Question: What are the challenges of globalization?
Tom Stewart: You know, the … the … the struggles over globalization are . . . This is the story. This is the … Globalization is the economic – and maybe the social – story of our … of our time. I’ve heard Larry Summers say that he thinks that, you know, the Renaissance, the Industrial Revolution and globalization may be events of comparable magnitude that, you know, historians may come back and look at … at this. Time will tell whether he’s right and … or whether the hypothesis is right. I don’t think he said it was a fact. I think he said it was a possibility. And I think he’s absolutely right. It troubles me a lot that the conversation about this has been so much about individual pain and so little about collective opportunity. The … There’s no question … globalization is good for the world. There’s no, you know … the amount of poverty has gone down. Life expectancy’s gone up in India and China and in other places. Africa is now showing economic growth. And granted, some of that growth that it’s showing is because China’s mark … China’s appetite for commodities is … is, you know, gargantuan. But there’s opportunity for everybody. And yes, opportunity for everybody in this kind of growth also means there are some people who are losing their jobs. And some people whose … whose … who will have to find – dare I say – new opportunity. And I … wanna sound “Pollyanna-ish” about it because I’ve lost my job. I know what it’s … I know some of what it’s like, and I can’t imagine anything more difficult than to be a member of, I don’t know, a traditional blue-collar, union family in Michigan that is seeing a way of life disappear and doesn’t quite know your way out of it, and working at Wal-Mart is a step down. I mean this is not . . . this is not easy. So making the transition possible for people is a really important aspect, both of … not only of public policy, but I also think of private policy and of corporate behavior. But understanding in the long run this is not a “zero sum” game … In the long run that this is actually making the world in the long run safer, in the long run a lot more prosperous.
There’s a book – and I’ve forgotten the name of the author – but a professor in the Economics Department at Harvard wrote a book …. published a book a couple of years ago called The Moral Consequences of Economic Growth. Very interesting book that argues that . . . that economic growth actually creates the conditions under which people can be better. That if you are … and be more moral. Without economic growth it’s …, and moral behavior goes down. And you know … And from a global perspective, this is good. And at the same time, if you’re sitting there in Michigan and economic growth is going badly, you may have special problems that you … you’ve gotta deal with. This is a … this is a big important story.
Recorded on: 6/22/07
Discuss
Jacoline Loewen on February 29, 2008, 2:36 PM
Mr Stewart, I am usually a great fan of Adam Smith and the zero sum game principle that when people do well, this is not at a cost to other people's wealth. So when someone gets pie it does not mean that you will get less pie or if China grows in wealth, this means less for North America.
For the first time, I am not so sure… particularly as you mention Africa and the amount of resource contracts that have been signed in the last decade by the ravenous Asian dragons. With oil, we are also seeing that perhaps there is a bottom to the pie dish. Not sure?
I am glad you mentioned the Michigan worker laid off due to the fact his job is being done in China. In my work, over the last year I have seen factories (parts and all) dismantled and sent out of country.
Today, I was with a CEO of a freight company who described his shock at seeing Detroit recently with its boarded up windows and sad property market. This CEO talked about the USA's drop in activity as he has contracts like cement shipping, etc, declining in his business.
I agree that this is the cost of going global and share your worry about those Michigan workers – how will this look thirty years from now?
Jacoline Loewen on February 29, 2008, 7:36 PM
Mr Stewart, I am usually a great fan of Adam Smith and the zero sum game principle that when people do well, this is not at a cost to other people’s wealth. So when someone gets pie it does not mean that you will get less pie or if China grows in wealth, this means less for North America.
For the first time, I am not so sure… particularly as you mention Africa and the amount of resource contracts that have been signed in the last decade by the ravenous Asian dragons. With oil, we are also seeing that perhaps there is a bottom to the pie dish. Not sure?
I am glad you mentioned the Michigan worker laid off due to the fact his job is being done in China. In my work, over the last year I have seen factories (parts and all) dismantled and sent out of country.
Today, I was with a CEO of a freight company who described his shock at seeing Detroit recently with its boarded up windows and sad property market. This CEO talked about the USA’s drop in activity as he has contracts like cement shipping, etc, declining in his business.
I agree that this is the cost of going global and share your worry about those Michigan workers – how will this look thirty years from now?
Pietro Pollichieni on March 12, 2008, 12:09 PM
as Italian, I can say that in my country we are facing the same problems, and many among us believe that the solutions, for developed countries, are creativity and sustainability, in order to represent a right guide for the growing ones(China and India above all).
Pietro Pollichieni on March 12, 2008, 4:09 PM
as Italian, I can say that in my country we are facing the same problems, and many among us believe that the solutions, for developed countries, are creativity and sustainability, in order to represent a right guide for the growing ones(China and India above all).Vicki Nikolaidis on April 20, 2008, 11:54 PM
I agree that we need to talk about the positives of globalization as we continue to talk about the costs, particularly the personal pain. Mr. Stewart's point about transitions is the most important. We must provide realistic transitions for workers if we are going to remove their jobs! I remember Robert Rubin talking about the transition period of retraining etc that he considered important for the successful implementation of NAFTA. But that part of the NAFTA paln didn't survive Congress, and at a terrible cost.
Europeans and Africans I've talked to about globalization are OK with the positives from globalization but regret the loss of their own style of dress, food, etc. that gets pushed out. We need to respect cultures in other countries even as we share financial markets with them. Everyone in the world dressed in sports clothes made in China . . . it's boring, but that's the least of the problem.
Vicki Nikolaidis on April 21, 2008, 3:54 AM
I agree that we need to talk about the positives of globalization as we continue to talk about the costs, particularly the personal pain. Mr. Stewart’s point about transitions is the most important. We must provide realistic transitions for workers if we are going to remove their jobs! I remember Robert Rubin talking about the transition period of retraining etc that he considered important for the successful implementation of NAFTA. But that part of the NAFTA paln didn’t survive Congress, and at a terrible cost.
Europeans and Africans I’ve talked to about globalization are OK with the positives from globalization but regret the loss of their own style of dress, food, etc. that gets pushed out. We need to respect cultures in other countries even as we share financial markets with them. Everyone in the world dressed in sports clothes made in China . . . it’s boring, but that’s the least of the problem.
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