"Reaping the Great Benefits of Globalization"

January 29, 2007

If we take a look at the last half-century, it is clear that there has been no greater force for positive economic and political change than globalization. Greater integration of the world's economies has lifted hundreds of millions of people out of poverty in the developing world. Nearly doubled the middle class in Mexico. Expanded our economy into a $13 trillion global leader for greater economic and political freedom. The benefits of globalization can be seen every time a Chinese blogger gets past government censors. Or a U.S. company trains factory owners in Thailand in worker rights and protections.

So how did the greatest engine of global prosperity become so maligned? How did this poverty-fighting, democracy-enhancing force get blamed for all the world's evils B from job losses in Michigan to poor water quality in Guatemala? In part, this can be explained by the fact that globalization has improved so many aspects of our lives in such subtle ways. As a result, we don't always recognize its benefits.

When you go to the grocery store and find fresh grapes in the dead of winter, you might not know they came from Chile. You just know that you get to enjoy winter grapes. When you buy educational software for your 2nd grader, you might not know that it was developed by a small business in Pennsylvania, assembled in Malaysia and serviced by a technical support firm in India. You just know that your daughter is starting to read better.

When you buy a new TV because Walmart finally had it at a price you could afford, you might not know that they cut costs by developing and implementing a revolutionary operational structure. That they source, ship and track goods to and from every corner of the globe by using such innovative practices that they've transformed the entire retail industry. You just know that you get to watch the big game with amazing picture. Globalization has impacted us in countless ways, with improvements that range from a better MP3 player to a better job. And together, they contribute to a better life.

But while the improvements to our standard of living often go unnoticed, the challenges that come with change are painfully clear. When a factory closes down, the hardship is very real and very visible. For the individuals who face these tough times, winter grapes and flat-screen TVs seem meaningless. And when confronted with the difficult challenges change can bring, it's very natural to condemn change itself.

But like all hard things in life, it's just not that simple. While one company suffers from competition with China, several others thrive by utilizing low-cost, high-quality Chinese goods. A tech company contracts with a call center in India, and as a result of the cost savings, can afford to hire new programmers. In fact, the numbers overwhelmingly show that globalization has been an enormous net positive for job creation: Over 20 million new jobs since the implementation of NAFTA, including 7 million jobs in the last three and a half years. Unemployment has dropped to 4.5%, a near-historic low.

But while the benefits have been dispersed to all Americans, there's no denying that there are those who have faced great challenges. So do we try to halt the march of globalization? Let's set aside the question of whether we should deny the tremendous benefits for all in order to try to protect the few. Let's ask the question of can we?

Can we protect an industry from losing jobs? If so, do we protect textile workers, or the workers who design, market and sell apparel? Do we protect manufacturers that make steel products, or the manufacturers that use steel products? Maybe we should all "Buy American." Does that mean we by Fords, made in Canada and assembled with Mexican parts? Or do we buy Toyotas, made in Kentucky with American and Japanese parts? Do we buy iPods, designed in California, but assembled in China? The fact is, globalization has made old ideas about protectionism obsolete. Its impact is wide, pervasive and irreversible. We simply do not have the option anymore of withdrawing from the world and denying ourselves the benefits of a global marketplace.

Our only option is to use the prosperity it has brought to help those who are struggling. It doesn't matter why a job is lost. Whether globalization played a part or not, what matters is that workers have the skills they need to find even better jobs than the ones that were lost. If we make a commitment to American competitiveness, including worker competitiveness, we can both enjoy the benefits and address the challenges of a global economy.

What we can't do is demonize the source of our unparalleled prosperity. There's no question individuals will face hardship at times, and that naturally breeds anxiety. But anti-globalization rhetoric that exploits and preys upon the anxieties of working families is cheap, dirty politics. And it is dangerous. It risks the growing standard of living that the world's economic liberalizers are enjoying. I call on my colleagues on both sides of the aisle to reject the politics of isolationism and continue to pursue the path of greater economic integration in the worldwide marketplace.