The last 40+ years of globalization have raised more people out of poverty than at any other time in history, and spread progress and prosperity around the world. Check your envy and hatred, friend.
For example, Hong Kong and Singapore were extremely economically liberal. They still are, to some extent (some of the lowest tax rates in the world; Singapore even has no capital gains tax, and its top tax rate is 20%). According to Google, Singapore has a per capita GDP of $52,960.71 (the US is $57,466.79), a rich country by international standards. Hong Kong has a GDP per capita of $43,681.14.
Taiwan and Korea were/are less economically liberal than Hong Kong and Singapore, but still have relatively low tax rates by international standards. Korea has a GDP per capita of $27,538.81, and Taiwan of $31,900.00.
China was slow to open up economically, waiting until the 1970s, and even since then its policies are less liberal than the aforementioned countries (see e.g. https://en.wikipedia.org/wiki/Ease_of_doing_business_index). China now has a GDP per capita of $8,123.18.
North Korea is even less liberal than China, almost completely rejecting international trade. It has a GDP per capita of $583.00.
While this is not a large sample size, it's better than nothing, and does seem to indicate a correlation between economic liberalisation and economic growth.
The longer term impact for global development is explored by Dani Rodrik
"""This means countries are running out of industrialization opportunities sooner and at much lower levels of income compared to the experience of early industrializers"""
https://www.sss.ias.edu/files/papers/econpaper107.pdf
Does it bother you at all that you took a simple set of numbers, largely devoid of context, and then waved your hands with some math and made a huge conclusion? No relevance to the subject of the original post we are discussing here?
I think its a direct example of Premature Mathiness but I suspect you'll disagree :)
>"""This means countries are running out of industrialization opportunities sooner and at much lower levels of income compared to the experience of early industrializers"""
>https://www.sss.ias.edu/files/papers/econpaper107.pdf
>Does it bother you at all that you took a simple set of numbers, largely devoid of context, and then waved your hands with some math and made a huge conclusion? No relevance to the subject of the original post we are discussing here?
How was what I posted not relevant? The person I was replaying to asserted that there was no basis to make comparisons between the effects of different degrees of liberalism, I presented an example refuting that. If anything the link you posted seemed less relevant: how does a reduction in industralisation opportunities relate to the ability to make comparisons between different economic systems?
"Relevance" wasn't the metric. The metric was you very directly seeing numbers at hand and then using the math tool you had and coming to a broad, simplistic and wrong answer about whether "liberalization" is the way forward in 2017.
Many many mainstream economists are increasingly disagreeing with your simplistic and ideological model.
>"Relevance" wasn't the metric. The metric was you very directly seeing numbers at hand and then using the math tool you had and coming to a broad, simplistic and wrong answer about whether "liberalization" is the way forward in 2017.
Then if liberalisation is not the way forward, how will countries in Africa and South America be better served by denying opportunities to them and the people in them?
I'd seriously question this. There's a ton of stuff which they have both done which would be met with horror by "economically liberal" types if it were tried in the west.
For example, in Singapore 90% of the housing market is directly controlled by the government and if you look at the medical market, they have some really stringent price controls.
Then there's the currency manipulation: both states, while small, have enormous holdings of treasuries which they buy in order to make their exports more competitive.
I think those "ease of doing business measures" are fluff at best and at worst, basically just outright propaganda on behalf of foreign investors.
"North Korea is even less liberal than China, almost completely rejecting international trade. It has a GDP per capita of $583.00."
Nobody really has a clue what North Korea's numbers are and my level of trust in the CIA's estimates hovers around zero.
Having been there and to Bangladesh I'd have to argue that the latter, while more open to the outside world, is much poorer. Whatever propaganda you are fed, it's fairly obvious from the eye that, for instance, the quality of housing in Bangladesh countryside/2nd tier towns is worse than those in North Korea's 2nd tier towns and countryside.
I'd wager the vast majority of economic liberals would welcome government controls on the housing market and medical market if it meant a top tax rate of 20% (with the average person paying much less), no capital gains tax, and extremely liberal immigration policies. The lesser of two evils, so to speak.
>I think those "ease of doing business measures" are fluff at best and at worst, basically just outright propaganda on behalf of foreign investors.
If you want a more concrete example: in Australia it takes approximately one day and zero dollars to open a business. In China it often takes over 30 days and thousands of dollars in deposit, depending on the kind of business.
>Whatever propaganda you are fed, it's fairly obvious from the eye that, for instance, the quality of housing in Bangladesh countryside/2nd tier towns is worse than those in North Korea's 2nd tier towns and countryside.
I encourage you to watch accounts given by people who managed to escape from North Korea: they give me the impression that starvation is a bigger problem there than even in Bangladesh.
Globalism has allowed multinational corporations to expand their economic and political influence - since they have the economies of scale to expand globally. It's true that more people have been lifted out of poverty, but the fact remains that globalism favors wealthy owners of multinationals over everyone else.
Look at how much influence western oil/tech companies have in countries around the world. Lobbies are stronger in our political realm, it really isn't fair to say that these policies benefited the poor more than the wealthy.
That's not to say that globalism is bad. But we need to be careful because as the wealthy's influence and power grows, it becomes harder to solve the problems that will come with the age of automation.
You're right to point out the risks of vast wealth disparities and the corrupting influence of money in politics, but I think that problem needs to be combatted separately, and not by making everyone less well off.
To break this down further, the masses gain economic value and employment. The wealthy gain political/economic influence to solidify their wealth and position.
I'm not talking about low-balling millionaires. I mean the billionaires and royalty of the world. The people who own industries, not just companies.
To illustrate, imagine they both start with $1000 each. The total wealth pool is hence $2000, and they both have 50% each, perfect equality. Now, let's look 50 years in the future, assuming the previously mentioned interest rates per annum compounding annually. According to http://www.moneychimp.com/calculator/compound_interest_calcu..., Jo will have $2,691.59 and Jane will have $7,106.68. The total wealth pool is $9,798.27. Jo hence now has 27.47%, and Jane has 72.53%. They're both less equal, but they're also both wealthier, and the overall wealth pool has increased.
Now, let's look ahead another 50 years. If no wealth transfer occurs, Jane will have $69,633.20 and Jo will have $19,128.28, with the total wealth pool being $88,761.48. If we equalise wealth, however, such that both have $4,899.13, then in 50 years they'll each have $34,816.57, for a total wealth pool of $69,633.14. This is 78.45% of the total wealth pool that there would be if no wealth transfer took place.
In this sense there is hence a direct tradeoff between growth and financial equality.
The country which has done most to raise its citizens out of poverty (China) did the exact opposite of articles 5, 6, 7, 8 and 9 of the Washington Consensus.
The Latin American countries which applied it as directed in the 1980s, by contrast, subsequently did very poorly on raising people out of poverty.
It's interesting to compare China, GDP per capita of around $8000, with neighbours like Taiwan, Singapore, Hong Kong and Korea, all of which are now developed countries (GDPs per capita of $20000-$50000), and all of which opened up more and sooner than the Chinese mainland.
Western economists, by and large, advocate doing the exact opposite of what they all did.
90s Russia is a good example of where those recommendations were taken to heart. It didn't go well:
http://fair.org/extra/harvards-best-and-brightest-aided-russ...
This claim is a prime example of the cargo cult pseudoscience that's in question here. No causal relationship is established between corporate globalization and it's just assumed as an axiom that "we must be responsible for it!". It totally ignores the factors of technological progress, decolonization and self-rule, as well as the efforts of countless NGO's. It's not just wrong: it's horribly misleading.
In fact, you'd need to slap an extremely inefficient economic system on top of this mind-blowing amount of resources to not enrich the global population at least a little bit. Or you'd have to purposefully design it to work that way.
The Soviet Union had equal access to natural resources as America and Western Europe, yet at the time of its collapse it was much poorer, and many former Soviet Union countries still are. Clearly in the short term at least natural resources aren't all that matters.
And as you said, we're talking short term here. Very short term. On slightly longer terms, it really doesn't look so good. Indeed, it takes an absurd level of denial / techno-optimism / magical thinking (whichever you prefer) to look at paleoclimatology and current climate indicators and think it can go on for much longer without global catastrophy.
At the end, if the best we can say of globalization is "For around 40+ years it was great fun for a lot of people. Well, for the most privileged countries anyway. And then it collapsed, and took a great chunk of the biosphere and the human population with it"... I don't see much to celebrate.
It's a reasonable argument to make when people are advocating moving closer to Soviet Union policies (e.g. restricting trade, stronger government intervention in industry).
>And as you said, we're talking short term here. Very short term. On slightly longer terms, it really doesn't look so good. Indeed, it takes an absurd level of denial / techno-optimism / magical thinking (whichever you prefer) to look at paleoclimatology and current climate indicators and think it can go on for much longer without global catastrophy.
>At the end, if the best we can say of globalization is "For around 40+ years it was great fun for a lot of people. Well, for the most privileged countries anyway. And then it collapsed, and took a great chunk of the biosphere and the human population with it"... I don't see much to celebrate.
Ultimately all life on Earth will die when the sun burns out or otherwise significantly changes its output. The only hope humanity has to outlive this is taking to the stars, and that won't happen without consuming a lot of resources.
If you want to look at it in terms of natural resources, personally I think irrational fear of nuclear power is the biggest problem facing the world. Modern reactors pose almost no risk to the biosphere compared to coal, oil and the like, nor do they contribute to global warming. More people die every year from coal-burning related illness than have ever been killed by nuclear power accidents.
There's 500M to 1 billion years left for complex multi-cellular life on earth, due to increased solar output. That's around 100000x to 200000x longer than human recorded history. So clearly, not an imminent problem any rational human needs to worry about.
Trashing the planet in a few decades for such a far away "problem" is absurd. All it does is significantly shorten the time we have here. We could decide that 500M to 1B years is enough, stay here and enjoy all the time left.
If we really want to escape our fate on earth, well we could simply take our time to slowly develop ways go to space. Assuming that it is possible for humans to reach anything beyond the solar system, which may not be the case. There are practical physical and thermodynamic considerations that may prevent us from ever colonizing much in space, even if we were to try hard. In which case, preserving earth would not just be the best thing to do, it would be the only thing we can do.
> If you want to look at it in terms of natural resources, personally I think irrational fear of nuclear power is the biggest problem facing the world. Modern reactors pose almost no risk to the biosphere compared to coal, oil and the like, nor do they contribute to global warming. More people die every year from coal-burning related illness than have ever been killed by nuclear power accidents.
No disagreement here. Though it only addresses some of the issues we face, nuclear fission is probably the only semi-viable alternative to fossil fuels.
>If we really want to escape our fate on earth, well we could simply take our time to slowly develop ways go to space. Assuming that it is possible for humans to reach anything beyond the solar system, which may not be the case. There are practical physical and thermodynamic considerations that may prevent us from ever colonizing much in space, even if we were to try hard. In which case, preserving earth would not just be the best thing to do, it would be the only thing we can do.
Ultimately it's a moral judgement. The people living now are different in one key way from people who may exist in the future: they exist. At the core of economics is fulfilling peoples' revealed preferences. If peoples' revealed preferences show they prefer greater consumption now at the expense of people who may live in the feature, that's what will be optimised. What weight should the potential wishes of people potentially born in the future have compared to those of people actually existing now? That's ultimately a philosophical questions, outside the range of economics, maths or science. The one thing that economics shows is that the collective preferences of people existing now tend to put a lot more weight on the importance of people existing now than on people who might exist in the future.
The decision to put more weight on the present is mostly made in ignorance and wishful techno-optimism. Many people still think that we're somehow building a cheap-energy no-death space-faring future, or they're not thinking about it at all (though that does not stop them from making children). Going to space to escape the hard reality of life on earth and then never dying is basically the techno-optimist's replacement for the now outdated concept of heaven.
People on HN tend to go for techno-optimism. This is readily apparent when the AI, singularity delusion is treated as a grave and imminent civilizational problem but fossil fuel, energy shortage and climate change are dismissed with "PV will solve all of this. Evil greedy subsidy-loving coal and oil companies are the problem". Our fossil fuel powered civilization would quickly beg for these "evil" companies to resume their activity if they somehow decided to stop providing oil for a week.
Finally, this preference is also made at the expense of most of the wildlife and biodiversity that exists now (or not long ago for a significant chunk of it), which would very much like to continue exisiting too.
Let's be clear here: the dissenting position that you dismiss (in an ad hom manner) as motivated by "envy and hatred" is critical of the unbelievably distored distribution of wealth and political power that has resulted.
We are concerned about the future generations, "friend".
>unbelievably distored distribution of wealth and political power
Distorted by who's standard? There's no way to scientifically assert that a certain distribution of wealth and power is correct; it's just a distribution. To assert that a particular distribution is "wrong" (or synonyms in this case like "distorted") is a value judgement. It's a natural impulse for people to feel bad when other people have more than them, and this feeling is called envy, so it's not unreasonable to attribute a person's dislike of a distribution in which others have more than them as motivated by envy. Especially from the perspective of someone who believes increasing the size of the pie is more important than equalising the distribution, which many economists believe.
> Distored by who's standard?
By the standard of those of us who have a contrary "belief" than your economists.
As for envy, I hold that envy is operational amongst near peers. Peasants don't "envy" the king.
The last 40 years of globalization have done more to reinforce durable economic inequality—often along ethnic lines—in both the more and less developed partners in trade, globally, than any other comparable time period in history; since human misery is largely driven by relative rather than absolute deprivation, this is a fairly significant problem even before considering the ethnic component, and the ethnic aspect has been fuel for significant, mostly intrastate, ethnic violence.
Globalization is above and beyond all else a result of the Internet, and digital communications, dropping latency to practically 0. No economist predicted, understood or indeed currently understands what that would bring, and what it is doing to our world.
At this point in time, the inability of the economics academy to understand, debate or indeed correct, the multiple feedback loops that are operating to concentrate money into the financial sector, is probably the biggest single threat to capitalism that has ever existed.
At the end of the day, it doesn't matter if power is concentrated through the monetary unit, or through the gun - or indeed the latter as a result of the former - the end is wide scale impoverishment.
I didn't downvote you, but the reason people are is probably that this is obviously wrong. Globalization began well before the Internet was commercialized.
cf. printing presses did the same thing and ushered in 100 years+ of economic and social disruption.