Asking the hard questions about globalization

Barbara O'Brien of Mahablog on globalization:

So maybe I'm an economic imbecile but I can't see how "opportunities" are being created for American workers when appliances are built in Mexico and sold in India. And whenever I have asked this of righties, I'm told a little pain is the price of progress — once upon a time horse-drawn carriage manufacturers went out of business, too.

Yes, but as I understand it people stopped buying horse-drawn carriages because they were buying automobiles instead — automobiles mostly manufactured in Detroit. So automobile manufacturing replaced carriage manufacturing; when one door closed, another was already open. Electric lights replaced candles. Home computers replaced typewriters. One kind of manufacturing was shoved aside as another took its place. Yes this was stressful on individuals who lost jobs, but technological innovations do create many new opportunities.

But outsourcing is different. What new opportunities will be created for workers by outsourcing manufacturing overseas? Please spell it out for me. I can't see it. Yes, American-owned businesses might make more money, but there's no law that says that money will be used to create more jobs for American workers. It's more likely to create more jobs for Mexican workers. How can American labor compete other than by pricing itself down?

And this from Robert Kuttner in the Boston Globe:

As Americans, for instance, we have benefited from a social compact of protections enacted by our democratically elected representatives — minimum wage laws, safety and health laws, social insurance, consumer safeguards, the right of workers to unionize, and so on. When we trade with nations that have no such protections, we run the risk of importing the absence of a social compact along with the products. That doesn't mean we should seal up our borders, but it does mean we should look harder at the terms of engagement.

Shouldn't we insist on certain social minimums in nations that want to trade freely with us? Should we allow the exploitation of foreign labor to lead to the battering down of wages and standards at home?