Extreme globalization must be fought tooth and nail
By MARTIN HUTCHINSON, an economic historian
Twenty years ago, I was strongly in favor of globalization. I recognized the theoretical benefits it could bring and believed that poor countries could get richer while rich countries and their inhabitants did not get poorer. Alas, I favored a globalization that we did not get, and that maybe does not exist. Politics, as always, messes up the process; once you take account of politics, it becomes clear that extreme globalization must be fought tooth and nail.
According to David Ricardo’s Doctrine of Comparative Advantage, propounded in 1817, if two nations each produce the goods and services for which they have the greatest advantage, world wealth will be maximized. In the world of 1817, that Doctrine held very largely true, and the move to free trade that it inspired, to the extent that movement was shared among the world’s leading economies (which it increasingly wasn’t) was responsible for a massive improvement in human welfare.
When the Soviet Union imploded and, almost simultaneously, the Internet and cellphones appeared, it seemed that Ricardo’s Doctrine was once again going to lead to an almost unimaginable improvement in human welfare, this time with the world’s poorest countries sharing in the increased wealth that in the 19th Century was almost entirely confined to western Europe and the United States. World War I had clearly derailed the steady improvement in life standards of the 19th century. The imprisonment of a large part of the human population in the economic dead-end of Communism after that war and the second war that followed had greatly reduced the Ricardian potential that might have been available from a truly free world. Now it appeared that the old barriers had finally broken down, even in India and China, home to nearly 40% of the world’s population, so the economic lift-off ought to be spectacular.
The advent of modern telecommunications should have done even more for global growth. Suddenly, it became relatively easy to outsource globally, controlling a supply chain from the rich countries where the markets were, while carrying out the actual manufacturing in poor countries with wage levels one tenth those of the rich ones. Combined with the extension of the market to an additional 40% of the world’s population, this should have produced global growth rates at an unprecedented level, with the relatively high research expenditures and rapid diffusion of knowledge characteristic of modern economies also serving to turbo-charge global growth and increases in wealth.
Admittedly, you would also expect an equalization of living standards between rich countries and poor countries by the new globalization, as poor countries were fully integrated into the world economy. However, in a truly free market, Say’s Law should have ensured that nobody got poorer. The additional supply potential of the poor countries, and their higher purchasing power, should produce its own demand. In a truly free market, the opening of the Chinese and Indian economies should have led to a bonanza for Western producers, who should have been able to double their output while reducing costs, in a free market a guaranteed recipe for success. That doubled output should have provided additional job opportunities in Wisconsin as well as in Wuhan.
In practice, a Ricardian episode of faster growth through globalization is not what we got. Global GDP per capita, the growth of which should have accelerated after 1990, as full globalization and the Internet/telecom revolution took hold, has in fact slowed. Whereas in the 30-year period 1960-90, growth averaged 1.25% per annum, on World Bank figures, in the 28-year period 1990 to 2018 it has averaged only 1.15% per annum. Given the changes of the 1990s, you would have expected global growth to accelerate to an annual 1.75%-2%, reflecting the exceptionally attractive new growth environment. Thus, the growth shortfall is much more serious than it at first appears – the world is at least 20-25% poorer today than it should be.
Some of the explanations for this are relatively benign. Ricardo’s doctrine does not work well in knowledge-intensive service sectors, because relative advantages can be shifted. A good example of this was given to me by a software CEO, who in 2002 explained that his outsourcing was benign, because the Indian-domiciled graduates of the Indian Institute of Technology had the ability to be coders, but did not have the higher-level abilities and experience to be software managers. That has proved to be rubbish in the intervening years; the Indians to whom he had outsourced, being intelligent people, learned the higher-level skills that he intended to keep in the United States and have now taken over the projects entirely, greatly restricting his business. That did not happen in the textile industry of 1817; life has moved on, and Ricardo is no longer so applicable.
On the other hand, the adverse relative effect we would have expected to see on the living standards of the less skilled in rich countries has been only too visible. Those living standards before 1990 had been increasing steadily, albeit with a relative transfer of wealth from the United States to Europe and Japan in in 1973-90. However, since 1990 living standards for the average and lower-skilled in rich countries have declined, in the United States, Western Europe and Japan. You would expect this; globalization’s wealth transfer to poor countries has indeed occurred, as exemplified by the huge rise in Chinese wealth, but instead of being Pareto-optimal, helping all participants in the world economy, globalization, because it has not produced faster growth, has produced a massive wealth transfer away from Western citizens, whose welfare Western politicians are paid substantial salaries to protect.
Beyond the simple failure of Ricardo in certain areas (and they still add to only a modest percentage of the total economy) there are several reasons, generally less benign, why globalization has drastically underperformed:
Intellectual property theft. To the extent that China, in particular steals Western intellectual property, the speed of economic growth is unaffected in the short-term, because China’s wealth increases at the expense of the West. Of course, if Western companies go out of business or cut back their innovation as a result of their IP being stolen, global growth will suffer in the long-term. There is considerable evidence that this effect is occurring and has grown more significant since 2010.
Regional Free Trade Agreements. Until 1994, free trade was primarily a global movement, with the exception of the EU’s move to a Single Market. Since that date, innumerable regional free trade agreements have sprung up. These have generally increased tariffs, because the regional blocs increase barriers against competitors who are not members. In general, they distort the flow of goods and services, reducing the benefits of globalization. At the same time, if low-wage countries are involved, they may involve just as much “outsourcing” and impoverishment of rich-country workers as full globalization. Generally, they are a thoroughly bad idea.
Environmental policies. To the extent that governments pursue “green” policies they impoverish all their citizens except a few well-connected environmentalists. This problem is exacerbated if environmental policies are imposed by multi-lateral treaties, where ordinary voters cannot get rid of them through the ballot box. The “climate change” scam has been responsible for much of the growth shortfall of the last decade and is only going to get worse unless it is fought tooth and nail.
Short-termist corporate management. Partly because of “funny money” (see below) but also because of excessive grants of stock options, corporate management has become obsessed by short-term gains. In a globalizing world, this has meant an excessive regard for the wage and other cost savings from relocating production to the Third World, and an insufficient attention to the long-term costs and above all risks that outsourcing produces. With Covid-19 and the increasing geopolitical hostility of China, those costs have now become all too clear. Global supply chains must be shortened, and production brought back to Western economies, benefiting Western workers.
“Funny money” With all major advanced economies running a lunatic monetary policy that sets interest rates far below their natural levels, all kinds of economic insanities have been encouraged. In particular, the owners of assets have been excessively benefited at the expense of the earners of wages and salaries. Small business formation has also been decimated. “Funny money” also compresses the capital cost differential between Western and emerging market economies, artificially encouraging low-wage competition and outsourcing. Finally and most important, “funny money” has killed productivity growth and therefore wage growth in every country where it has been imposed. The policy needs to be reversed as soon as possible.
Supranational governance. Globalization has brought an increasing governance by supranational public-sector bodies, who are subject to absolutely no democratic control and impose the barmiest theories of leftist academics on the struggling global economy.
Even the World Trade Organization, in principle a sensible and necessary organization, has in practice been subjected to a series of leftist Third World bureaucrats who have no understanding of free-market trade dynamics. It is now obvious, if it was not before, that a unified world government would be an Orwellian nightmare, where all the worst fantasies of the leftist professoriate were given full rein, and ordinary people had no say at all. It would combine 1984 and Brave New World, being simultaneously impoverishing and socially controlling. Even more than environmentalism and “funny money” it must be resisted a l’outrance.
The “populist” uprisings in the U.S., Britain and many other Western countries are a natural reaction to globalization’s failings. Whatever the intellectual incoherence and bad manners of populism, the uprisings should be encouraged, albeit accompanied with a non-populist reversion to sound monetary policies. Only thereby will we regain control of our societies and get the growth in prosperity we all deserve.
https://www.tbwns.com/2020/10/12/the-bears-lair-the-emerging-global-one-party-state/
Woke warriors outraged over Gal Gadot being cast as Cleopatra because she is not black are ridiculed for not knowing the Egyptian Queen was GREEKIsraeli actress Gal Gadot has been slammed on social media after she was cast to play Cleopatra in the upcoming historical epic about the iconic Egyptian queen.
The 35-year-old on Sunday confirmed she will play the titular role in a new movie after Paramount Pictures won the rights to the film in a bidding war between Universal, Warner Bros., Apple and Netflix.
The casting however, immediately drew outrage from confused social media users who wrongly assumed Cleopatra was black and North African.
Critics argued it was inappropriate for Gadot, a white Israeli woman, to play such a role and suggested the part be given to an African or black actress instead.
The outrage was met with ridicule by other social media users who were quick to point out the Egyptian ruler was actually ethnically Greek or Persian.
'Cleopatra was NOT black, she was of Greek descent, and there are even effigies of the time on how she looked like. People need to stop trying to rewrite history with the SJW stupidity of today,' one user tweeted.
'People are upset because Gal Gadot, who isn't black, is playing Cleopatra, who wasn't black either,' Journalist Ian Miles Cheong quipped.
Cleopatra is known as the last ruler of the Ptolemaic Kingdom in ancient Egypt before her death in 30 BC.
While she was born in Egypt, she was the daughter of Pharaoh Ptolemy XII, a member of the Macedonian Greek royal family that ruled Egypt for 275 years, meaning Cleopatra was most likely fair-skinned
In books and paintings, she was often depicted to have ivory skin, which was also seen in depictions Roman and Ptolemaic goddesses at the time.
The real life Cleopatra ruled Egypt for three decades, first with her father, then with her two younger brothers and finally with her son, reputed to have been fathered by Julius Caesar.
UK: War on woke: ministers to get powers to protect controversial statues
Boris Johnson is to give a minister the power to veto the removal of statues, plaques, and memorials across the country, to help guard against campaigners and politicians "bullying" local officials into wiping out public heritage.
The Government is preparing to change planning rules to allow Robert Jenrick, the Housing Secretary, to take over formal applications relating to the dismantling of statues and other monuments, rather than the final decision resting with councils.
The move would amount to the Government's first legal intervention relating to recent cultural clashes that have led to museums, councils and universities facing pressure to remove statues, plaques and other objects linked to the country's colonial past.
Tower Hamlets, a Labour council in east London, is one of the latest local authorities to consider relocating or removing statues in the borough, according to a dossier compiled by the Policy Exchange think tank. Lambeth, another Labour council in the capital, is also intending to "review existing troubling or historic links and assess whether we can legally suggest new names or commemorations".
The government plan comes after Oliver Dowden, the Culture Secretary, separately wrote to publicly-funded museums and galleries warning that they could jeopardise their taxpayer support by removing statues or other artefacts as a result of pressure from campaigners.
Under planning laws, the Housing Secretary can generally take over, or "call in", planning applications if the proposal conflicts with national policy in a major way, or is nationally significant. However, the minister is bound by a set of specific criteria for the type of application that can be called in.
The Telegraph understands that the Government is planning to amend the current criteria to include planning applications for the removal of public heritage such as statues, plaques and memorials.
If Mr Jenrick took over such cases, an inspector would carry out an inquiry, which the minister would then have to take into account before reaching a decision.
A senior government source said: “The Labour Party has given the green light to cultural and historical vandalism across the country. Statues of Britain’s heroes from Sir Francis Drake to Admiral Nelson are under threat from Marxist militants, working hand in glove with Labour councillors."
The source said the plans would allow the Government to "protect Britain’s heritage, and ensure all planning decisions are made with due process and due consideration of historic heritage guidance”.
Last night, Trevor Phillips, the chairman of Policy Exchange’s History Matters Project, said: “In recent months, Policy Exchange has documented more than 100 cases where aspects of our shared past – from statues to street names and what is taught in schools and universities – are being erased, without genuine debate and with very little consultation with the public who pay the bills.
"For example, it was shocking to see a statue in Bristol be torn down against the will of the only black mayor of a large British city.
"We should recognise changes in public sentiment, but our response in a democracy must not be driven just by those who shout loudest. It is very welcome news that ministers will be able to ensure that if change takes place it will be by public consent rather than by extremist coercion.”
Ministers are understood to be concerned that councils could fail to follow due process before removing statues and other monuments.
On Tuesday, Sir Laurie Magnus, the chairman of the Historic England quango, warned MPs: “Our collective past is going to be just torn away, slowly, piece-by-piece.”
Criticising Labour's approach to the campaigns to remove controversial statues, Mr Johnson told Tory members last week: “We are proud of this country’s culture and history and traditions; they literally want to pull statues down, to rewrite the history of our country, to edit our national CV to make it look more politically correct.”
SOURCE
If you dare to tell it like it is, you’re a racist
Mike O’Connor writes from Australia:
If you want to express an opinion that is in anyway contrary to what is seen as politically correct in this great land of ours, don’t expect anyone to stand up for your right to freedom of speech.
Kerri-Anne Kennerley is the latest person to incur the wrath of the self-righteous following her acceptance of an offer to play the role of Pippin in the upcoming Gordon Frost Organisation’s musical of that name due to open in Sydney next month.
Her decision was immediately denounced by prominent theatre director Richard Carroll who said that the decision to cast Kennerley demonstrated that the musical theatre industry was not willing to change.
Pardon? Well-known performer lands acting gig? Where’s the problem and what hasn’t changed?
Kennerley’s sin was to air the view on television last year that people protesting to have the date of Australia Day changed were ignoring the alleged rape of children and women in the Outback.
“Has any single one of those 5000 people waving the flags saying how inappropriate the day is, has any one of them been out to the Outback where children, where babies and five-year-olds are being raped, their mothers are being raped, their sisters are being raped. They get no education” she said.
“What have you done?” she asked of the Invasion Day protesters. “Zippo!”
Predictably she was howled down for stating an obvious truth, the announcement of her role in Pippin firing up social media harpies who immediately cried “racist!” and demanded she be removed from the show.
It seems that for voicing her views, she should now be ineligible for future employment. How dare she expose the shallowness of urban activists who rant and chant and tell each other what a great job they’re doing and through indolence, ignorance or self-absorption, do nothing about the real problems in society.
Kennerley, bless her, is not one to fold in the face of criticism. “It matters not,” she said. “I am delighted to be doing Pippin. it’s wonderful to have jobs back for the theatre industry.”
I don’t place much credence in Australia Day awards, given that they are frequently handed out to people who have merely done what they have been well paid to do but if the gong givers want to give one to Kennerley next year for having the courage to speak her mind, that’s fine with me.
The outrage, however, has not been confined to Kennerley.
Performer Gabrielle McClinton has also been given a role in Pippin, having previously appeared in the Broadway production of the same musical.
The catch here is that not only is McClinton an American but he is also black.
“This is an opportunity for the Gordon Frost Organisation to formally acknowledge the lack of inclusion in our industry and adopt cultural competency in their productions,” said the actors’ union.
“It is important GFO recognises that moving forward there needs to be a formal agreement to ensure transparency and inclusion.”
Cultural competency? What precisely is that? Sounds like racism to me, denying Mr McClinton the role because he is a black American and not an Indigenous Australian.
This is another way of saying that theatrical producers should not be free to give the job to the person they feel to be best qualified but to a local whom they believe to be less qualified.
It’s their money they are risking. Surely they should be able to decide who they hire without being accused of lacking “cultural competency.”
The Gordon Frost Organisation has said that it looked for an Australian person of colour to fill the role but it couldn’t find anyone could with the requisite level of singing, dancing and acrobatic skills.
Giving jobs to people who are not qualified to perform them doesn’t do anyone any favours.
Moves gaining traction to force companies to have gender equality on their boards, now being made mandatory in California, are equally flawed.
Once you throw merit aside, the whole system becomes debased. The only winners are the underqualified.
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My other blogs:
http://dissectleft.blogspot.com (DISSECTING LEFTISM)
http://snorphty.blogspot.com TONGUE-TIED)
http://edwatch.blogspot.com (EDUCATION WATCH)
http://antigreen.blogspot.com (GREENIE WATCH)
http://john-ray.blogspot.com (FOOD & HEALTH SKEPTIC)
http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)
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Kristina Pimenova, once said to be the most beautiful girl in the world. Note blue eyes and blonde hair
Bliss: What every woman wants: to feel safe and secure in the arms of her man. Robert Irwin and Rorie Buckey. See 
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