with the rest of the world, in the process demonstrating to all concerned the virtues of trade and markets. In recent years, however, a growing chorus of complaints has been lodged against globalization--which is blamed for costing American workers their jobs and lowering their wages. The authors of this book speak directly and simply to these concerns, demonstrating with easy prose and illustrations why the "globaphobes" are wrong. Globalization has not cost the United States jobs. Nor has it played any more than a small part in the disappointing trends in wages of many American workers. The challenge for all Americans is to embrace globalization and all of the benefits it brings, while adopting targeted policies to ease the very real pain of those few Americans whom globalization may harm. Globaphobia outlines a novel, yet sensible program for advancing this objective. Copublished with the Twentieth Century Fund and the Progressive Policy Institute

Excerpt

It is one of the paradoxes of our modern age. America has been leading the world to encourage more integration of national economies. Yet just as we appear to be succeeding, increasing numbers of Americans appear to be expressing growing doubts or worries about this process of "globalization."

Several factors seem to be responsible for this unusual coincidence of developments. Although the American economy has experienced one of its longest peacetime expansions in the 1990s, many Americans have been left behind, with their real incomes not much improved, or even lower than what they were earning a decade ago. In addition, the turbulence in labor and financial markets has generated uncertainty for many of those who otherwise have fared quite well. In this environment, globalization becomes an easy scapegoat for unwelcome economic news.

The four authors of this important book seek to demonstrate the fallacies that underpin this "globaphobia." They do so in clear prose, with numerous illustrations, and in the process, bring to life some of the abstract concepts that are familiar to economists, but not to many members of the public. In their view, buttressed by much economic evidence, globalization continues to benefit, rather than harm, the American economy. To be sure, there are losers--a fact that some . . .

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