conditions. The American companies are at the top of the scale. Certainly the wages and working conditions are not what one would find in Milwaukee or Dallas, but they are nevertheless high by local standards. Mahbubani writes that $5,000 a year may be a scandalously low wage in America, but it is a small fortune to someone in Jakarta, Manila, or Kolkata. The people who take those jobs used to make $500 a year or less working in rural agriculture. 7 No wonder that there are long lines and long lists of applications when companies like Nike advertise openings. If globalization were a form of exploitation, one would expect there to be strong anti-globalization sentiment in developing countries. In fact, there is no significant anti-globalization movement in countries like China and India. That’s because the Chinese and the Indians know much better than American progressives what’s good for them.
Because globalization is good for workers in poor countries, it helps to reduce immigration from poor countries to rich countries. Largely as a consequence of globalization and free trade, Mexico is more prosperous today than it was a couple of decades ago. Consequently Mexicans have more opportunities in their own country, andthey are less likely to hazard the difficulties of illegally crossing into the United States. India, too, offers vastly better chances to young people than it did when I left in the 1970s. Many Indians of my generation were “pushed out” because of the lack of economic opportunity at home. There is no longer that same pressure to leave now; in fact, some developing nations now provide incentives for their talented runaways to come back.
In a way that is not often recognized, globalization is also a force for peace among nations. The simple logic of this was noted centuries ago by figures like Adam Smith, David Hume, and Montesquieu. They knew that countries that trade with each other become mutually dependent. Thus they are less likely to fight. This is clearly true of America and China today. We get along with China vastly better than we used to get along with the Soviet Union. One reason, clearly, is that we routinely do business with China. We need them for the stuff we live by, and they need us to buy their stuff. Global trade doesn’t just change the calculus of conflict; it also creates a new type of culture among people. As a result of the prosperity produced by globalization, for instance, many Indians spend less time grousing about Pakistan and more about their new business ventures. Across the world, globalization has people more interested in improving their lot through their own industry than through national conquest.
Like everything else, globalization has costs as well as benefits. Progressives are on stronger ground in claiming that globalization disadvantages some workers in America and the West. This is undeniable; the question is whether it constitutes exploitation. Consider a young person who has been raised in a steel town like Pittsburgh or an auto city like Detroit. For more than a generation, those places provided steady employment at a decent wage. Pittsburgh and Detroit were two of the most prosperous cities in America, gleaming illustrations of the American dream. And undoubtedly there werefathers who told their sons and daughters that if they worked hard and played by the rules, in the manner their parents did, they too would have a stable and prosperous future. Yet today Pittsburgh is no longer the steel capital of the world, and Detroit has lost its dominance in the global auto industry. What can we say to the young man or woman who is trained in steel work or auto work but no longer has a good job available to him or her? Has America failed these people? Has globalization stolen their American dream?
It is a fact that today steel can be made more cheaply outside America. This is also true of many other products: shoes, shirts, toys, and so on. Cars are
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