What are the benefits and costs of globalization?
Question: Further to my previous question, I am also interested to know your opinion on globalization, trade liberalization and deregulation. Answer: There is no question that globalization, trade liberalization, and deregulation tend to increase the total production and wealth of the countries that participate. That’s a good thing. Like all good things, however, it comes at a cost. In the global marketplace, labor is more plentiful than capital, and unskilled labor is more plentiful than skilled labor. Therefore, globalization tends to shift income from wage earners to investors, and from unskilled workers to skilled workers. That doesn’t mean it’s bad: if globalization gives an unskilled worker in a poor country a chance to earn five cents a day, and the alternative is to starve, that’s still an improvement. But over the short term, globalization leads to increased inequality of wealth, even though the cartoon version of the process (“the rich get richer and the poor get poorer”) doe
