Quiddity is Job One

Yesterday, I took issue with the Wall Street Journal’s Mary Anastasia O’Grady, whose sunny defense of globalization on the paper’s op-ed page left me perturbed, not so much as to her ultimate position, but how she got there. I don’t see the utility of using statistical data to support broad claims that are patently untrue, or only partly true, offered up without qualification or considering substantive objections. As regards her editorial, the offending notion was that free trade and globalization is making the world richer, but how thick (or disingenuous) must one be not to admit that globalization has its winners and losers. Ms. O’Grady prefers to interpret rises in GDPs around the globe as evidence of her position, but it does not take a highly numerate person to realize that GDPs don’t necessarily reflect what goes on inside a national economy, how wealth is created and distributed. A country can post impressive GDP gains and still not move many people out of poverty, because those gains are consolidated at the wealthy end of the spectrum.

A perfect example of this in the real world can be seen in examining China. The wealthiest classes in China are quickly catching up in number and sheer wealth to the first world, having ridden a huge wave of wealth creation over the past 15 years, but its peasant class—which contains around 1 billion people—is no better off in many cases than they were under the command economy. If China can maintain the same rate of economic growth for a generation, it is a good bet that many peasants will transition into the middle class, at least, those who have moved out of the countryside and into the cities, but should China’s economy stumble before that process has taken place, there will be a giant class of people for whom trade and globalization have done nothing.

Likewise, in the first world, where abject poverty is less an issue, there is still a great deal of pain and resentment over pretty much the same dynamic. How does it benefit supporters of globalization—which I am one—to rig the numbers and conceal the weaknesses of their position?

Journalists with a less blinkered point of view have at least contemplated and reported on the challenge of economic inequality. Last week, for example, The Economist summed up the challenge rather tidily:

Since 2001 the pay of the typical worker in the United States has been stuck, with real wages growing less than half as fast as productivity. By contrast, the executive types gathering for the World Economic Forum in Davos in Switzerland next week have enjoyed a Beckhamesque bonanza. If you look back 20 years, the total pay of the typical top American manager has increased from roughly 40 times the average—the level for four decades—to 110 times the average now.

This is the dilemma. Globalization has created an incredible surge in wealth, but because that wealth has pooled up in certain social classes and economic sectors, it has also created a great deal of resentment among the losers.

The Economist, vigorous defender of economic liberty that it is, then hauls out its standard prescription for mitigating the downside of globalization, stating:

Instead, the way to ease globalisation is the same as the way to ease other sorts of economic change, including the impact of technology. The aim is to help people to move jobs as comparative advantage shifts rapidly from one activity to the next. That means less friction in labour markets and a regulatory system that helps investment. It means an education system that equips people with general skills that make them mobile. It means detaching health care and pensions from employment, so that every time you move your job, you are not risking an awful lot else besides. And for those who lose their jobs—from whatever cause—it means beefing up assistance: generous training and active policies to help them find work.

This has been the centrist position in both the UK and US for at least a decade, serving as the touchstone of both the Clinton administration and Tony Blair’s stay at 10 Downing Street. There is nothing essentially ‘wrong’ with the policies mentioned above, although I would probably be less kind to large corporations that largely escape blame in the standard centrist approach to things.

The threat to globalization in the US and UK is, at present, not very dire, even with the Democrats in charge of Capitol Hill and Blair due to move on any day now; therefore, moderate prescriptions, such as those of The Economist, have the luxury of time to prove their utility. But I would like to point out an oft-overlooked irony that rests at the heart of the globalization debate, one that concerns not so much corporate behavior, but the behavior of individuals. Is anyone, besides myself, struck by the fact that it is precisely those folks who are harmed most by globalization who also aid it immeasurably through the choices they make as consumers? The Economist kicked off the aforementioned article by alluding to one such set of victims, writing:

Gluers and sawyers from the furniture factories in Galax near the mountains of Virginia lost their jobs last year when American retailers decided they could find a better supplier in China.

This is a lamentable outcome, but it would be interesting to know how many of those gluers and sawyers shop at Walmart or Target for everything from radial tires to summer dresses to toboggans…all of which are made in China by workers who are paid next to nothing and likely manufactured at a loss by a state-owned factory, subsidized by bad loans from a state-owned bank. Does it not seem strange that the class of people who suffer the most from globalization are some of its biggest enablers? And they do so over trinkets at mere pennies to the dollar.

It is my opinion that this condition described above is part and parcel of a curious paradox concerning consumerism; that is, as ever more stuff can be had at ever cheaper prices, consumers come to appreciate less and less the thing-ness of their things. A fitted shirt or a bedside table is no longer an object to be appreciated for its aesthetic qualities, craftsmanship, and even just as a token of your neighbors’ hard, honest work. It is perceived and appreciated only in its most reductively functional state—as a piece of clothing to cover the body, or a stand on which to set your lamp or glass of water.

I doubt this observation is very original, but I find it very powerful nonetheless, for it changes around the poles of the debate concerning globalization. When viewed in this way, suddenly the victims of globalization become their own worst enemies. But seriously, how, as a sawyer or gluer, can you expect your neighbors to pay marginally more for your furniture, if you yourself are unwilling to pay marginally more for their clothes, clocks, food, hardware, baseball bats, pottery, so on and so forth?

Clearly, the seduction of cheap, serviceable products is winning out over what should be our better instincts, that it is indeed better to buy from the guy across the street than the guy around the world. After all, it is so easy to forget where all the cheap shit comes from when shopping at Walmart, staffed as they are with folksy retirees and bedecked in red, white, and blue streamers. It’s just a big flea market, and what’s more American than that?

One might think here that I am merely reprising the old “Buy American” campaign, but I don’t believe that’s the case, for I have no hostility toward foreign competition and stridently oppose blocking foreigners’ access to the US market. I’m merely suggesting that when gluers and sawyers lose their jobs because of cheap products made overseas, there is plenty of blame to go around, and from one perspective, it starts with the purchasing habits of the very people who lost their jobs.