Globalization will ultimately be a disaster for our country, and for the same reason our misadventure in Iraq was doomed to fail. In his June 12 press conference, House Speaker John Boehner doubled-down on our nation’s failed foreign policy of militarily enforcing good government in other countries. He criticized President Obama for not pouring more of our nation’s resources, not only into Iraq, but also into the Middle East in general, including Egypt, Syria and Libya.
These countries have no tradition of peacefully developing an effective central government. They’re governed by disparate groups bent on gaining power any way they can, and our military force can’t change that. The grand schemers of the Iraq war assumed that the mechanics of democracy that made America successful — multiple candidates, free elections, and the procedures that go along with them — would create a model society that other countries in the Middle East would emulate.
Totally missing in their calculations were the American values and traditions that made those procedures successful. Even more important, they dismissed the role of an effective federal government that protects and enforces those values and traditions.
In the same way, the mechanics of capitalism and its free markets were supposed to result in a better life for all classes of the world’s peoples, just as they enabled the U.S. to develop a vibrant middle class and a relatively prosperous poor. Again, the theory totally dismisses the essential role of a central government that protects and enforces the values of its society, in this case, by defining what a free market is, protecting it from manipulators, and compensating for its failures.
Is a free market one in which unprincipled competitors are free to take ruthless advantage of, and drive out of business, those who adhere to the moral standards of a civilized society? Or is a free market one in which those who adhere to moral standards are free to compete in providing the best products and services at the lowest cost?
For most of the past century, our democratically elected federal government enforced our citizens’ respect for honest work by setting national standards for wages and working conditions, and by protecting American jobs from other nations that had no such values. Since the standards were nationwide, individual states were limited in their ability to compete for industry purely on the basis of providing the labor market with a supply of defenseless workers.
There is no such global government with the same values or power to enforce them. Indeed, the opposite is true. Today’s globalization is not what we traditionally considered as international trade, which is based on true economic efficiencies: locating a manufacturing plant in the center of a distribution area or near the source of raw materials, or capitalizing on a nation’s unique characteristics.
Locating a manufacturing plant in Mexico, China or any of the Third World countries to make products for the United States violates all these criteria. Unless you consider human beings as raw material or machines, cutting the cost of their labor is not an economic efficiency. It's the one-sided and brutal use of investor power.
In most cases, the only reason products can be made outside our country and sold more cheaply here is the huge disparity in wages, which more than makes up for all the inefficiencies corporations and investors go through in order to cut American workers out of the income stream.
Of course, our country must protect our national interests to the extent that it can in world affairs, and it should benefit from economically efficient international trade. However, these goals can be achieved only if we have a realistic appreciation of how to best influence the internal affairs of other nations, and we don’t sacrifice the fundamental values that made our country successful in the first place.
Chuck Kelly is a retired management consultant living in Burnsville and is author of The Destructive Achiever; power and ethics in the American corporation and Farewell Fantasyland; time for political and economic reality. He can be reached at email@example.com.